Legislative Solution Proposed for NJ’s Stormwater Runoff Problems

Legislative Solution Proposed for NJ’s Stormwater Runoff Problems

The New Jersey Senate recently advanced legislation that aims to address the state’s aging stormwater systems, which are designed to prevent runoff from causing pollution and flooding. The bill, Senate Bill No. 1073, would authorize municipalities and counties to establish stormwater utilities, which could then assess fees on property owners.

Managing Stormwater Runoff

When stormwater runoff is carried from streets, parking lots, and farmland into local waterways, it often carries chemicals, heavy metals, fertilizers, and other pollutants along with it. Up to 60 percent of New Jersey’s existing water pollution is attributable to stormwater and nonpoint sources of pollution, according to some estimates. While New Jersey has a vast stormwater infrastructure, the state currently lacks a dedicated source of funding. As a result, systems undergo few upgrades and little maintenance once built. 

Senate Bill 1073 Establishes Stormwater Utilities

While most agree that New Jersey must better maintain its stormwater systems, there is little consensus on how to do so. Senate Bill No. 1073 offers one solution. Under the proposed legislation, the governing body of any county or municipality may, by resolution or ordinance, establish a stormwater utility for the purposes of acquiring, constructing, improving, maintaining, and operating stormwater management systems. Similarly, the governing body or bodies of one or more municipalities that have established a municipal sewerage authority or utilities authority may, by ordinance or parallel ordinances, request that the authority establish a stormwater utility.

Local governments that establish a stormwater utility would be authorized to charge and collect reasonable fees and other charges to recover the utility’s costs for stormwater management. Under the proposed bill, these fees and other charges would be collected from the owner or occupant (or both) of any real property from which originates stormwater runoff which enters the stormwater management system or the waters of the State. 

Under Senate Bill No. 1073, “[a]ny fee or other charge would be based on a fair and equitable approximation of the proportionate contribution of stormwater runoff from a real property.” In addition, several credits would be available for property owners. For instance, a partial fee reduction would be available for any property that has installed and is operating and maintaining stormwater best management practices that reduce, retain, or treat stormwater onsite. A credit would also be available to any property that has installed and is operating and maintaining green infrastructure onsite. Notably, land actively devoted to agriculture or horticulture would be exempt from any fees and other charges.

Below are several other key provisions of the bill:

• Allocation of Fees: Local governments that collect fees and other charges would be required to remit to the State Treasurer annually an amount equal to five percent of all such fees and other charges, or $50,000, whichever amount is less. The State Treasurer would deposit these moneys into the “Clean Stormwater and Flood Reduction Fund,” which the Department of Environmental Protection (DEP) would use to fund planning, implementation, and coordination activities related to stormwater utilities in the State, water quality monitoring and assessment, point and non-point source water pollution reduction projects, implementation of the DEP’s stormwater management program, and a public education and outreach program relating to stormwater management.  To the extent surplus revenue is collected, the bill allows counties and municipalities to transfer up to five percent of the annual costs of operation of the stormwater utility to the local budget.
• Enforcement: The stormwater legislation provides counties, municipalities, and authorities with several enforcement mechanisms, which are similar to the enforcement mechanisms that currently exist for water and sewer utilities. Specifically, interest would accrue on the unpaid fees and other charges; the unpaid balance and any interest accrued thereon would constitute a lien on the parcel which would be enforced in the same manner as delinquent property taxes and municipal charges; and the unpaid balance and any interest accrued thereon, together with attorney’s fees, could be recovered in a civil action.
• Reporting Obligations: Senate Bill 1073 would require a county, municipality, or authority that establishes a stormwater utility to submit an annual report in a form and manner determined by the Division of Local Government Services in the Department of Community Affairs (DCA) and the DEP. The annual report would include, but need not be limited to, information on the stormwater utility’s service area; its schedule of fees, other charges, and credits; the number of properties subject to the utility’s fees and other charges, and the number of properties, broken down by land-use type, granted credits or exemptions; the total revenues collected from stormwater utility fees and other charges; the percentage of revenues from fees and other charges spent on the purposes authorized in the substitute; and a list of stormwater management projects implemented in the previous fiscal year.  Counties, municipalities, and authorities would be required to post the annual report on their Internet website for access by the public.
• Bonds: Under the bill, a county, municipality, or authority that establishes a stormwater utility would be permitted to issue bonds for the purpose of raising funds to pay the cost of any part of the stormwater management system. In addition, they could also enter into a contract with a private entity for the planning, design, engineering, construction, improvement, maintenance, and operation of a stormwater management system.

Likelihood of Passage

Former Gov. Chris Christie previously vetoed a similar measure in New Jersey.  However, the proposed bill has the support of the state Department of Environmental Protection and Governor Murphy is likely to be receptive to the measure should it reach his desk.  The Environmental and Land Use Law practice group at Scarinci Hollenbeck will keep you posted on any updates.

If you have any questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact me, Dan McKillop, at 201-806-3364.