After five years of litigation, the Ohio Supreme Court issued its decision today in Northeast Ohio Regional Sewer District (NEORSD) v. Bath et. al., upholding the District’s authority to implement a storm water management program. The Supreme Court’s decision overturns an prior ruling by the Appellate Court which had held NEORSD did not have legal authority to regulate storm water.
The legal issue was rather simplistic- Does the NEORSD grant of authority to control waste water include storm water?
The District authority stems from statute. R.C. 6119.01 states the authority of the District has either to a) supply water; or b) "provide for the collection, treatment, and disposal of waste water." R.C. 6119.011(K) defines "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."
The Appellate Court concluded that storm water is only waste water when it is co-mingled with other pollutants or sewage. If storm water is not co-mingled in this way (i.e. typical storm water runoff), then the Appellate Court held the District has no authority to regulate the runoff.
The Supreme Court held there are two categories of water the District can regulate. The Court held the category of "waste water" includes:
- "storm water;" and
- "any water containing sewage or industrial waste or other pollutants or contaminants…"
After concluding that the Sewer District has authority to implement a regional storm water management system, the Court then reviewed whether the District has authority to assess fees for projects that have yet to be built. A majority of the Court concluded that the District does have authority to assess fees now to finance future storm water management projects.
Restarting the Storm Water Fee
As noted in the Cleveland Plain Dealer article discussing the decision, the Common Pleas Court has held $20 million in fees collected prior to the Appellate Court ruling in escrow. After the Appellate Court ruling, the fees- approximately $35 per household per quarter- were put on hold. The District now says it will begin to collect fees again as well as ask for release of the funds in escrow. The District also stated it would not attempt to retroactively collect fees that would have been assessed while the Appellate Court decision was on appeal.
Practical Implications for Industry
The amount of fees paid depends on that amount of impervious surface at the property. Businesses with large parking lots or buildings could face thousands in storm water fees. The fees will act as a strong financial incentive for businesses to manage storm water at their properties in a different manner, including reducing impervious surface or discharges to storm sewers.
The District will also be implementing projects in the region, including providing 25% of the fees collected to local governments to implement their own projects.
Overall, the Supreme Court Decision will clearly have major implications for businesses that operate within the NEORSD service territory.