T&E ITEM
#4
April 28, 2010
Worksession
MEMORANDUM
April 26, 2010
TO:
FROM:
SUBJECT:
Transportation, Infrastructure, Energy & Environment Committee
Amanda Mihill, Legislative
AnalYS~~tD
Worksession: Expedited Bill 11-10, Stormwater Management - Water Quality
Protection Charge -Debt Service
Expedited Bill 11-10, Stormwater Management - Water Quality Protection Charge -Debt
Service, sponsored by the Council President at the request of the County Executive, was
introduced on March 23,2010. A public hearing was held on April 20.
Bill 11-10 would authorize the County to pledge the water quality protection charge as
security for certain debt obligations. The Executive's Recommended FYl1-16 CIP for
Conservation of Natural Resources, which the Committee reviewed on March 9, assumed the use
of bonds paid for with water quality protection charge revenue to fund the construction of
stormwater management facilities. As noted by Analyst Keith Levchenko in his March 9 packet,
and Bob Hoyt, Director of the Department of Environmental Protection, these bonds would be
treated like revenue bonds and would not compete with the County's general obligation debt.
The Committee and Council supported this approach. Council staff recommends approval of
Bill 11-10.
This packet contains:
Expedited Bill 11-10
Legislative Request Report
Memo from County Executive
Fiscal Impact Statement
DEP Testimony
F:\LAW\BILLS\! O! 1 Water Quality Protection Charge\T&E Memo.Doc
Circle #
1
3
4
7
9
 PDF to HTML - Convert PDF files to HTML files
Expedited Bill No.
11-10
Concerning: Stormwater Management ­
Water Quality Protection Charge ­
Debt Service
Revised: 3-22-10
Draft No. 1
Introduced:
March 23, 2010
Expires:
September 23, 2011
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _--:---:-_ _ _ _ _- ­
Sunset Date:
--!..!No~n~e~____::__----
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Council President at the Request of the County Executive
AN EXPEDITED ACT
to:
(1)
authorize the County to pledge the water quality protection charge as security for
certain debt obligations; and
(2)
generally amend County laws related to stormwater management.
By amending
Montgomery County Code
Chapter 19, Erosion, Sediment Control and Stormwater Management
Section 19-35, Water Quality Protection Charge
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* * *
Headingor defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unafficted by bill.
The County Council for Montgomery County, Maryland approves the following Act:
 PDF to HTML - Convert PDF files to HTML files
EXPEDITED
BILL
No. 11-10
1
Sec.
1.
Section 19-35 is amended as follows:
19-35. Water Quality Protection Charge.
2
3
4
*
(1)
*
*
The Director must deposit funds raised by the Charge, and funds for
this purpose from any other source, into a stormwater management
fund. Funds in the storm water management fund may be applied and
pledged to
lillY
debt service on debt obligations to finance the
construction and related expenses of stormwater management
facilities as approved in the Capital Improvements Program. [The]
Funds in the
stormwater management fund
must only be
5
6
7
8
9
10
11
12
[appropriated] used for:
(1) construction,
operation,
financing,
and
maintenance
of
13
14
stormwater management facilities, and related expenses.,.
including debt service payments related to construction and
related expenses of stormwater management facilities;
15
16
*
*
Sec. 2. Expedited Effective Date.
*
17
18
The Council declares that this legislation is necessary for the immediate
protection of the public interest. This Act takes effect on the date when
it
becomes
law.
Approved:
19
20
21
22
23
Nancy Floreen, President, County Council
Date
24
25
26
Approved:
Isiah Leggett, County Executive
Date
F:\law\Bills\1 011 Water Quality Protection Charge\Bill1 ,Doc
 PDF to HTML - Convert PDF files to HTML files
LEGISLATIVE REQUEST REPORT
Expedited Bill 11-10
Stormwater Management - Water Quality Protection Charge - Debt Service
DESCRIPTION:
This Bill would authorize the County to pledge the water quality
protection charge as security for certain debt obligations; and generally
amend County laws related to stormwater management.
In order to meet current fiscal challenges facing the County, the County
must increase the amount of revenue available to maintain core
Government programs and services.
To enhance the amount of revenue available to support core
governm~nt
programs and services.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
Office of Management and Budget; Department of Finance
FISCAL IMPACT:
To be requested.
ECONOMIC
IMPACT:
EVALUATION:
To be requested.
Subject to the general oversight of the County Executive and the County
CounciL
EXPERIENCE
ELSEWHERE:
SOURCES OF
INFORMATION:
Joseph Beach, Director of Management and Budget
Kathleen Boucher, Assistant Chief Administrative Officer
Marc Hansen, Acting County Attorney
APPLICATION
To be researched.
WITHIN
MUNICIP ALITIES:
PENALTIES:
N/A.
F:\Law\Bills\1011 Water Quality Protection Charge\LIT.Ooc
 PDF to HTML - Convert PDF files to HTML files
OFFICE OF THE COlJNTY EXECUTIVE
ROCKVILLE, MARYLAND 20850
lsiah Leggett
County Executive
MEMORANDUM
March 18,2010
\
TO:
FROM:
SUBJECT:
Nancy Floreen, Council President
I,iab Leggett, County
Executive~~
/7
(
:
FY 2011 Budget Reconciliation and Financing Act
I am attaching for Council's consideration a Budget Reconciliation and Financing
Act (BRF A) which makes changes to the County Code that are necessary to reconcile my
recommended FY 2011 operating budget with projected FY 2011 revenues. This bill will help
the County address its cun-ent fiscal challenges by increasing the amount of revenue available to
maintain and enhance core government programs and services. I am also attaching a Legislative
Request Report for the bilL A Fiscal Impact Statement will be transmitted to Council soon.
The BRFA consists of five primary components. First, it increases the energy tax
rates. Second, it temporarily redirects the portion of recordation tax revenues that are cun-ently
reserved for County Government capital projects and rental assistance programs to the general
fund for general purposes. Third, it allows revenues generated by the Water Quality Protection
Charge to be used to pay debt service on bonds that fund stonnwater management infrastructure
projects. Fourth, it transfers responsibility for administering equal employment opportunity
programs from the Office of Human Resources to the Office of Human Rights. Fifth,
it
authorizes the Fire and Rescue Servi.ce to impose an Emergency Medical Services (EMS)
Transport Fee.
As the Council knows, the County's energy tax is actually a tax on fuel oil,
natural gas, and electric utility providers which is passed on to all utility customers. Because the
energy tax is a broad-based tax, its impact on families is reduced by the fact that it is paid by .
businesses and households, and all levels of government, including federal agencies located in
the County (that currently do not pay any other major County
tax).
Additionally, the energy tax
is a consumption tax based on energy usage.
It
is not based on the overall size of the utility bill
or the cost per unit of energy used as billed to the consumer. Therefore, the amoUnt of the tax
can be lessened by reduced energy usage. Based on existing usage patterns for the average
homeowner, my recommended FY 2011 budget assumes an average increase in the energy tax of
approximately $2.90 per month. I have also recommended additional funding in the Health and
 PDF to HTML - Convert PDF files to HTML files
Nancy Floreen, Council President
March 18,2010
Page 2
Human Services budget for the County's Energy Assistance Program to minimize the impact to
low-income households.
My recommended FYll budget contains several efforts to restructure County
Government to improve responsiveness and efficiency. One of these changes is the transfer of
the Equal Employment Opportunity program from the Office of Human Resources to the Office
of Human Rights. This shift takes advantage of existing staff resources to reduce costs and
leverage the efforts of County staff to produce better outcomes for the community. This bill
modifies the County code provisions relating to the responsibilities of the Office of Human
Resources and Office of Human Rights to reflect this change.
The EMS Transport Fee is needed to fund fire and rescue services in the County.
Without this fee, emergency response to residents will be impaired. EMS Transport Fees are
widely employed throughout the nation and by local governments throughout the Washington
region. These jurisdictions have not experienced any indication that people decline to use
emergency transports as a result ofthe imposition of an ambulance fee. By creating a prepaid
fund for uninsured County residents, the legislation that I am transmitting imposes a fee only on
County residents with health insurance which covers EMS Transports. This arrangement more
equitably distributes the economic burden ofproviding EMS transport services in the County
between residents and nonresidents .. The legislation provides for a hardship waiver for
nonresidents who fall below 300 percent of federal poverty guidelines.
To provide the Council with a complete picture ofthe EMS Transport Fee
program created by this bill, I am attaching a copy of the proposed Executive Regulation to
implement the fee. This proposed regulation will be published in the April 2010 County Register
and submitted to Council after the 30-day public comment period ends on April 30.
Finally, I note that the BRF A is consistent with Bill 31-09, Consideration of
Bills - One Subject (enacted on September 29,2009), which requires that a bill "contain only
one subject matter".'
As
noted in the Council staff packet for Bill 31-09, that bill was intended to
adopt the "one subj ect rule" of the Maryland Constitution, which requires all laws enacted by the
General Assembly to contain only one subject. The Maryland Attorney General has repeatedly
concluded that budget reconciliation and financing bills do not conflict with the one subject rule.
For example, in 2005, the Attorney General noted that "[f]or the past fourteen years, 15 budget
reconciliation, budget reconciliation and financing acts or variations thereof, have been used to
balance budgets, raise revenue, make fund transfers, redistribute funds, cut mandated
appropriations and authorize or mandate appropriations."] The Attorney General concluded that
all of those bills were consistent with the one subject rule because the provisions of the bills were
"clearly germane to the single subject of financing State and local government".
See Panitz
v.
Comptroller ofthe Treasury,
247 Md. 501 (1967) (Omnibus supplemental appropriation bill
comprised a single subject for purposes of § 29 of
Art
III of the State Constitution even though
See May 19,2005 memorandum from Attomey General
J.
Joseph Curran, Jr. to Governor Robert Ehrlich regarding
House Bill 147 (2005).
I
®
 PDF to HTML - Convert PDF files to HTML files
Nancy Floreen, Council President
March 18, 2010
Page 3
the bill combined such diverse elements as police aid to local government; teacher salaries and
pensions; and general unrestricted grants to local governrnent).
Attachments (3)
cc:
Joseph Adler, Director, Office of Human Resources
Jennifer Barrett, Director, Finance Department
Joseph Beach, Director, OMB
Kathleen Boucher, ACAO
Richard Bowers, Fire Chief, MCFRS
Marc Hansen, Acting County Attorney
Robert Hoyt, Director, DEP
Richard Y. Nelson, Jr., Director, DHCA
James Stowe, Director, Office of Human Rights
 PDF to HTML - Convert PDF files to HTML files
OFFICE OF MANAGEMENT
AND
BUDGET
Isiah Leggett
County Executive
Joseph F. Beach
Director
MEMORANDUM
Apri112,2010
TO:
Council
Joseph F. Beach, D
Expedited Bill 11-1
Debt Service
FROM: .
SUBJECT:
.,
'.'
t ,
ffice of Management and Budget
tormwater Management - Water Quality Protection Charge-
The purpose ofthis memorandum
is
to transmit a fiscal and economic impact statement
to the Council on the subject legislation.
LEGISLATION SUMl\IIARY
Bill 11-10 would authorize the County to pledge the water quality protection charge
to
pay debt service on debt obligations to finance the construction and related expenses
of
stormwater
management facilities approved in the County's Capital Improvement Plan.
FISCAL AND ECONOMIC SUlUMARY
The County is required to comply with the National Pollutant Discharge Elimination
System
(NPDES)
Municipal Separate Storm Sewer System (MS-4) permit issued by the Maryland
Department ofthe Environment
A
new permit, with expanded requirements, was issued in February,
2010. The Water Quality Protection Charge (WQPC)
is
the appropriate funding source for County
programs aud projects needed to comply with the
MS-4
permit, including related capital construction.
To the extent that debt is
used
to finance the cost ofMS-4 compliance, the interest cost
would be a fiscal impact ofBill 11-1
O.
The cost of issuing, marketing, and servicing the bonds will
be
capitalized in keeping with standard County practices.
Bill 11-1 0 will authorize the County
to
issue bonds secured by the WQPC
to
finance the
.construction of stormwater management facilities, thereby moderating the economic impact on taxpayers
by spreading the capital costs of MS-4 compliance over the lifetime ofthe bonds. Without Bill 11-10,
capital costs for complying with
MS-4
would be paid from WQPC current revenue (cash), resulting in a
significantly higher WQPC rate
per
equivalent residential unit
(ERU)
to generate the resources needed to
meet MS-4 requirements.
Estimated WOPC per ERU
FYI1
FYI2
$49.00
$60.00
With MS-4 Capital Construction Funded Using Bonds
$90.00
With
MS-4
Capital Construction Funded from WQPC Current Revenue
$78.50
Consequently, BillI1-l0 will moderate the economic impact ofMS-4 compliance on County taxpayers.
Office of the Director
101 Monroe Street, 14th Floor' Rockville, Maryland 20850 • 240-777-2800
wViw.montgomerycountymd.gov
 PDF to HTML - Convert PDF files to HTML files
Nancy Floreen, President, County Council
April 12, 2010
Page 2
The following contributed to and concurred with this analysis: John Greiner, Office of
Management and Budget; Glenn Wyman, Department of Finance; Bob Hoyt, Department of
Environmental Protection; Gladys Balderrama, Department of Environmental Protection.
JFB:jg
c: Kathleen Boucher,
Assistant
ChiefAdministrative Officer
Dee Gonzalez, Offices of the County Executive
Bob Hoyt, Director, Department of Environmental Protection
Steve Shofar, Department ofEnvironmental Protection
Gladys Balderrama, Department ofEnvironmental Protection
Jennifer Barrett, Director, Department of Finance
Glenn Wyman, Department of Finance
John Greiner, Office of Management and Budget
John Cuff, Office of Management and Budget
 PDF to HTML - Convert PDF files to HTML files
I
Expedited Bill 11-10
Stormwater Management Protection Charge Debt Service
April 20, 2010 Public Hearing
Testimony of Robert Hoyt, Director, Department of Environmental Protection
Good afternoon. My name is Bob Hoyt. I am the Director of the Montgomery
County Department of Environmental Protection. Thank you for the opportunity
to testify on behalf ofthe County Executive in support of Expedited Bill 11-10,
Stormwater Management - Water Quality Protection Charge - Debt Service.
Bill 11-10 would authorize the County to issue bonds secured by the Water Quality
Protection Charge (WQPC) to finance the construCtion of stormwater management
facilities included in the County Executive's FY11-16 Capital Improvement
Program.
A new stormwater permit was issued to the County on February 16,2010. The
permit includes a restoration requirement to treat the stormwater runoff from 20%
of the County's impervious area not currently treated to the maximum extent
practicable. This equates to approximately 4100 acres of impervious area. The
restoration requirement will be met by implementing the projects identified in the
Stormwater CIP for FYll-16. The CIP includes $86 million dollars over the five­
year permit term.
The financial investment would be challenging to meet even during prosperous
economic times without a dedicated revenue stream or without haVing to redirect
County GO bonds from other funding priorities.
 PDF to HTML - Convert PDF files to HTML files
DEP has worked closely with the Department of Finance and the Office of
Management and Budget in developing Bill 11-10 to ensure a method of
implementation that would minimize the impact to County property owners, and
still meet our permit obligations. This bill effectively pledges a portion of the
Water Quality Protection charge to pay debt service on bonds issued to construct
stormwater management facilities. These bonds will, therefore, be self-supporting
and not compete with the County's general obligation debt.
The Water Quality Protection Charge already provides pay-as-you go funding for a
portion of the Stormwater Management CIP. Bond-funding backed by the Water
Quality Protection Charge instead of cash funding will help mitigate the economic
impact on property owners, and spread the capital costs of permit compliance over
the life of the bonds.
Without approval of Bill
11-10,
the County would need to establish a significantly
higher WQPC rate per Equivalent Residential Unit (ERU) to fund the CIP. lfwe
were to pay cash to fund the FYll-16 ClP, the WQPC rate charged to the
taxpayers would be $79.50 or 60% more than the County Executive recommended
rate for FYII of$49.00 per ERU. This increase would represent an undue burden
on Montgomery County property owners. County Executive Leggett urges your
prompt and favorable consideration.
I would be happy to address any questions the Council may have.