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Judge strikes down Montgomery County’s ‘rain tax’

(Flickr / Jim Champion / “Raindrops” / CC BY-SA 2.0 / cropped and resized)

(Flickr / Jim Champion / “Raindrops” / CC BY-SA 2.0 / cropped and resized)

A Montgomery County Circuit Court judge on Wednesday struck down the county’s stormwater fee, saying it is unmoored by the county’s cost of providing runoff protection as required by state law.

Absent a successful appeal, Judge Nelson W. Rupp Jr.’s decision will likely compel the county to redraft its Water Quality Protection Charge to mirror its costs for providing the environmental service.

Rupp’s ruling is most directly a victory for developer Paul N. Chod, whom the county had socked with a more than $11,000 stormwater charge related to his 34-acre commercial Shady Grove Development Park in Gaithersburg. The judge found that Chod’s company, Germantown-based Minkoff Development Corp., provided its own stormwater protection and therefore owes nothing to the county under the WQPC, derisively referred to as a “rain tax” by its opponents.

“Our client has been a poster boy for stormwater management,” said James L. Thompson, a lawyer for Chod.

James Thompson (File)

James Thompson (File)

The section provides that counties that assess the stormwater remediation fee “shall” charge an amount “based on the share of stormwater management services related to the property and provided by the county or municipality.”

Rupp rejected Montgomery’s argument that the section’s language permits the county to charge a fee greater than its out-of-pocket costs.

“The statute still requires that the WQPC be based on the county’s stormwater management services that are related to the property,” Rupp wrote in his eight-page opinion. “The statute clearly requires the imposition of a fee that is reasonably connected to the county’s stormwater management of the property.”

Montgomery County spokesman Patrick Lacefield stated in an email that the county is “reviewing the decision, including the option of appeal.”

Thompson, of Miller, Miller & Canby Chtd. in Rockville, hailed Rupp’s ruling as “a blow for fairness,” saying his client had paid the total cost for the development park’s stormwater management yet still received a bill from the county.

‘Arbitrary and onerous burden’

The litigation arose in 2013 when the Montgomery County Department of Environmental Protection assessed a $14,932.17 WQPC against Chod, who then applied for a credit. The department reduced the charge by 25 percent, to $11,199.13.

Chod sought review by the Board of Appeals, arguing he was entitled to a 100 percent credit because he had paid the full cost of stormwater management with no contribution by the county. The board disagreed but concluded a 50 percent credit was in order, reducing the charge to $7,466.08.

Chod then appealed to the circuit court.

“They [the county] gave us 50 percent credit but we gave 100 percent treatment,” said Thompson, whose co-counsel was colleague Diane E. Feuerherd. “We’re pro-environment, we’re pro-bay, but we want to be treated fairly. That’s why we have a justice system.”

Rupp, in ruling for the developer, noted the relative financial contributions of Chod and the county toward stormwater management at the Gaithersburg development.

“[Chod’s] stormwater retention pods service an area three times the size of the Shady Grove Development Park and receive essentially no services from the county in return,” Rupp wrote. “Property owners like [Chod] are thus being burdened with the same charge as other property owners despite bearing the cost of managing the property themselves. Such an application of the statute clearly violates the intentions behind the law, thus creating an arbitrary and onerous burden on [Chod].”

The case is Paul N. Chod v. Board of Appeals for Montgomery County, 398704V.