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.