Legal Mechanics of Creating a Stormwater Utility

Organizationally, there are multiple pathways to implementing a stormwater utility, and the basic options are listed below.  Municipalities are not required to pursue any particular choice, but rather may decide which one suits their needs.  

Under the Clean Stormwater and Flood Reduction Act, the legal mechanics of creating a stormwater utility begin with the passage of an ordinance or resolution. From there, an entity will take specific steps, depending on its organizational structure.  

Click on the tabs below to explore the mechanics for each organizational structure.

If a stormwater utility is desired, the governing body of a county or municipality will first need to enact an ordinance or pass a resolution to create a stormwater utility. The ordinance or resolution will detail the creation of the municipal or county utility as a new department or as an operation of an existing department. After passing the ordinance or resolution, the entity will then submit a copy of the document to the New Jersey Department of Environmental Protection (NJDEP), and the Division of Local Government Services, in the New Jersey Department of Community Affairs (DCA).

If a stormwater utility is desired, municipalities that have established a municipal sewerage authority or a municipal utilities authority are required to request by ordinance, or parallel ordinances, that the authority establish a stormwater utility on its behalf. The authority may then create the utility by entering into a service agreement between itself and the requesting entity(ies). The text of the agreement is required to enumerate the powers, duties, and functions of the stormwater utility.  A stormwater utility established in this manner will be considered a separate operation of the authority to be budgeted and accounted for as such. As a final step, the authority will then submit a copy of the service agreement to the NJDEP and DCA.   

It is important to note that any municipality that contractually delegates any of its responsibilities under NJPDES, continues to remain responsible for compliance with any rules, regulations, orders, or permits if the delegated authority fails to meet such requirements.

If a stormwater utility is desired, counties that have established a county sewerage, county utilities, or county improvement authority are required to request by resolution that the authority establish a stormwater utility on its behalf. The authority may then establish the utility by entering into a service agreement between itself and the requesting county. Like its municipal counterpart above, the utility established in this section will be considered a separate operation of the authority, and will be budgeted and accounted for separately. As with all established stormwater utilities, the authority will next submit a copy of the service agreement to the DEP and DCA. 

Two or more municipalities, or one or more municipalities, and the county in which the municipality or municipalities are located, may pass a resolution to establish a stormwater utility.  Once the resolution is passed, the entities will enter into a shared services agreement. Once the shared services agreement is executed, all parties must submit a copy to the NJDEP and the Division of Local Government Services in the Department of Community Affairs.

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