The hidden costs of implementing state regulations to reduce pollution to the Chesapeake Bay and curb growth could substantially increase the price of land and homes in the next few years, and add millions in costs to local governments and developers, according to Frederick County officials and state documents.
“The increases are not about what the state defined, but what is not defined. And no one would define it or answer questions,” said Frederick County Commissioners’ President Blaine R. Young (R). “The devil’s in the details, and that’s what everyone is worried about.”
The Frederick County Board of Commissioners was to hear an update today from Shannon Moore, county manager of sustainability and environmental resources, on the costs of implementing state-mandated strategies designed to cut the amount of nutrients that end up in the bay, restrict the use of septic systems and offset pollution from future growth.
Nutrients such as nitrogen and phosphorus overload the bay and create algae that blocks the sun, damaging marine life such as crabs and fish.
The state plan is part of a larger effort initiated by the U.S. Environmental Protection Agency to clean up the bay during the next 13 years as required by the federal Clean Water Act.
Related upgrades to stormwater systems that divert rainwater that ultimately produces runoff to the bay would cost the county $1.5 billion over the next 13 years, according to calculations by county officials. The state predicted the cost at $200 million.
The Maryland General Assembly also passed a bill this year that requires counties to curtail growth outside of more densely populated areas that are not served by public sewer.
The fiscal impact of the law cannot be determined, but it could drive up the value of land outside of more populated areas and create permitting delays, according to the state’s Department of Legislative Services. The result could have a “detrimental impact on affordable housing,” according to the fiscal note on the bill, which goes into effect on Oct. 1.
A regulation imposed by Gov. Martin O’Malley after the bill was passed mandated that all new construction in areas not served by public sewer use septic systems that are designed to reduce the amount of nitrogen produced. Additions to existing homes may also require a septic-system upgrade.
“Now you get a $10,000 to $12,000 upgrade just for an addition on your house,” said Sen. David R. Brinkley (R-Dist. 4) of New Market, who voted against the bill.
“The governor has the opportunity to change some of the more egregious parts of the policy if counties come back and say this isn’t doable,” Brinkley said.
But the cost for the septic systems that reduce pollutants is less than hooking up to a sewer system, according to the Maryland Department of the Environment.
“A hookup to a sewage system typically ranges from $15,000 to $35,000, depending on the connection fees of the jurisdiction. This means that, currently, new households on septic systems are not only discharging more pollution to Maryland waters, they are doing it at far less cost,” MDE spokesman Jay Apperson said.
All new development requiring a construction general permit for stormwater is required to offset pollutants from future growth after Dec. 31, 2014, by either trading or purchasing credits through the state's Agricultural Nutrient Trading program or other future credit market.
The MDE created the program to provide trades between wastewater treatment plants and farmers for nitrogen and phosphorus pollution reduction. MDE plans to expand the program to trade new development offset credits for nitrogen, Moore said.
Nutrient trading is the buying and selling of pollution reduction credits, allowing one source to maintain its regulatory obligations by using pollution reductions created by another source, according to MDE’s website.
Frederick County’s wastewater treatment plants don’t need the reductions, but farms with verified credits to trade are available to anyone who applies for a general construction permit for stormwater beginning January 2015, Moore said.
The program would use the market to cut the cost of pollution reduction, which may not be useful to Frederick County if cost-effective credits cannot be provided or if the trading geographies are too limited, she said.
The offset program is above and beyond the reductions imposed by what the county is requested to put into place as part of the effort to clean up the bay. The cost will be borne by developers.
Developers may have the option to pay a fee in lieu of producing offsets, a cost that Moore said has the potential to "get scary."
For every pound of nitrogen to be offset, the cost could be about $17,000 per credit using estimates provided by Elmer Wibley of the Washington County Soil Conservation District at a recent meeting. The average home on a septic system generates between 17 and 25 pounds of nitrogen per year, according to MDE's fact sheets for the offset regulation.