NCS000429_Gastonia SW Utility Correspondence_20220615

From:Powell, Jeanette
To:Lawson, Danon
Cc:Aiken, Stan E; Denton, Bill; Eplin, Tamera; Jesse McDonnell; Khan, Zahid; Lauren Garcia; Lawyer, Mike; Lentz,
Zachary; Reed, Isaiah L; Valentine, Thad; Paul Clark ([e-mail]); Smith, Danny
Subject:RE: [External] Stormwater Post Construction Enforcement - Legal Question
Date:Wednesday, June 15, 2022 4:36:00 PM
Attachments:image001.png
Hi Danon,

That is a great question! I’m not aware of any MS4 that has a compliance-based escalation of
stormwater utility fees, and my thoughts on it (not legal advice!) are below. I recommend
contacting Evan Kirk at the UNC School of Government ([e-mail]). SOG has some
studies that might be relevant, and Evan knows a lot about the various stormwater utilities in NC.

Based upon my experience, I doubt the City would be able to implement an escalation of the
stormwater utility fee for non-compliant properties. You would have to make the argument that a
deficient SCM always increases the amount of runoff entering the collection system and, therefore,
increases the “use” of the system to an associated ERU category. State statute requires that utility
fees be based upon the use of the system that the fees support, which is why we pay “user” fees for
water/sewer based upon the water we use and subsequently release into the sewer – there’s a
direct correlation between the use and the impact to the system. Because the amount of
impervious surface is typically the basis for stormwater utility ERUs, the use of the system is
“defined” as the amount of runoff entering the system from a given property (normalized into
standard categories of ERUs), not the amount of effort the user causes the local government.
Because local governments don’t treat stormwater at the end of the pipe, it’s hard to assign any
pollutant loading argument – it’s strictly based on amount of runoff. Utility fees typically incorporate
a pre-set amount for administration and are usually supplemented by general funds to cover things
like unexpected or excessive administrative costs that can’t be equitably passed on to all users of the
system.

All that said, it is a sound concept to escalate penalties with increased warnings. It’s more of a post-
construction compliance issue than an increase in runoff issue. The City could adopt an escalating
penalty under the post-construction ordinance which, unfortunately, makes collections complicated
and increases administration costs even more. It’s unpalatable, but the most effective tool a local
government has is to hold all permits and certificates of occupancy for non-compliant projects. That
could potentially mean that a private residence in a subdivision can’t get a building permit for their
addition to move grandma in because the HOA won’t bring the SCM into compliance. Many local
governments include an ordinance provision that if the SCM owner doesn’t remedy a Notice of
Violation, then the City can correct the issue and back-charge the owner (that is rarely implemented
though) or file a lien on the property (useless against an HOA who never sells or borrows against
their property). Some MS4s require a financial security before the SCM can be accepted and the last
CO in a project can be issued. All of these are great on paper, but they are all very politically charged
approaches.

Regards,

J

Jeanette Powell
MS4 Program Coordinator
919-707-3620
[e-mail]

North Carolina Department of Environmental Quality
Division of Energy, Mineral & Land Resources Stormwater Program
512 N. Salisbury Street, 6th Floor
1612 Mail Service Center
Raleigh, NC 27699-1612

Email correspondence to and from this address is subject to the North Carolina Public Records Law and may be
disclosed to third parties.

https://deq.nc.gov/sw

From: Lawson, Danon <[e-mail]>
Sent: Wednesday, June 15, 2022 3:14 PM
To: Powell, Jeanette <[e-mail]>
Subject: [External] Stormwater Post Construction enforcement - Legal Question

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Good Afternoon Jeanette

In an effort to improve our permit we are actively looking for methods to better ensure that post
construction management on private sites is maintained. Quite frankly Over the years our permit has
lacked teeth and enforceability. In a recent meeting reviewing our program, it was brought up by
some staff to consider increasing fees at incremental monthly rates for properties who fail to comply
with maintenance.

As an example: If a store has 30 ERUs (equivalent residential unit – we calculate on a flat ERU rate
here), and our rate is $5 per ERU then the business is paying a fee of $150 per month. If their SCM is
not maintained and they ignore the initial letter telling them to maintain the SCM, then their fee
goes up say 33% (now instead of $150 its $199.50.) if in another month goes by it goes up another
$33%) or $265.34. Finally on the third month and until something is done, the fee goes to 100% (or
double the initial fee for a its final increase until the problem is solved). The justification is that these
fee increases are necessary to accommodate the putting greater pressure on the public system. It
also makes a more equal playing field for businesses who are paying to maintain their SCMs.

Here is my general question. I am pretty sure this approach will raise eyebrows in our legal
department. Do you know of any other MS4 who has taken this approach. OR, do you know if this
approach is in violation of any statue, law or rule that the State of NC has put into place (something
that says the utility fee cannot be used in a punitive manner, etc). I just want to be prepared with an
answer for our legal department when the discussion is had. Thank you Jeanette.

Danon Lawson
City of Gastonia
Stormwater Utility Administrator
1300 N. Broad St; Gastonia NC 28054
704-869-1013
[e-mail]
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