Businesses fear huge bills from stormwater fee
Posted: 9:54 am Tue, March 26, 2013
ANNAPOLIS — Bill Blanchett crunched some numbers and cringed.
Under legislation pending before the County Council, which would charge property owners to help pay for stormwater pollution cleanup, he’ll get an annual bill in excess of $20,000 for one of his four commercial properties.
That’s more than his annual property tax bill on the Curtis Bay industrial complex.
“I would say I couldn’t believe that would be true,” said Blanchett, owner of Chesapeake Geosystems Inc. and several industrial properties in Curtis Bay. “And I hoped I was wrong.”
He’s not the only one likely to be shelling out big bucks. Several large businesses with property in the county — including Baltimore Gas and Electric Co., Northrop Grumman and Westfield Annapolis mall — could be paying hundreds of thousands of dollars annually.
Blanchett said he’ll likely have to pass that cost on to his seven tenants, and he expects he could lose one or two. He also said he’ll curtail plans to expand his businesses in Anne Arundel County.
“This has put me over the edge,” Blanchett said.
The council must balance the concerns of Blanchett and other property owners with a state mandate that Maryland’s 10 largest counties establish stormwater fees.
Under the legislation introduced in January by former County Executive John R. Leopold, most Anne Arundel homeowners will pay $85 a year. Owners of condominiums and townhouses will pay $34 a year.
An owner of a single-family home on a larger lot — such as those in the county’s rural areas — will pay $170. Commercial property owners will pay a fee based on the amount of paved surface they have. The legislation is expected to raise more than $26 million in its first year.
Environmentalists are lobbying hard for the bill to pass.
“Over half the streams in Anne Arundel County are severely degraded and, as a result, dump tons of sediment into our rivers with every big rainfall,” Kincey Potter and Bob Gallagher, leaders of the Maryland League of Conservation Voters’ Anne Arundel chapter, wrote in an email to members.
But the legislation has people like Glen Paine worried.
“I guess they’re calling it a fee, not a tax,” said the executive director of The Maritime Institute of Technology and Graduate Studies, a Linthicum nonprofit organization. “Call it what you want, it’s still quite a bit of money.”
He’s still trying to figure out what his annual bill will be for the campus, which covers 40 acres. Retention ponds collect the stormwater that drains from parking lots and the school’s other impervious surfaces, and he wonders why that isn’t enough.
Councilmen spent hours last week debating nearly two dozen amendments to the bill. They struck down an amendment to cap the fee for businesses at 20 percent of their annual property tax bill, and one to cap the fees at $25,000 per property.
The council is still considering other amendments, including one to limit the fee to 50 percent of property tax bills.
County Executive Laura Neuman said she “strongly supports” a cap and that 50 percent seems fair.
“At the end of the day, the state had mandated it,” Neuman said. “Do I agree with it? No.”
Though stormwater restoration is particularly important for Anne Arundel County, Neuman said, the fee is difficult to apply fairly.
Councilman Chris Trumbauer, D-Annapolis — who co-sponsored the bill with Councilmen Dick Ladd, R-Severna Park, and John Grasso, R-Glen Burnie — said the council wants to reduce the burden on businesses.
“There is no question in my mind that we are going to do something,” Trumbauer said. “But what exactly that looks like is not determined yet. The worst thing is if you did a fee and it didn’t do the job. We want it to be fair and to do the job.”
The council amended the bill to limit fees levied on private roads and on properties owned by homeowners’ associations. Councilmen also passed an amendment that would limit the fee for properties owned by churches and religious organizations.
Bob Burdon, president of the Annapolis and Anne Arundel County Chamber of Commerce, endorsed the bill, saying it will boost the local economy.
A report from the University of Maryland’s Environmental Finance Center said for every $100 million the county pours into stormwater-related capital projects, about $225 million would be poured back into the local economy and 776 jobs would be created.
The report also found that for every $10 million invested in operations and maintenance of the projects, more than $33 million would be returned to the county and 118 jobs would be created.
Council Chairman Jerry Walker, R-Gambrills, said he remains concerned about the owners of business parks and strip malls.
Walker said those properties, usually constructed bit by bit, are broken up into several tax parcels. Each will be billed separately, but the owner of the plaza will get all of those bills.
That could add up to hundreds of thousands of dollars, Walker said. Though the county Department of Public Works compiled a list of the 10 commercial property owners who will pay the most under the legislation, the owners of large business parks may end up paying more than anyone.
“I’ve talked to people to try to find some sort of solution,” Walker said. “They’ll pass it on to the businesses that are in those parks, and the less money they have to give people raises, and then they have to turn around and charge their customers.”
Tom Pilon, vice president of development for Baltimore-based St. John’s Properties, said his company is looking at paying $14,000 per year per lot. The company owns a dozen commercial properties in the county, which adds up to about 120 lots.
Yes, Pilon said, that could trickle down to tenants.
Trumbauer said he’s more concerned about providing some relief to smaller businesses.
Owners of malls, for example, have millions of square feet of retail space, he said.
“They have the ability to pass that fee on in other ways,” Trumbauer said. “We all own a little bit of the problem.”
Walt Townshend, president of the Baltimore Washington Corridor Chamber of Commerce, said the fee is likely to catch many business owners off guard.
“It’s like getting a notice from the IRS saying that you owe another $20,000,” Townshend said. “People are just totally unaware.”
He said he’d like to see Anne Arundel County phase the fee in, as Montgomery County is planning to do.
“It’s going to be less of a struggle if I only have a third of the pie to eat at once instead of the whole pie,” he said.