Attributes to Withstand Legal Challenges

Among the more than 1,700 stormwater utilities across the United States, legal challenges typically fall into two categories: 

  1. whether the locality or entity has adequate authority to enact, implement, and fund the utility, and
  2. whether the fee structure is fair, exhibiting a clear nexus between the services provided and the fee charged.

In New Jersey, the Clean Stormwater and Flood Reduction Act was specifically enacted to authorize our communities to create a utility and charge fees to support stormwater management activities. Thus, the legality on that count should garner few challenges. As a result, how a community structures its fee system will likely bear the most legal scrutiny.  

In order to ensure that your utility is optimally defensible, it should exhibit the following attributes:   

  • The fee must be fair and equitable, treating all rate-payers based upon their contribution to the stormwater problem. The rate must also be uniformly applied across all customer classes, regardless of which fee calculation methodology is utilized.
  • The cost of the service must match or at least approximate the revenue raised, truly situating it as a fee, rather than a tax. (Key case law: El Paso Apartment Association vs. City of El Paso, 2011.)
  • Revenue can only be used for stormwater management activities, as defined in the statute (It must be generated for its regulatory purpose). (Key case law: Bolt v. City of Lansing, 1998.)
  • The user fee must only apply to those who contribute to the problem, also providing an opportunity for users to lessen their burden through credits. An appeals process should also be provided. (Key case law: City of Gainesville vs. State of Florida Department of Transportation, 2003.)
  • Fees related to combined sewer overflow (CSO) must be apportioned properly among stormwater and sanitary flows so that rate-payers aren’t charged twice.

For more information on legal challenges, see NACWA, “Navigating Litigation Floodwaters: Legal Considerations for Funding Municipal Stormwater Programs” (2014), WEF: User-Fee-Funded Stormwater Programs (2013), and the legal section of our Resources page here.

The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content and materials available on this site are for general informational purposes only.  Readers, users, or browsers of this site should contact their attorney to obtain advice with respect to any particular legal matter.  All liability with respect to actions taken or not taken based on the contents of this site are hereby expressly disclaimed.

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