By Adam Pagnucco.

Montgomery County’s Department of Environmental Protection (DEP) has sent letters to residents announcing the cancellation of 25 stormwater projects currently in design.  We reprint one below.  We have redacted the name of the specific project to protect the recipient of the letter.

We have two questions.  First, why are these cancellations being announced considering that the county has agreed to a consent decree requiring that the county build a number of unspecified “supplemental environmental projects” because it did not meet the terms of its state-issued stormwater permit?  And second, if the county really can cut its project count and remain in compliance with its stormwater permit and its consent decree, will its water quality protection charge – which has been increased by more than 1100% in the last fifteen years – be reduced?  After all, the purpose of that charge as well as the bag tax is to finance these projects.

Elected officials and candidates for office, we respectfully request that you ask questions about this.

By Patrick Lacefield.

Sorry, but Seventh State’s take on the County’s changes in stormwater management was off the mark in some ways – but interestingly enough it was right on the mark in making our case for the change.

First, stormwater management (not the most exciting or high profile issue) has long been a focus of the County Executive, going back to his Council days. He has long had a track record of moving the County toward arduous environmental goals that have made the County a leader in this arena.

Second, the reason he has proposed changes is because the current approach to completing the State-required environmental stormwater management has proven to be inefficient and costly. The design and construction of projects to treat the stormwater was taking several years longer than orignally planned.  The contracting approach was not focused on getting maximum performance.

As Seventh State correctly pointed out, costs to taxpayers have increased. The initial fee for this program was approximately $8 per household. It is now over $100 per household; and if we maintain the status quo, it would rise another $10 to $15 per year for the next 3 or 4 years. That is unacceptable.

Third, the County has already restored 5,000 acres of impervious surface under MS4 permits over the last 10 years. This is more acreage than any other jurisdiction in the state of Maryland has accomplished. It is also important to note that the MS4 permit program has never been done before. No jurisdiction in the State, nor even the State itself, has had experience with setting requirements or determining how the requirements would be met. We were the pioneers.

Also, there was no lawsuit or “series of lawsuits” over the County’s consent decree with the State. The County entered into a consent decree with the State because it fell short in meeting the impervious surface restoration piece of the permit. All other requirements of the 2010 permit have been met. The consent decree gives the County until December 31, 2020 to meet the terms. However, it is anticipated that pending State approval, the County will meet the impervious acre restoration requirements of the 2010 permit by the end of this year – well ahead of time.

Again, there is no “privatization” here. All of the stormwater construction work is already being done by private contractors. The County does not build nor maintain stormwater management facilities. We oversee, authorize, and ensure compliance with environmental regulations; and that does not change.

Under our new contracting method, the permittee will always be the County, so the responsibility to ensure the permit requirements will remain with the County. This allows companies that do this work as their primary and only function to assume the risk for costs and completion. It’s called performance-based contracting. DEP can then be left to do what it does best: regulate, monitor and inspect. We are simply removing the layers of contracts that bog down and complicate the work.

County staff will continue their work to develop other MS4 permit requirements including  watershed implementation plans and pollution prevention plans; identifying the target areas for the most effective Total Maximum Daily Load reduction location; increasing education and outreach as well as public involvement and participation; maintaining an illicit discharge detection and elimination program; continuing inspections and maintenance of an ever-increasing stormwater management facilities program. That will not change.

Patrick Lacefield is Montgomery County’s Director of Public Information.

Pagnucco’s Response

Patrick Lacefield says we are “off the mark,” but two of his claims are refuted by the draft consent decree itself.

First, he says that there was no lawsuit or “series of lawsuits.”  In fact, the consent decree describes prior litigation on page 4, which we reprint below.

Second, he says, “The County entered into a consent decree with the State because it fell short in meeting the impervious surface restoration piece of the permit. All other requirements of the 2010 permit have been met.”  But the consent decree lists a host of additional reporting violations on pages 5, 6 and 7 which we reprint below.

Now to the broader point.  Perhaps the Executive Branch is right that there is a more cost efficient way to meet its stormwater obligations.  In this post, Lacefield calls it “performance-based contracting” whereas the County Executive’s memo calls it a “public-private partnership contracting vehicle” (P3).  The Executive correctly points out that Prince George’s County has already entered into a P3, although it might be too new to fully judge its performance.  Whatever the exact nature of the Executive’s proposal, maybe it’s worth talking about, especially since – as Lacefield says – the water quality protection charge is forecast to rise by 17% between FY20 and FY23.  Let the public discussion begin.

By Adam Pagnucco.

In a memo sent to the County Council last week, County Executive Ike Leggett said he intends to pursue a public-private partnership (P3) to administer the county’s stormwater management program.  That decision is particularly interesting given the facts that the State of Maryland has alleged that the county committed numerous violations of its stormwater permit and the county agreed to a consent decree in January.

The potential P3 and the consent decree relate to the county’s responsibilities under its Municipal Separate Storm Sewer System (MS4) Permit, which is a state and federal mandate on large jurisdictions to undertake stormwater projects designed to improve the Chesapeake Bay.  Under the latest permit issued by the state for the period of 2010 through 2015, the county is responsible for assessing sources of pollutants in runoff, identifying best management practices in stormwater control, establishing and inspecting management systems to control runoff and restoring twenty percent of its impervious surface area that has not already been managed.  The principal source of the county’s funding for stormwater activities is its Water Quality Protection Charge, established in 2002, which is levied on property tax bills.  The charge, which is not subject to the county’s charter limit on property taxes, has increased by more than 1100% over the last fifteen years.

While the charge is intended to be used for stormwater projects, it is in fact used for a lot more than that.  In FY18 (estimated), more money from the Water Quality Protection Fund went to the operating budget ($26.8 million) and a transfer to the rest of the general fund ($1.6 million) than to the capital budget ($5.4 million) and debt service on capital projects ($6.1 million).  And so most of the proceeds from the charge do not actually go directly into physical stormwater capital projects.

During the 2010-2015 permit period, a series of lawsuits were brought against the MS4 permits issued to several counties, including Montgomery.  The end result in Montgomery’s case was a consent decree agreed to by the county and the state in January.  (The state’s website does not list any other county as having a consent decree.)  According to the consent decree, the Maryland Department of the Environment alleged numerous violations of the MS4 permit by the county, including running up deficits of unrestored impervious land of 2,004 acres in FY15 and 1,860.5 acres in FY16 as well as many reporting failures.  The consent decree requires the county to build a number of supplemental environmental projects, which are not listed in the decree itself, by 12/31/20.

Here is a question: with the water quality protection charge almost tripling between 2010 and 2015, why was the county deficient in restoring thousands of acres as it was supposed to do under its stormwater permit?

Also of note is that the Department of Environmental Protection (DEP), which manages the county’s stormwater activities, is currently led by an Acting Director.  The previous Director served for less than two years and left for “professional and personal reasons.”

Perhaps in connection with all of the above, County Executive Ike Leggett told the County Council in a memo last week the following: “The department [of Environmental Protection] also intends to pursue a public-private partnership contracting vehicle for the anticipated new Permit – a mechanism that has provided significant cost efficiencies in other jurisdictions such as Prince George’s County.”  The memo is 99 pages long, but we reprint pages one and two, which contain the reference to the P3, below.

This raises a number of questions.  What will the scope of the P3 be?  Will the P3 be subject to open bidding or will it be a sole-source contract?  How will the concessionaire be compensated?  How will the county oversee the concessionaire’s operations?  To the extent that they are affected by the P3, what recourse will property owners have in dealing with the concessionaire’s decisions?  (This is not an academic question given the activities of the Purple Line’s P3 concessionaire.)  Since the county faces legal liability to the state in connection with the consent decree, is it wise to vest compliance in a private entity?  Would that entity agree to indemnify the county if it fails to achieve the mandates in the consent decree?  As for the “significant cost efficiencies” claimed in Prince George’s County, their P3 is only three years old and was described as the first of its kind when it was signed.  Does that P3 have enough of a track record to make it a model for MoCo?

Another question.  Environmental regulation is a core function of government.  Selling alcohol is not.  How on Earth does it make sense that a county would socialize alcohol sales and privatize environmental protection?

Finally, here is the biggest question of all: why now?  The current County Executive has less than nine months left in his time in office.  A P3 is a major structural change to the county’s operations and the one in Prince George’s has a thirty-year duration.  Is this an issue for the next Executive and council to decide?  Or should they and their successors be bound by an administration with only a short time left in office?

It’s time for a public discussion of the county’s stormwater performance issues and the appropriateness of a P3.  We ask the County Council to raise it during the discussions of Leggett’s last budget in the coming weeks.