The federal government has told the District of Columbia water and sewer authority and the city's environment department that it will not pay new fees assessed on all residents-a move that could shift the burden of paying for federally required upgrades to the sewage system to city residents who can least afford it.
In April, the Government Accountability Office declared the fee assessed on impervious surfaces a tax and that the federal government is tax-exempt.
In an April 13 letter to the DC Water and Sewer Authority, obtained by the Washington Examiner, an attorney for the GAO wrote: "[Based] upon our preliminary review, the [stormwater] charges adopted by the District appear to be a tax on property owners. Accordingly, we are instructing the Department of Treasury not to make a payment to the District from GAO's appropriations." On April 15, the paper reported, the Navy also wrote to WASA, calling the fees "an impermissible tax of the federal government." WASA received similar notification from the General Services Administration.
The impervious surface fees are part of a $2.6 billion effort to upgrade Washington's combined sewage system, which overflows during heavy rains and sends runoff into the Potomac River, the Chesapeake Bay's second-largest tributary. They are not new fees, said WASA's director, George Hawkins, and have long been part of the bill for both agencies.
WASA, known now as DC Water, regulates the combined sewage system, while the DC Department of the Environment oversees the storm drains. Hawkins, who previously ran the DC Department of the Environment, said the agencies simply chose to break out the fee so that ratepayers knew why their bills were increasing.
That attempt at transparency might hurt the agencies deeply. The federal government occupies 20 percent of the land in DC's sewage-treatment area. Its failure to pay the fee could result in a shortfall of millions of dollars and compromise its efforts to clean up the Bay and the Potomac.
"It just seems fundamentally unfair, and it's just wrong," Hawkins said. "It's quite striking that, as the federal government is asking all of us to step up and do more, that at least part of them have ducked."
The decision not to pay the fee comes at a time when President Barack Obama issued an Executive Order promising that the federal government would take the lead in the Chesapeake Bay cleanup, and urging all citizens to do their part. Even more ironic, said Hawkins, is that the federal government has mandated these upgrades for the DC sewage system.
Both agencies are negotiating with the federal government. But if the feds prevail, Hawkins fears that the agencies will then have to recoup their costs from residents of the District of Columbia, one of the nation's poorest cities.
U.S. Sen. Benjamin Cardin is hoping it won't come to that. In June, he introduced a bill that would require the federal government to comply with what he called "local stormwater fees" that address runoff and other pollution.
"I continue to have grave concerns about the failure of the federal government to pay localities for reasonable costs associated with the control and abatement of pollution that is originating on its properties. At stake is a fundamental issue of equity: polluters should be financially responsible for the pollution that they cause. That must include the federal government," Cardin said in a statement on his website.
The WASA-DCOE situation is not the first time the federal government has raised the issue of whether these rates are fees or taxes, nor the first time it has refused to pay them. In 1998, federal agencies balked at paying a stormwater charge. But the Clinton administration insisted they pay it.
In 2004, Maryland Gov. Robert Ehrlich Jr. signed the so-called "flush tax" law. It tacked on a $2.50 fee to each water bill to raise $65 million, which paid for upgrading the state's largest sewage-treatment plants. Just a few months after the law was passed, the Maryland Department of the Environment got word from the U.S. Navy that it considered the user fee a tax, and therefore wouldn't pay it. The implications were huge: Several large military facilities and several hundred federal offices are in the state. The Navy eventually settled, agreeing to pay a lump sum fee and to upgrade its own treatment plants. The rest of the federal agencies didn't challenge the fee.