Taxing the rain: Where does the money go?


By Roger McCredie-Beginning a New Series

“The rain is raining all around, It falls on field and tree, It rains on the umbrellas here, And on the ships at sea.”

— Robert Louis Stevenson

It also raineth, according to St. Matthew, on the just and the unjust alike; and, according to the United States Clean Water Act, it raineth on the pervious (the ground) and on the impervious (roofs and driveways, streets and sidewalks, parking lots). And when it raineth upon the impervious, it createth “stormwater runoff,” the unabsorbed water picking up trash, chemicals, decaying small animals and all manner of detritus which it redeposits in streams, lakes and rivers and ultimately the sea – except in urbanized areas, where it’s diverted by drains into underground sewer systems for treatment.

And this, ultimately, is why Asheville residents’ bimonthly water bills include a “stormwater fee” – a flat rate charge that, according to the city website, is used to:

Plan for, improve and operate the stormwater system in an efficient and effective manner;

Adopt development policies and standards that prevent flooding, preserve streams and channels, and minimize water pollution without arresting new or infill development;

Develop detailed watershed plans that promote orderly growth;

Fully comply with federal and state regulatory requirements;

Educate the public about stormwater issues and involve them in stormwater initiatives; and

Implement utility fees to meet these needs in a fair and equitable manner.

But almost from its adoption, the city’s stormwater fee has come under heavy scrutiny. Rain has been around since the world began. There has been stormwater runoff in cities as long as there have been cities, and ways of dealing with it are almost as old (parts of Crete’s sewerage system are still in active use after 3,000 years). And the City of Asheville, as such, has existed since 1795. How came it to pass, then, that in 2005 the city established – and began collecting a tax to pay for – an entire separate department to perform work and manage projects once considered a part of the overall function of what used to be called “the water works”? Did federal and state laws, as the city maintains, demand its creation? How much money do stormwater fees bring in? And, above all, exactly how is this money spent? Critics claim that only a fraction of the city’s collected stormwater revenue actually goes for the work it’s supposed to finance. They say that in fact the “rain tax” itself is a straw man that is used mostly to pay salaries and to act as a sort of put-and-take slush fund, an accusation that begs the question: what would set up such a situation?

Stormwater Treatment History 101

(Pay attention; there may be a quiz.)

National governmental attempts to address concerns about clean water began in 1948, with passage of the Federal Water Pollution Control Act, which “authorized the Surgeon General of the Public Health Service, in cooperation with other Federal, state and local entities, to prepare comprehensive programs for eliminating or reducing the pollution of interstate waters and tributaries and improving the sanitary condition of surface and underground waters.” The act further provided for federal assistance to state and local governments for construction of treatment plants to prevent “discharges of inadequately treated sewage and other wastes into interstate waters or tributaries.”

In 1972, the recently formed Environmental Protection Agency added several sweeping amendments to the old 1948 act, turning it into the Clean Water Act (CWA) as it presently stands. The new amendments established national standards for regulating pollutant discharges into waterways and set unilateral water quality standards. In 1987, the CWA began phasing out direct plant construction grants to cities, replacing them with “partnership agreements” with individual states under a financing arrangement known as the Clean Water State Revolving Fund. (The CWSRF is basically a self-perpetuating loan arrangement between the federal government and individual states. In North Carolina, CWSRF is administered by the Water Resources Division of the Department of Environment and Natural Resources, and its main funding focus is not stormwater runoff treatment, but drinking water purity.)

Then, in 1999, the EPA enacted Phase II of its stormwater program, which applies to cities with less than 100,000 population (such as Asheville). The Phase II rules, according to an analysis by Chicago attorney Susan Franzetti, shows that the National Pollution Discharge Elimination System (NPDES) permits required for smaller cities are more flexible than for larger ones, but that the law is also “an unfunded federal mandate that local communities are required to find the means to include in their already strained budgets.” In other words, the EPA can tell cities, in general terms, what to do about stormwater runoff … but when it comes to devising and funding a plan to do it, the cities are on their own. And failure to comply with government guidelines can result in revocation of permits, assessment of monetary penalties (fines) and other punitive measures.

Ongoing attempts by affected cities to interpret, let alone comply, with Phase II guidelines has led to almost as many individualized problems as there are municipalities involved. When Clearwater (Pinellas County), Florida, commissioners approved a new stormwater tax, they sought to ease the burden on senior citizens with fixed incomes, who make up a significant segment of the population. But Florida law requires that the county offset waived or discounted bills out of its own pocket. Also, the new tax was added onto property tax bills, so that residents who could not afford the additional costs could lose their homes. And in Maryland, where the state’s 10 most populous counties were required to implement stormwater utility fees by July 1, the resulting hodgepodge prompted a headline: “Rain tax falls all over the place: Stormwater fees uneven, from a penny to thousands.”

And, according to critics, the EPA’s it’s-up-to-you approach to compliance has created a golden opportunity for pork barrel trade offs and runaway taxation literally covering a multitude of sins.

Meanwhile, back in Asheville …

The city’s website prominently states, “The federal government requires the City of Asheville and all similarly-sized U.S. cities to create and maintain stormwater programs in an effort to restore and maintain the integrity of our nation’s waters by sharply reducing water pollution.  The city’s stormwater program is a requirement established by the federal government’s Clean Water Act …, which is dedicated to implementing broad-based watershed strategies to reduce water pollution.”

In fact, “federal mandate” has become a virtual mantra for city officials defending the local stormwater fee. As recently as July, Director of Public Works Cathy Ball, in an interview with the Asheville Citizen-Times, cited “the city’s federally mandated stormwater program.”

“There was a law passed to basically say if you’re an urbanized area, between 50,000 and 100,000 in population, you have to put measures in place to keep water quality from getting worse … most people wouldn’t see improvements in their front yard because of that, but a lot of money goes towards meeting that federal mandate.”

Ball said, “We generally bring in about $3 million worth of revenue annually, and they [Ashevillians] don’t see $3 million worth of work.”

Next: The money flows in, the money flows out … but how much and for what?

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