SCORE A VICTORY FOR REGIONAL STORM WATER MANAGEMENT

Posted on September 24, 2015 by Michael Hardy

Ohio statutes authorize regional sewer districts to collect and treat sewage, including combined sewer overflows, and to charge fees for those services.  The regional sewer district in the Cleveland area (“NEORSD”), with a service territory encompassing nearly 60 communities of Cuyahoga County and some nearby counties, took its authority one step further.  Nearly fifty years after its creation, the NEORSD added a regional storm water management program that would charge property owners fees on the basis of a formula primarily tied to the square footage of impervious surfaces like parking lots and roofs.  The NEORSD envisioned the plan would address the considerable urban sprawl that had occurred since the 1970’s and that had created vast expanses of impervious spaces in the form of parking lots, large clusters of office, shopping, Big Box, commercial and industrial facilities, often in the upland suburban areas to the east and south of the core city (many suburbs’ names end with “Heights”).  With the conversion of green space to impervious surfaces, many of the lower lying areas began to experience more flooding and erosion. 

Not content to wait for the individual upland communities to control storm water in a decentralized fashion, the NEORSD in 2010 adopted its plan in response to the “regional” flooding that urban sprawl created and exacerbated.  But there was immediate and well financed opposition to the expanded storm water program.  Opposition came from several communities which maintained their own capital intensive storm water systems and from commercial property owners which feared the hefty fees they would pay as a result of the parking lots and roof structures they had constructed.   And the opposition succeeded when, in 2013, the Cuyahoga County Court of Appeals ruled that the statutory charter could not support regional storm water control.  See my February 5, 2014 posting, “Storm Water Management by a Regional Sewer District: Was it a Power Grab or a Logical Extension of Existing Powers?”  

With that decision, the NEORSD stopped collecting the estimated $35,000,000 per year in fees to implement the regional storm water prevention and abatement measures, but it did not give up.  The NEORSD appealed to the Ohio Supreme Court, and received considerable amicus support.  [Full disclosure: I authored a supporting amicus brief.]  

More than a year after oral argument, the Ohio Supreme Court announced its decision.  In a 5-2 vote, the high court reversed, finding that the NEORSD possessed the statutory authority to undertake regional storm water control.  But as to the collection of fees, the vote was closer, with four Justices approving of the NEORSD fee plan and three dissenting.  One Justice dissented because she believed that the fees are intended to relate to services and are not for the future construction and eventual operation of the infrastructure; therefore, she concluded that the NEORSD is premature in assessing fees until it actually provides a “benefit” or “service” from “water resource projects” already in operation.  The other two dissenting Justices found that the regional storm water plan exceeds the NEORSD authority and that the fees are unrelated to services, and therefore, the fees are invalid, un-voted “taxes”. Northeast Ohio Regional Sewer District. v. Bath Twp., Slip Opinion No. 2015-Ohio-3705(decided September 15, 2015.

With the passage of time since the NEORSD plan’s conception in 2010, and the eventual judicial affirmation approximately five years later, a great deal of momentum was lost, with delays in the acquisition of infrastructure to abate storm water runoff and deferral in the collection of funds to implement the program.  Nevertheless, the Supreme Court’s validation of the NEORSD regional storm water plan should “greenlight” similar strategies of other regional sewer districts that are grappling with urban-sprawl induced storm water issues.

Storm Water Management by a Regional Sewer District: Was It a Power Grab or a Logical Extension of Existing Powers?

Posted on February 5, 2014 by Michael Hardy

In the mid 1970’s, the City of Cleveland and some fifty plus surrounding communities created a sewer district now known as the Northeast Ohio Regional Sewer District (“NEORSD”) to handle sanitary and industrial discharges into Lake Erie, and several rivers, including the Cuyahoga.  Over time, however, the Cleveland area experienced considerable urban sprawl,  creating vast expanses of impervious surfaces in the form of parking lots and large clusters of office, shopping, Big Box, commercial and industrial facilities.  With the conversion of green space to impervious roofs and parking facilities, some of the communities began to experience more flooding and erosion problems.   Indeed, the Cleveland Metroparks, known as the “Emerald Necklace”  because of the park lands situated in the flood plains of the Cuyahoga, Chagrin, and Rocky Rivers, was particularly hard hit from the storm water runoff originating in the nearby suburbs.

To address storm water and erosion problems that were “regional” in scale, the NEORSD developed a program in 2010 that included the payment of fees by all property owners based on the amount of impervious surface areas, like driveways, parking areas, and roof tops.  The NEORSD expected to use these funds on projects that would alleviate flooding and stream erosion.  But there was no unanimity among the member communities of the NEORSD about the need for, or the type of program that the district wished to implement.  Approximately ten of those communities objected, in large part because their geographical  elevations were such that they likely would never benefit from the preventive measures.   Moreover, many of those communities already had their own expensive, capital intensive storm water systems.  Furthermore, a significant number of commercial property owners objected because of the hefty fees that they would pay based on the parking lots and roof structures they maintained.

To validate the regional program, the NEORSD filed a declaratory judgment action in the Court of Common Pleas in Cuyahoga County, where it prevailed.  But the dissenting communities and commercial property owners appealed, and secured a two to one appellate reversal in 2013.  The appeals court concluded that the sewer district did not have the authority to address storm water unless it was also contaminated with sewage.  The court of appeals did not reach the merits of the claim that the storm water fees were illegal taxes. (The NEORSD had billed approximately $35,000,000 in fees  by the time of the appeals court decision.)

The NEORSD has appealed the decision to the Ohio Supreme Court, with significant amicus support.  The dissenting communities and the commercial property owners have urged the Ohio Supreme Court to decline to hear the case, and claim that the legislative process in the General Assembly is the proper place to balance the political considerations that might be involved in a fee supported regional storm water management plan.  They claim that the current plan is nothing more than power grab and illegal tax by an unelected and unaccountable body.  The NEORSD, on the other hand, argues that the storm water problems know no political boundaries, and thus its regional, holistic approach is far superior to the piecemeal, community by community approach that previously existed.

As of this note, the Ohio Supreme Court has not decided whether it will take the case.  The underlying court of appeals decision can be accessed here.