Fiscal Note & Local Impact Statement

125 ^th General Assembly of Ohio

Ohio Legislative Service Commission

77 South High Street, 9^th Floor, Columbus, OH 43215-6136 ² Phone: (614) 466-3615

² Internet Web Site: http://www.lsc.state.oh.us/

 

State Fiscal Highlights

 

·        No direct fiscal effect on the state.

Local Fiscal Highlights

 

Note:  For most local governments, the fiscal year is the calendar year.  The school district fiscal year is July 1 through June 30.

 

·        Boards of county commissioners may impose filing fees for plan review (under continuing law), permit processing, and site inspections related to erosion control, sediment control, and water management at construction sites of one or more acres.  Presumably, fee revenue gained will be such that costs associated with conducting these activities will be offset.

·        County governments may gain revenue from court-imposed fines (between $100 and $500) for each day of violation of rules governing erosion control, sediment control, and water management at construction sites of one or more acres.

·        Boards of county commissioners are granted rule-making authority regarding the implementation of storm water program regulations and the prevention of sewer back-ups.  Increased staff time and minimal administrative expenditures may be associated with the creation of these rules.

·        Implementation of storm water program rules may include costs associated with plan review, issuance of permits, and site inspections.  Implementation of rules regarding the prevention of sewer back-ups may require the expenditure of sewer district funds, county general funds, or other state or federal moneys.  Counties may seek reimbursement for these costs, but may also, via resolution, opt not to require reimbursement.

·        Boards of township trustees of townships that have adopted a limited home rule government (limited home rule townships) are granted rule-making authority governing erosion control, sediment control, and water management in order to implement the applicable area-wide waste treatment management plan and to comply with storm water program regulations.  Potential minimal administrative expenditures may be associated with the creation of these rules.

·        Boards of township trustees of limited home rule townships, in rules adopted, may impose filing fees for plan review, permit processing, and field inspections related to erosion control, sediment control, and water management at construction sites of one or more acres.  Presumably, fee revenue gained will be such that costs associated with conducting these activities will be offset.

·        Boards of township trustees of limited home rule townships may gain revenue from court-imposed fines (between $100 and $500) for each day of violation of rules governing erosion control, sediment control, and water management at construction sites of one or more acres.

·        The bill grants "quicktake" authority to counties, limited home rule townships, conservancy districts, sanitary districts, county sewer districts, and regional water and sewer districts for the emergency construction of sanitary sewers.  This analysis assumes that under this authority, construction of sewers will proceed in roughly the same manner, and local entities will expend roughly the same amount of money, as would be required under non-emergency conditions.  Expenditures, which would have occurred regardless, will not increase or decrease as a result.

 

 

Detailed Fiscal Analysis

 

Phase II of the NPDES Storm Water Program

 

In December 1999, the U.S. Environmental Protection Agency (U.S. EPA) promulgated the expansion of the existing National Pollutant Discharge Elimination System (NPDES) Storm Water Program, known as Phase II, by designating additional sources of storm water for regulation.  The regulations affect operators of municipal separate storm sewer systems (MS4s) and small construction sites.[1]  Operators of MS4s are required to develop a storm water management program that implements six minimum control measures and that utilizes a "Best Management Practice" approach.  The six control measures are public education and outreach, public involvement and participation, elimination of illicit discharges, construction site storm water runoff management, post-construction storm water management, and pollution prevention for municipal operations.

 

This bill provides counties with the authority necessary to implement, specifically, the construction site and post-construction storm water management measures (Phase II).  Boards of county commissioners are granted rule-making authority to require persons to file plans that govern erosion control (new language), sediment control, and water management (existing language) prior to construction activity on sites one acre or larger. Rules may also impose fees for plan review (existing language), permit processing, and field inspections (new language).  The process of rule making may require increased staff time and potentially, minimal increases in administrative costs for counties.

 

The bill provides boards of township trustees of limited home rule townships with the authority necessary to implement the construction site and post-construction storm water management measures (Phase II). Boards are granted authority to adopt rules governing erosion control, sediment control, and water management. These rules may require plans governing erosion control, sediment control, and water management prior to construction activity on sites one acre or larger, and may also impose fees for plan review, permit processing, and field inspections.  The process of rule making may require increased staff time and, potentially, minimal increases in administrative costs for limited home rule townships.

 

Counties and limited home rule townships that impose fees for plan review (if they are not already doing so in the case of counties), permit processing, and field inspections will experience gains in revenue, but these gains will likely be offset by increased staff time and expenditures associated with actually reviewing the plans, processing the permits, and conducting the field inspections. 

 

Some counties have delegated these responsibilities to their respective Soil and Water Conservation Districts, which under section 1515.08 of the Revised Code have the authority to charge for services within the district.[2]  Not all counties, and not all Soil and Water Conservation Districts, charge fees.  Those districts that do so will likely continue to; and the bill, counties may begin to charge fees not only for plan review, but also for permit processing and field inspections.

 

Penalties for Violation of Board Rules

 

The bill describes procedures under which a person found to be in violation of rules established by boards of county commissioners, or boards of township trustees of limited home rule townships, may be penalized.  If the applicable board or its representative determines that a person has violated the rules, the applicable board or its representative may issue an immediate stop work order if the person failed to obtain necessary federal, state, or local permits.  Regardless of whether or not the person has obtained the necessary permits, the applicable board or its representative may issue two notices of violation, and then, if the violation continues, a stop work order may be issued and the applicable board or its representative must request the prosecuting attorney of the county to seek an injunction or some other measure intended to secure compliance with the rules.  If an injunction is sought, courts may assess a fine of no less than $100 and no more than $500 for each day of violation.  This provision may result in increased revenue for counties and limited home rule townships, depending on the frequency and duration of rules violations, and on whether a court chooses to assess a fine.  Separately, a person may appeal the issuance of a stop work order to the court of common pleas of the county in which it was issued.  This may result in minimal increased administrative expenses for counties.

 

"Quicktake" Appropriation Authority

 

Counties, limited home rule townships, conservancy districts, sanitary districts, county sewer districts, and regional water and sewer districts are granted authority to appropriate property for the emergency construction of sanitary sewers without first having to obtain a jury assessment of the amount of compensation to be paid to property owners.  This authority, dubbed "quicktake," is triggered by a finding of the Ohio Environmental Protection Agency (Ohio EPA) or by an order of a board of health regarding the existence of a public health nuisance caused by unsanitary conditions that compel the immediate construction of sewers.  Information provided by Ohio EPA indicates that the agency issues ten to fifteen orders per year to abate unsanitary conditions through the construction of sanitary sewers.

 

With respect to the fiscal effect of granting quicktake authority, this analysis assumes that counties, limited home rule townships, and other local entities that engage in the emergency construction of sewers will do so in roughly the same manner, and will expend roughly the same amount of money, as would be required under non emergency conditions.  In short, sewers will be constructed sooner rather than later, but expenditures (which would have occurred regardless), will not increase or decrease as a result.  There are a number of funding opportunities available to local governments for sewer construction.  A common means of securing necessary up-front capital is through the issuance of bonds.  In addition, local governments may obtain financing through the Water Pollution Control Loan Fund (WPCLF), which is administered by Ohio EPA's Division of Environmental and Financial Assistance.  The WPCLF provides below-market interest rate loans for wastewater treatment works projects that are owned by public entities.  Loan moneys may be used to finance all eligible portions of a proposed project, or may be used in combination with other funding sources.  Additional assistance may be obtained through sources such as the Ohio Water Development Authority, the Ohio Public Works Commission, the U.S. Department of Agriculture's Rural Development Administration, and the U.S. Department of Housing and Urban Development's Community Development Block Grant Program.  Once a sewer is constructed, users are typically charged a "tap-in" fee that may offset some of the costs of construction.  The fee is typically substantial, and can average between $5,000 and $10,000 per household.  The charge is in addition to a household's monthly, bimonthly, or quarterly sewer and water charge.

 

Prevention of Sewer Back-ups

 

Boards of county commissioners are granted rule-making authority that would require owners of property that have experienced one or more overflows of sanitary or combined sewers operated by the board to prevent sewer back-ups.  Counties may use sewer district funds, county general funds, or other loans, grants, or federal or state moneys available for the prevention of sewer back-ups.  Rules must require the reimbursement of moneys expended for this purpose, but a county may adopt a resolution that specifies an amount that need not be reimbursed.

 

These provisions of the bill are specifically applicable to the Metropolitan Sewer District of Hamilton County.  The district is required, under the conditions of two consent decrees negotiated with U.S. EPA and Ohio EPA, to expend a total of $1.5 billion between now and the year 2022 to correct issues within the district concerning sanitary sewer overflows, combined sewer overflows, water treatment, and basement back-ups and other related water issues.  The proposed changes to section 6117.012 of the Revised Code deal specifically with basement back-ups, and grant the district the authority it requires to proceed with reimbursement payments to households that will be required to install back-up prevention devices.  Approximately 940 households are affected, and the estimated range of reimbursement payments to each household is between $2,000 and $40,000.  The total cost of the project is estimated at $37.5 million over the next five years.  The district is obtaining the financing it requires up front through the issuance of bonds.  Rate-payers within the district will then be required to pay an annual increase in their sewer and water charges of approximately 0.75% per year for the next five years.  Currently, the average sewer and water charge for a residential consumer in the district is $340 per year.  After five years, the average charge is likely to be $353.

 

 

 

LSC fiscal staff:  Ann Braam, Budget Analyst

Kerry Sullivan, Budget Analyst

 

HB0411EN.doc/th

 

House Bill 411 in pdf format