County Executive Ike Leggett believes the county’s stormwater management projects are becoming unsustainably expensive and is recommending major changes to the Department of Environmental Protection’s budget to curtail the rising costs.
Last month, Leggett amended the department’s proposed capital budget to cut about $240 million from his initial proposal presented to the council in January.
The drastic reduction in the department’s budget came from plans to cancel about $113 million in stormwater projects and from creating new efficiencies in overseeing the projects by reorganizing the environmental protection department. The county also plans to not fill seven vacant positions in the department.
The move has touched off confusion in the environmental community, with advocates and a local politics blog wondering if the county is privatizing its efforts to treat stormwater by changing its contracting method. Environmentalists are also concerned the changes could result in the county treating less runoff before it flows into the Chesapeake Bay.
Kit Gage, advocacy director for the environmental group Friends of Sligo Creek, wrote in a guest post on the local blog Seventh State, that Leggett’s proposal “makes no sense.”
But county officials in a council committee meeting and interviews over the past three weeks say that’s not the case.
They say the budgetary move was possible after the county reevaluated its state-mandated requirements to treat water flowing over impervious surfaces and found that about 800 more acres of such surfaces were being treated in the county than what was previously reported to the state. This discovery enabled officials examine implementing changes to save money.
Leggett’s proposal calls for flatlining the county’s Water Quality Protection Charge, rather than increasing it as was originally proposed in January. The charge, known derisively as the “rain tax,” is lumped into a property owner’s property tax bill. It currently costs the average homeowner about $104.25 per year, but has risen gradually over the past decade as the county has struggled to comply with state requirements to treat a specific number of acres of impervious surface.
Property owners are charged different amounts under the fee’s formula based on the square footage of impervious surface on their property—so a property with a large parking lot that has no runoff treatment system would be charged significantly more than a small residence with no driveway.
In 2010, the county entered into what’s called an MS4 (Municipal Separate Storm Sewer Systems) Permit with the state that required the county to treat about 3,800 acres of impervious surfaces for runoff by 2015. The county didn’t meet that goal and reported to the state it had only treated about 1,900 acres of impervious surfaces by February 2017. This deficit resulted in a “consent decree” between the county and state that requires the county to treat the total acreage outlined in the permit by 2020 or face a $300,000 fine.
Despite the consent decree, county officials now believe the county is close to meeting the state requirements and the massive spending on stormwater projects is no longer needed.
“This department needs to have greater efficiencies and that’s what we’re trying to do,” Leggett said in an interview last week. “We’ve slowed down capital spending related to schools, recreation, fire stations and everything else. But the environmental community wanted us to continue to increase the fee and they’re the only ones that don’t want to have a slow down. If the council wants to increase the fee—they can do so, but I’m not going to do that.”
Leggett said he proposed the creation of the fee as a County Council member in 2000 and has defended increasing the fee as county executive since taking office in 2006. However, he hadn’t realized until the department conducted a review of its stormwater management program over the past year that the county appears to be much further along in meeting its state requirement for treating runoff than he had expected.
The rollout of the changes to the department has largely taken place behind the scenes. Leggett pitched the changes two months after he submitted his original capital budget proposal to the council in January, leaving the council scrambling for more information.
The council was briefed on the changes in a March 22 committee meeting and is scheduled to receive another update April 23 while it reviews Leggett’s proposed capital budget. The council is expected to approve the capital budget in mid-May.
The changes will reduce the county’s capital budget on stormwater projects from a proposed $345.5 million over the next six years to $102.5 million over the same period, according to council agenda documents.
The reduction in spending also will stop years of large increases in county spending on stormwater projects. The six-year budget has increased from about $30 million set in 2008 to nearly $300 million set in 2013.
Over the years, the funds have been spent to repair streams, upgrade retention ponds and install landscaping along streets to prevent runoff that often contains nutrients such as nitrogen and phosphorous as well as pollutants that can negatively impact the water quality of the Chesapeake Bay.
A stormwater pond built next the National Institutes of Health in Bethesda through a partnership between NIH and Montgomery County. Credit: NIH Record/ Jeff Kopp
In previous years, the county had treated about 100 to 200 acres per year of impervious surface, according to Patty Bubar, the county’s interim director of the Department of Environmental Protection. Bubar took over the department after the former director, Lisa Feldt, resigned in November citing “a personal decision.”
Bubar said that given how slowly the county was reaching the state-required treatment levels, her department undertook an assessment of the stormwater treatment program during 2017.
The assessment found that existing stormwater projects in the county treated runoff from about 800 acres of impervious surface that hadn’t been reported to the state as part of its MS4 Permit requirements.
She said this discovery happened because the county for the first time took into account stormwater projects installed on private developments. Previously, the county was largely only accounting for the impervious surfaces being treated through projects financed by the county, according to Bubar.
Bubar also said that in 2010, when the county first agreed to the MS4 permit with the state, the county wasn’t using high-quality aerial photos to calculate the acreage of impervious surfaces undergoing treatment. More recent and more detailed images showed that some sites had more acreage of impervious surfaces than earlier estimates, according to Bubar.
After finishing its departmental review, the county submitted to the state in February its claim of 800 newly found acres of impervious surface undergoing treatment and the claim is being reviewed by the state’s Department of the Environment. Bubar said earlier this month that so far state regulators have “largely agreed with our assessment.”
She said the discovery of the additional acres “made a tremendous impact in the size of the construction program we’ve been planning for. The scope and size of the construction program is able to be much smaller.”
In total, the department was able to cancel 25 planned stormwater treatment projects, which largely led to the proposed reduction in spending over the next six years. Canceled projects include creating green streets—small vegetated areas built along roads to treat stormwater runoff—planned in Kensington Estates, Manor Woods and Wheaton Woods as well as stormwater ponds in several communities. The county plans to move forward with stormwater projects already under construction.
Some of the projects being financed by the county were costly considering how much acreage of impervious surfaces they treated. For example, a presentation created by Craig Carson, a manager in the county’s environmental department, noted the installation of green streets on Arcola Avenue in Silver Spring cost $640,065 to build and treated about 2.4 impervious acres. A similar green streets project on Dennis Avenue in Silver Spring was estimated to cost about $4.8 million to treat 20 impervious acres, according to Carson’s presentation. Under both projects, the county budgeted nearly $250,000 to treat each acre of impervious surface. At that rate, the county would need to spend about $950 million to meet the state’s MS4 permit requirement.
Bubar said the green streets projects are the most expensive ones undertaken by the county to treat stormwater—not only because of construction costs, but also due to the additional monthly maintenance costs.
The 800-acre discovery led to council member Roger Berliner questioning Bubar at the March 22 committee meeting about why the county hadn’t taken credit for those acres in previous years.
“It does sound like a significant error was made,” Berliner said. “Typically what we expect of any administration or ourselves when a significant error is made is an after-the-fact review so we get a report exactly why was this mistake made.”
Bubar responded that the county was the first jurisdiction in Maryland to enter into the MS4 permit agreement with the state and officials at first weren’t sure how to comply with the regulations. She also noted other counties that received their permit requirements after the county are “are all struggling to meet the requirements.”
Leggett also said last week that the county is “farther along” than any other jurisdiction in the state in meeting the permit requirements. He said he didn’t curtail the program’s spending earlier because he believed the county was struggling to meet the requirements.
“The reason it was not done earlier was that I was part of resisting it,” Leggett said.
Council member George Leventhal said in an interview last week that he believes Leggett and the county budget department were correct in wondering why the county had accomplished so little toward meeting the permit requirements despite increasing the stormwater fees year after year.
“I think we need a whole overhaul for the Department of Environmental Protection,” said Leventhal, who, along with Berliner and four other Democrats, is running for county executive. “I do think we need fresh eyes and new leadership in that department.”
The environmental department is also planning to change how stormwater projects are contracted. Under the current system, Bubar said, the county hires several different contractors to design, build and maintain projects. The new process would put out a request for proposals that would require one contractor to treat a certain amount of acres of impervious surface.
That contractor would then be responsible for deciding which projects to undertake to treat a given acreage based on the requirements the county sets in the contract as well as its own cost-benefit analysis of projects. The contractor’s performance would continue to be evaluated by environmental department employees, according to Bubar.
Jennifer Hughes, the county’s budget director, said last week the move will create “a more efficient and frankly effective contracting vehicle.”
She said the department’s current structure includes several layers of county managers overseeing multiple contractors, which resulted in projects “taking much longer than they should have.”
The department also plans on saving money by changing its financing mechanism from municipal bonds, which the county has been using to fund the stormwater projects, to low-interest loans offered by the state. The county took out a $38 million bond in 2012 and a $46 million bond in 2016 to help finance the projects.
The county pays about 4 percent interest on those bonds, Hughes said. However, the state offers loans that charge less than 2 percent interest through its Water Quality Revolving Loan Fund to help jurisdictions pay for stormwater projects, according to Hughes. This change is also expected to result in savings for the county, she said.