Having repealed Harford County's version of the much-maligned stormwater remediation fee, County Executive Barry Glassman has a new strategy for meeting federal stormwater treatment requirements.
Glassman plans to move part of the revenue from the county's existing recordation tax toward stormwater-related capital projects, Director of Administration Billy Boniface explained.
The proposal was presented to the County Council as a resolution Tuesday night.
"The county executive went down to meet with the new attorney general and told him what we were trying to do," Boniface said after the meeting. "[Attorney General Brian Frosh] liked what we were doing."
Boniface noted the move would not mean raising any tax rates and would not need to be passed as a bill, and the move should keep the county free from any state or federal actions for not having a viable stormwater remediation program.
"It's a good alternative," he said.
Harford County's recordation tax is collected on real estate sales and other property transactions, such as mortgage refinances. The rate is $3.30 for each $500 of consideration (or $6.60 per $1,000, as is often quoted during settlements).
The amount of tax actually collected is highly dependent on home construction and commercial building activity, which as been down in recent years, as well as refinancing and home equity borrowing.
While the recordation tax is a state enabled tax, the tax rates are typically set be each county, Boniface told the council.
State law, however, requires that $2.20 of the Harford tax to go toward school capital improvements and 55 cents toward Program Open Space – parkland acquisition and development, Boniface said, a requirement specific to Harford County.
The remaining 55 cents of the Harford rate was set by a 1982 County Council resolution to fix "a severe funding problem in the water and sewer system debt service," according to the resolution introduced Tuesday, which will reallocate that portion of the tax to stormwater-related projects.
"This is not adding to the tax that would be collected," County attorney Melissa Lambert noted. "It is the same money that has always been collected."
Council President Dick Slutzky clarified that the administration would use the revenue to leverage bond money to pay for the stormwater projects.
The council plans to vote on the resolution March 3, Slutzky said.
The revenue produced would be about $1.8 million annually, based on the amount received in recent years, county government spokesperson Cindy Mumby said Wednesday.
That portion of the tax once generated as much as $4 million annually, before housing construction slowed down, she said.
The county would leverage that revenue by selling bonds and expects to receive $6 million annually from such borrowing, she said.
Mumby said the funds would be used for stream restoration and repair or maintenance of dams or stormwater control structures. Previous watershed projects have included work on Plumtree Run and Sams Branch, she said.
Mumby noted the 1982 increase in the tax rate was originally meant as a temporary measure to help the county catch up with the capital needs of its water and sewer system and to meet related debt service obligations.
The debt service problem no longer exists, according to the resolution. The initial needs of the water and sewer system were largely met by 1999, Mumby said, but the revenue continued to be collected and put toward newer water and sewer capital projects.
Those projects also are funded by the user benefit assessments and hook-up fees, not just the recordation tax, she said.
Other post-employment benefits
Also Tuesday night, the council agreed to move $8.3 million toward paying post-employment benefits, mostly for health insurance, to future retirees.
The council unanimously passed the bill. County leaders hope such allocations will start dwindling, as the OPEB, or other post-employment benefits, only apply to employees who started working after July 1, 2010.
"There are not a lot of local or state governments that fund their OPEB the way Harford County does," Councilman Mike Perrone said. "I think it is commendable that we are doing something a lot of jurisdictions throughout this country are not doing."