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Sewer district can impose storm water management fees, court rules

A Cleveland-area sewer district has the power to assess regional storm water management fees in an area covering 60 cities, villages and townships in four counties, according to a recent ruling of the Ohio Supreme Court.

The Northeast Ohio Regional Sewer District (NEORSD) developed a plan in 2010 to manage storm water in and around Cuyahoga County and charges fees on property with “impervious” surfaces. A number of communities expressed opposition, prompting the sewer district to file suit in the Cuyahoga County Court of Common Pleas to affirm its authority over storm water runoff as a form of waste water.

The trial court ruled for the sewer district, but the 8th District Court of Appeals reversed the trial court, saying storm water management and related fees are outside the agency’s authority under Ohio Revised Code section 6119.

Fee revenue was targeted at $35 million per year, which the sewer district had suspended after the 8th District ruling.

NEOERSD appealed to the Supreme Court, drawing friend-of-court briefs from the Coalition of Ohio Regional Districts, Association of Ohio Metropolitan Wastewater Agencies, National Association of Clean Water Agencies, Cleveland Metropolitan Park District, and a long list of area jurisdictions including Cleveland, among other parties.

Opposing NEORSD were the 1851 Center for Constitutional Law, Ohio Council of Retail Merchants, and a long list of other associations, jurisdictions and individuals.

Writing for the Court’s majority, Justice Paul Pfeifer said the Ohio Revised Code and the district's charter both give NEORSD the power to create the storm water program and charge fees. Central to his analysis was the law's definition of waste water as “any storm water and any water containing sewage or industrial waste or other pollutants or contaminants derived from the prior use of the water.”

Pfeifer added that specific language in the law authorizing fees for “any water resource project” allow NEORSD to collect the money from affected communities.

His opinion was joined in full by Chief Justice Maureen O’Connor and Justices Judith Ann Lanzinger and William O’Neill.

Justice Judith French concurred with NEORSD’s authority to create the program but not its power to collect fees, at least at this time. She noted that under state law, sewer districts may only charge for “use or services of” or “any benefit conferred,” noting the majority had not determined whether future infrastructure provides benefits now.

“Nothing in [the law] suggests that the sewer district may presently impose a fee for uses or services it will be able to provide only in the future,” she said. “Until the sewer district acquires, constructs or begins to operate a water-resource project relating to regional storm water management, it has no use, service or benefit to provide in exchange for the storm water fees it seeks to extract from property owners.”

Until then, the sewer district may fund the program through taxes and special assessments, revenue bonds, grants, and/or agreements with other political subdivisions, said French.

Justice Sharon Kennedy and Terrence O’Donnell dissented, saying that storm water runoff is not waste water and that related fees are an illegal tax.

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