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Update: Governor Signs Clean Stormwater and Flood Reduction Act into Law Paving the Way for Stormwater Utilities
By Natalia P. Teekah on May 3, 2019

Communities in New Jersey have long been in need of a means to help mitigate the effects of stormwater runoff. Road closures and property damage caused by flooding are common occurrences after major storms that can prove costly to municipalities and property owners.  Moreover, an estimated 60 percent of water pollution in the state can be attributed to stressed or poorly maintained stormwater systems. As the rate of development increases across the state, so too does the amount of impervious surface, further straining already overtaxed stormwater management systems.

On March 18, 2019, Governor Phil Murphy signed Senate Bill 1073 into law, creating the Clean Stormwater and Flood Reduction Act ("Act"). The Act seeks to provide a means of funding stormwater infrastructure by authorizing the creation of stormwater utilities and allowing those utilities to assess fees.

Stormwater Utilities

The Act offers flexibility in the establishment of stormwater utilities, allowing governing bodies to choose whether to maintain the status quo; establish an independent stormwater utility; request that an existing municipal or sewerage authority establish a stormwater utility; or request that an existing county sewerage utility or improvement authority establish a stormwater utility. Municipalities are also permitted to enter into shared service agreements with other municipalities and with the counties in which they sit. The Act as passed also allows the owner of a pre-existing, compliant stormwater management system to dedicate the system to a governing body.

Fees

Fees assessed by utilities established under the Act will be based on a fair and equitable approximation of the proportionate contribution of stormwater runoff from any real property. Fees can be used to pay for and recover the costs of planning, constructing, operating, maintaining, and monitoring stormwater systems, among other uses. Property owners or operators subject to fees may be eligible for fee reductions based on implementation of stormwater best management practices and use of green infrastructure.

DEP Guidance

The Act tasks the New Jersey Department of Environmental Protection ("DEP") with developing a guidance manual to aid counties, municipalities, and authorities in developing an effective stormwater utility. The guidance manual will address: (1) technical assistance in establishing utilities; (2) factors to consider in setting stormwater utility fees; (3) information for developing an asset management program for stormwater management systems; and (4) public outreach and education relating to stormwater management systems.

Parker McCay's attorneys have experience representing municipalities, utility authorities, and property owners in stormwater management matters. If you have questions about the Clean Stormwater and Flood Reduction Act and what the options are for your organization, please contact our Public Finance, Municipal, and Environmental Departments.

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