Stormwater Update –Is a "Rain Tax" Right for Your Municipality?

by Paul J. Bruder, Jr.

The potential for stormwater utility fees, or the creation of stormwater authorities in Pennsylvania, is real, and some municipalities have already put these measures in place. With increased federal and state concern over the health of the Chesapeake Bay and other impaired waters, and rising concerns over flooding, managing stormwater is becoming more complicated and expensive than ever. In this day and age, merely collecting stormwater and discharging it to the nearest receiving stream is not typically sufficient, particularly for more urbanized areas.

Federal and state authorities are pushing green infrastructure solutions and low-impact development, and the use of best management practices (BMP's) to filter out pollutants that naturally accumulate in stormwater, in an effort to keep our waterways as clean as possible. However, funding these programs and infrastructure upgrades puts further strain on already lean local government budgets, prompting local government experts to look for new ways to generate revenue.

Stormwater user fees are seen by some as the most fair solution. Property owners are charged a fee based on the size of the property and the percentage of impervious cover (or some similar calculation). Thus, like other utility fees such as water and sanitary sewer, the amount of these fees will be based on the amount of demand a user places upon the system. All property owners who generate stormwater runoff from hard surfaces will pay a fee. This way, property owners have much more control over the amount of the fee they will be required to pay, and such a system provides an incentive for land owners and developers to come up with more creative ways to develop their property to minimize stormwater runoff and maximize on-site infiltration. This system would appear to be a much more equitable system than a standard property tax based upon property value.

The creation of stormwater authorities had been the subject of much legal debate. Many in the legal and local government communities (myself included) believe that the existing Municipality Authorities Act, 53 Pa.C.S.A. § 5601 et seq., already allows the creation of such authorities. However, without any court decisions ruling on this issue, many municipalities are wary of creating such authorities and then facing the prospect and expense of a legal challenge. During the 2011-12 legislative session, the Pennsylvania Senate passed a bill that would provide municipalities with express power to create these authorities; however, that bill was not passed into law during that session. Currently, two similar bills – Senate Bill 351 and House Bill 821 – are pending in various stages along the process, and some fine tuning may take place before a final bill reaches the Governor's desk. There is optimism, however, that a bill providing some clarity on this issue will be signed into law this year.

As has been recognized in the consulting and legal communities, stormwater authorities, should they be created, are likely best organized at the watershed level. Stormwater knows no municipal boundary, so local governments that discharge stormwater to the same watershed need to work together in order to establish the most efficient system possible for managing stormwater and collecting any fees that are required. A county-wide approach may work as well, however it would seem that a watershed approach is more appropriate, given that impaired waters are defined by watershed as opposed to municipal boundaries.

Other funding options that have been batted around include separate fees on developers to compensate communities for things like inspections, plan reviews, and penalties for illicit discharges. While developers are an easy target, political backlash may prevent this from becoming a reality. Grants and low-interest loans are also available through many DEP and DCED programs, PennVest, and some federal programs as well. While these can be beneficial to getting things started with planning and design, they cannot be counted on to provide a steady stream of revenue sufficient to sustain a long-term stormwater management program.

Solutions to these problems – both from the environmental protection standpoint and the financing standpoint – are not easily achievable. However, difficult problems always require creative solutions, and the end result is often worth the effort.


back  |  printer-friendly version

HARRISBURG OFFICE
3401 North Front Street
Harrisburg, PA 17110-0950

TOWANDA OFFICE
304 Main Street
Towanda, PA 18848