On March 18, 2019, New Jersey’s ability to improve water quality, and more quickly recover from weather related disasters, took a giant leap forward when the Governor signed the Clean Stormwater and Flood Reduction Act (P.L.2019, c. 42 (C.40A:26B-1 et al.). The Clean Stormwater and Flood Reduction Act authorizes, but does not require, the establishment of stormwater utilities and provides for a dedicated funding source to be used only in furtherance of stormwater management.

Stormwater Management Plans

Pursuant to the federal Clean Water Act and the New Jersey Pollutant Discharge Elimination System Rules (N.J.A.C. 7:14A-25), municipalities must develop Stormwater Management Plans and must manage stormwater emanating from within the municipality pursuant to a Municipal Separate Storm Sewer System Permit (i.e. MS4 Permit) issued and enforced by the New Jersey Department of Environmental Protection.  The NJPDES rules also provide requirements for discharges of stormwater from combined sewer systems (CSS).  The Clean Stormwater and Flood Reduction Act was designed to provide assistance and additional tools to municipalities and other local government units to enable them to address aging stormwater infrastructure and proactively accomplish their stormwater responsibilities through the ability to delegate critical tasks and through the creation of a dedicated funding source, which will allow for efficient, effective and proactive stormwater planning and management.

Formation of a Stormwater Utility

The Clean Stormwater and Flood Reduction Act amends existing statutes to allow municipalities, counties, sewerage authorities, municipal and county utility authorities, and county improvement authorities to, by resolution or ordinance establish a Stormwater Utility. (The Act amends the following New Jersey statutes: Sewerage Authorities Law, Municipal and County Utilities Authorities Law, County Improvement Authorities Law, Municipal and County Sewerage Act, and the Municipal and County Flood Control Financing Act.) The limited purpose of a Stormwater Utility is to acquire, construct, improve, maintain, and operate stormwater management systems in the county/counties or municipality/municipalities creating it, consistent with State and federal laws, rules and regulations. 

Stormwater includes precipitation, including rain and snow, and includes precipitation conveyed by snow removal equipment.  Under the Clean Stormwater and Flood Reduction Act, the governing body of any county or municipality (or governing bodies of any two or more counties or municipalities) may by resolution or ordinance, establish a stormwater utility, or request that a sewerage authority establish a stormwater utility, for the purposes of acquiring, constructing, improving, maintaining, and operating stormwater management systems in the county or municipality, consistent with state and federal laws, rules, and regulations. 

Powers Conferred

The county, municipality, sewerage authority, municipal and county utility authority, county improvement authority establishing a stormwater utility would be empowered to charge and collect reasonable fees and other charges to recover the stormwater utility’s costs for stormwater management. These fees and other charges may be charged to and collected from the owner or occupant, or both, of any real property from which originates stormwater runoff which directly or indirectly enters the stormwater management system or the waters of the state. Any fee or other charge that a county, municipality, or authority charges and collects must be based on a fair and equitable approximation of the proportionate contribution of stormwater runoff from a real property. Credits must be provided for with respect to properties that maintain their own stormwater systems, including green infrastructure. Utilities should consult NJDEP guidance carefully, as there are certain stipulations for establishing a stormwater credit program. Exemptions must also be provided solely for land actively devoted to agricultural or horticultural use that is valued, assessed, and taxed pursuant to the “Farmland Assessment Act of 1964”.  No particular methodology for calculating fees is mandated in the law; however guidance regarding the means and methods for such calculations will be provided in a forthcoming Guidance Manual from the NJDEP.

A Stormwater Utility may acquire by gift, grant, purchase, or condemnation, or in any other lawful manner, any privately-owned stormwater management system, or any real property necessary for the construction, improvement, operation, or maintenance of a stormwater management system and may contract with others for the construction, improvement, maintenance and operation of the Stormwater Management System.  It may also bond for the purpose of paying all or any part of the cost of the Stormwater Management System, and may enact and enforce resolutions, ordinances, and regulations governing the planning, management, implementation, construction, maintenance, and operation of the Stormwater Management System, provided that they are consistent with federal and state law and regulation. Stormwater Utilities may utilize competitive contracting to enter into contracts for the construction, improvement, operation or maintenance of stormwater management systems.

Stormwater Utility Account

The money collected pursuant to this Law must only be used to pay for or recover all or a portion of the cost of enumerated purposes:  establishment of a stormwater utility and related administrative expenses; capital expenditures, including acquisition, construction, and improvement of a stormwater management system; operation and maintenance of a stormwater management system; development and implementation of asset management programs for stormwater management systems; development and implementation of a stormwater management plan and stormwater control ordinances; actions required by any NJPDES Permit; any long-term control plan to mitigate combined sewer overflows pursuant to State or federal law, rule, regulation, permit, or consent decree; monitoring, inspection, and enforcement activities; public education and outreach related to stormwater management; and any other purpose related to stormwater management as may be authorized by the department, the Division of Local Government Services in the Department of Community Affairs, or the Local Finance Board pursuant to rules, regulations, or permits.

Annually, five percent of all fees collected, up to $50,000, must be remitted to the State Treasury to be deposited into a newly created “Clean Stormwater and Flood Reduction Fund.” Monies deposited in this Fund are specifically dedicated and can only be used by NJDEP to fund planning, implementation and coordination activities related to stormwater utilities; water quality monitoring and assessment; point and non-point source water pollution reduction projects; implementation of the NJDEP stormwater management program and a public education and outreach program relating to stormwater management.

Guidance

NJDEP, in consultation with the Board of Public Utilities and Division of Local Government Services, and with the input of stakeholders, must develop and periodically update a Stormwater Utility Guidance Manual.  The Guidance Manual, which is required to be released in March 2021, must include Stormwater Utility reporting requirements; technical assistance for the establishment of a stormwater utility; means and methods for calculating and revising fair and uniform stormwater utility fees and appropriate credits and exemptions; information on developing an asset management program and incorporation of green infrastructure; as well as, public education and outreach guidance.