Cast of characters

CLAIMANTS: San Diego County and its 21 cities

RESPONDENT: California Regional Water Quality Control Board, which enforces stormwater permitting that affects 7,800 square miles of surface water statewide through nine regional boards.

ADJUDICATOR: California Commission on State Mandates, which adjudicates claims of local entities seeking reimbursement for alleged state-mandated programs.

Wearing a baby blue button-down shirt with a pen poking out of the pocket, Shawn Hagerty seems too laidback to be a central figure in a philosophical dispute over a state's role in implementing federal policy. But he is.

The Southern Californian is the point man in a case pitting local governments against a state agency that's assumed the role of the EPA. Two decades after the agency began targeting the most difficult source of water pollution — storm runoff — his is one of two law firms representing public works managers who are forcing state regulators to confront the law's central dilemma: The program that's significantly reduced pollution from easily identifiable sources doesn't transfer well to diffuse, or “nonpoint,” sources. Nor is it as equitable.

Officially, Hagerty's clients want $9.1 million for expenses incurred in one year — 2007-08 — to meet the requirements of their National Pollutant Discharge Elimination System (NPDES) permit, which was renewed in 2007. Among other things, they are required under the latest permit to develop a regional urban runoff management program; created a hydromodification management plan to manage increases in runoff discharge rates from both existing and new developments, parking lots, and streets with more than 5,000 square feet of paved surface; updated best management practices (BMPs) such as bioretention cells and swales; sweep high-volume streets at least twice a month; and clean storm drains that have accumulated debris greater than 33% of design capacity “in a timely manner.”

Unofficially, Hagerty's clients want regulators to acknowledge that the permitting process doesn't advance their shared mandate to clean up stormwater to the “maximum extent practicable.”

The state argues that its role as federal enforcer doesn't extend to helping financially strapped stormwater programs afford remediation.

A state commission falls somewhere in between, agreeing to some extent with each party.

You wouldn't think this youthful attorney, who's worked on planning laws for a decade, is at the nexus of how Americans choose to fund the national effort to mitigate the consequences of treating the nation's lakes, rivers, and streams as limitless sponges. But he is.

By Dec. 31, 2012, all local governments must have a plan for keeping all pollution, regardless of source, from entering rivers and streams. By then, legislation to restore Clean Water Act protections to all waterways, not just those deemed “navigable,” may have been enacted (see sidebar on page 57).

But Hagerty doesn't seem to feel any pressure. He sits calmly in a conference room 15 stories above the city with office buildings, condo complexes, and San Diego Bay visible behind him through a massive window.

“People think it's a rainy year, but we're only at nine inches,” he says, glancing down at the city below. “There are some green roofs here in San Diego, but they have to be irrigated because of the lack of rain.”

That's the sort of misguided approach to stormwater control that his clients want to fix; and in March — almost two years after submitting their claim to a state commission that reviews complaints about unfunded mandates — they prevailed (see sidebar on page 60).

The state has said it will ask the commission to reconsider its decision.

Even if state regulators don't push the point, the legislature still must approve payment. Which means in the world's eighth-largest economy, where the state has stopped public works projects, furloughed state employees for two days a month, and closed Department of Motor Vehicle offices on selected Fridays, local stormwater agencies likely will continue picking up the tab.

“The struggles that California cities are having are those that all cities are having,” Hagerty says. “It's not sustainable to keep asking cities and counties to do all of the monitoring and funding.”

Setting a national precedent

The view of San Diego from the Pacific Ocean is deceiving. The valley and the coast frame the small, clean, squat skyline. But the heart of the city hasn't been spared from the economic downturn. Two years ago 300 condominium conversions were planned. Many have been suspended.

In February, during a ride through downtown, one cabbie criticized the overdevelopment. “See that building there?” he said, pointing to one. “It's empty. So is that one across the street.”

The view was similarly bleak, although for much different reasons, more than a century ago.

In 1774 missionaries dammed the San Diego River's outlet just south of what is now Mission Bay, launching a century of dam-building across the county to create freshwater lakes and control floodwaters. By 1900, 18,000 people were drinking stormwater runoff that had been captured and treated via this system.

In 1949 the Dickey Water Pollution Act created the State Water Pollution Control Board and its nine regional boards located in each of the major California watersheds. Twenty years later California's Porter-Cologne Water Quality Control Act promulgated concepts that served as the model for the Clean Water Act of 1972 — with two major exceptions. Although California regulates all discharges to surface water and ground-water, the federal law concerns itself only with surface water.

Today, California is one of the few states that require NPDES permit applicants to address pesticides and dissolved copper, which is released as fine particles from brake pads.

Nor are state regulators likely to pull back on requirements. The state's department of finance estimates that most of the 10-million people expected to make California their home over the next 20 years will settle in Southern California, a prediction that doesn't bode well for storm-water programs. As the region's population grew over the last three decades, so did the amount of metals in stormwater: from 6% in 1971 to 34% in 2000.

No more funding options

“The problem with stormwater is that it's so nonpoint source-based,” Hagerty says. “We need more global approaches to the problem, but right now there's no way to pass those costs on.”

In 1996 California voters approved Proposition 218, which requires that property-related fee increases be subject to voter approval. While a handful of cities in San Diego County have increased fees to subsidize stormwater-related operations, San Diego has not taken the issue to voters. Nor has it asked developers to fund retroactive measures.

After all, this is Southern California, where cities always face a challenge when asking the state's most conservative and libertarian voters to pay for the clean beaches and lifestyle they enjoy. Three of the five largest cities in Northern California implemented a charge or fee for stormwater control after Prop 218. Of the five largest cities in Southern California, only Los Angeles has. In 2004 voters approved Position O, which authorized a $500 million general obligation bond to fund stormwater management projects through an annual .01% property tax assessment per $100 of assessed value.

The City of San Diego Storm Water Department oversees 70,000 storm drains, 800 miles of drainage pipeline, 15 stormwater pump stations, and sweeps 2,700 miles of streets. New-project developers must install BMPs, but forcing developers to install them on completed projects as required by the city's 2007 permit is another matter. “We haven't charged fees for that, nor do I think it's appropriate,” says Drew Kleis, program manager in the department.

“California cities are in a really tough place,” says Geoff Brosseau, executive director of the nonprofit California Stormwater Quality Association, whose members include all NPDES Phase I and many Phase II government agencies. “On the one hand we're trying to do more on stormwater than is required at the federal level, but on the other hand Prop 218 makes it very difficult for cities and counties to raise funding. Stormwater is the biggest source of water pollution.”

San Diego is one of the only cities that relies almost entirely on general funds to finance stormwater management.

In 2009, expenses totaled $48 million, and deferred maintenance costs were estimated at $100 million. The stormwater department received $3.7 million in Section 319 grants, administered by EPA to reduce nonpoint sources of pollution. The rest of the program is funded by a monthly 95-cent fee added to residential water and sewer bills. The fee would have to be $5.49 to fully fund the $6.5 million operation. City managers realize it's time to recalculate the outdated fee, and the department is working on a cost-of-service study that is expected to be complete by the end of the year.

The county, too, has faced ever-rising costs, which jumped to $34.6 million this year from $26.9 million five years ago.

Although the commission's ruling could conceivably ease the short-term burden of Hagerty's clients, it doesn't address how they'll pay for measures they suggest when the permit renewal process begins in 2012.

Bill would expand federal jurisdiction of U.S. waters

A bipartisan bill in Congress seeks to restore Clean Water Act protections to all waters, extending federal jurisdiction beyond EPA's current ability to regulate only waters deemed navigable. America's Commitment to Clean Water Act (H.R. 5088), sponsored by Rep. James Oberstar (D-Minn.), would reverse U.S. Supreme Court decisions in 2001 and 2006 that left about 20% of the nation's 100 million acres of wetlands and lakes, intermittently flowing streams, and wetlands adjacent to those streams unprotected by the 1972 legislation.

“The Supreme Court has greatly limited the scope of the act and greatly confused the application of existing law,” says Oberstar, who in 1972 was a staff assistant to Minnesota Rep. John Blatnik, one of the Clean Water Act's chief authors.

What's at stake

Hagerty's clients believe that satisfying the Clean Water Act imperative to remove pollution to the “maximum extent practicable” requires a holistic solution in which all polluters participate.

“Stormwater is inherently difficult to measure because it's so vague,” agrees Jon Van Rhyn, San Diego County's water quality program manager. “But just because something's a mandate doesn't mean it's compensable.”

Designed to address unique local conditions in the nation's third-largest state by area, California's nine regional water quality boards are largely autonomous. But lacking a statewide policy based on empirical evidence of the effectiveness of BMPs in reducing nonpoint source pollution, the boards operate under different philosophies. Furthermore, they don't have enough data to determine which programs are most effective.

According to a report released last year by the Little Hoover Commission, a bipartisan independent oversight agency formed in 1962 that investigates California's government operations, the structure focuses too much on accountability and not enough on improving water quality.

“The water quality control board from Region 9 interprets its role as one of overseeing restoration,” adds Public Information Officer Bill Harris. “What you've got is a big fat question mark: Are we talking about restoring these wetlands to pre-European settlement?”

The regional board maintains that the 2007 permit's definition of “pre-project runoff” isn't meant to be interpreted as “before any human-induced land activities.”

Citing the ongoing litigation, Dave Gibson, executive officer of Region 9 of the California Regional Water Quality Control Board, and Catherine Hagan, senior staff counsel in the Office of Chief Counsel for the State Water Resources Control Board, declined to comment for this article. But in a May memo to regional water boards, Chief Counsel Michael A.M. Lauffer emphasizes that the proceedings are “not about validity of the permits; the proceedings are and have always been about funding.”

Not all unfunded mandates are reimbursable

In April, California's Commission on State Mandates agreed that San Diego-area stormwater operations should be compensated for some costs — street sweeping, cleaning conveyance systems, and assessing program effectiveness — stemming from their 2007 National Pollutant Discharge Elimination System (NPDES) permit. At press time, the 22 co-permittees were quantifying training, staffing, equipment, and contracts to submit a reimbursement plan to the state's department of finance.

The commission didn't entirely side with them, though, denying two claims regarding hydromodification and low-impact development requirements.

Because municipal projects are undertaken voluntarily (i.e., development occurs only as communities deem necessary), there's “no legal requirement to build municipal projects” post-development; thus, whatever government approved a hydromodification plan should bear related costs. Low-impact development costs should be passed on to developers. The co-permittees' response: When it comes to fees, at some point enough is enough.

This isn't the first time the commission has supported complaints from local governments. Last year, the commission found the regional board overstepped its authority by requiring another group of co-permittees in Los Angeles County to install and maintain trash receptacles at public transit stops. They can now recover those costs.

Establishing reasonable expectations

“It made sense to use a wastewater model in the 1990s because that's all we knew, but we realized in the last 20 years that model doesn't work for everything,” says the California Stormwater Quality Association's Brosseau.

“We didn't even have stormwater programs until 1990,” regional regulator Van Rhyn says of federal regulations. “Because it's such a new issue, we don't get coherent measurable programs. We just get a kitchen sink of various requirements. How do we make sure we're spending our money in the right way?” The issue of nonpoint source pollution certainly isn't unique to California.

The issue of nonpoint source pollution certainly isn't unique to California.

In May, EPA finally announced that it had reached a settlement with the Chesapeake Bay Foundation in a 2009 lawsuit by elected officials in Maryland, Virginia, and Washington, D.C., claiming that the federal agency had failed to take adequate measures to restore the bay after decades of neglect. The settlement agreement requires EPA to restore water quality in the Chesapeake Bay and its tributaries.

By Dec. 31, 2010, EPA will establish the Chesapeake Bay total maximum daily load for pollutants — which will be the largest ever developed in the nation for the 64,000-square-mile watershed.

It signals a shift in the way both state and federal agencies are tackling the issue of stormwater control and treatment. But that new mindset is still in its infancy.

Only as recently as 2008 did the National Research Council recommended that EPA develop metrics that would more accurately guide permittees, from establishing levels based on expected outfall pollutant concentrations from the National Stormwater Quality Database to developing site-based runoff and pollutant load limits.

Interestingly, the “maximum extent practicable” language is designed to empower local authorities by imposing a one-size-fits-all solution for an extremely complex challenge.

The National Association of Flood & Stormwater Management Agencies, which represents more than 60 state and local public agencies, supports the phrasing. In February, the association submitted a letter to EPA claiming it's “the only permit program standard that allows for the recognition of the immense array of variables ... which influence stormwater and its regulation.”

The 65,000-member American Rivers conservation group suggests EPA instead use the “maximum extent technically feasible” (METF) language of the Energy Independence and Security Act of 2007, which requires federal facilities to maintain pre-development hydrology for both new construction and redevelopment. Permittees must document “technical feasibility” using engineering calculations, geologic reports, hydrologic analyses, and site maps.

However, the tools that the law recommends — including green roofs, rain gardens, vegetated swales, pocket wetlands, porous and permeable pavements, and vegetated median strips — are the same tools EPA recommends for the “maximum extent practicable” standard.

EPA has been asking city, county, and state regulators and permittees to submit performance data on their stormwater management programs and is expected to propose a rule to control stormwater on newly developed and redeveloped sites by November 2012.

“It's still under discussion,” says Jonathan Angier, physical scientist in the Water Permits Division of the agency's Office of Water. “We may not do anything; we may revise it to the METF standard; or we may decide to drop it like a hot potato.”

In the meantime, the larger issue of unfunded stormwater mandates remains unresolved for Southern California.

“(The state board) won't stop getting stricter until they think the Water Quality Act objectives are met,” San Diego's Kleis says.