Pels Law Firm Helps Property Owners to Counter Montgomery County “Rain Tax”

Firm attorneys Jon D. Pels and Maria Leonard Olsen have been representing the Lindbergh Park Owner’s Association (LPOA) in their fight against Montgomery County and its “rain tax” policies. On April 20th, 2017, the Montgomery County Circuit Court reversed an earlier decision in a major victory for the LPOA.

Montgomery County’s “rain tax” has had problems since its inception. In fact, the first successful challenge to the County’s rain tax was in the case Chod v. Board of Appeals for Montgomery County, No. 398704-V (Cir. Ct. Mont. County 2015). Because of the decision in that case, the county had to pass emergency legislation to modify the rain tax. The county collects funds to help the environment via its Water Quality Protection Charge, but allows credits to property owners who help the county out with the stormwater management task. However, the county attempts to narrowly define which property owners qualify for these tax credits. For many, it is not worth the hassle.

Most members of the LPOA were denied application for credits, despite the fact that the Lindbergh Park development contains an expensive stormwater management system, consisting of three drainage ponds that sit on three LPOA owners’ properties, and grading and stormwater drains on all of the properties. The entire Lindbergh Park development manages all of its own stormwater runoff, at no cost to the county. Expensive stormwater retention ponds and infrastructure to channel stormwater runoff to the ponds were constructed by the developer, and assigned to the LPOA. The LPOA members paid for the stormwater management facilities when they purchased their properties. The LPOA members continue to pay for upkeep and maintenance of these stormwater management ponds.

Led by LPOA president, Devin Battley, the property owners took on the county, first by unsuccessfully appealing to the Board of Appeals the County Department of Environmental Protection’s denial of their credits and then, with the help of The Pels Law Firm, to the Montgomery County Circuit Court. Attorneys Jon D. Pels and Maria Leonard Olsen were able to show Judge Ronald Rubin the error of the county’s position in denying credits to the LPOA property owners who treat their own stormwater, just because the stormwater drainage ponds were not physically on their property. Judge Rubin posed questions to the county attorney evidencing disdain for the county’s position: “So if a property owner dug big holes on their property that diverted stormwater away from the ponds, that wouldn’t be a problem here?”

On April 20, 2017, the Montgomery County Circuit Court reversed the Board of Appeals decision and remanded the case for a full hearing consistent with the Court’s findings regarding the interpretation of the County Code. The Court found that the Board of Appeals made an erroneous conclusion of law by conflating the statutory meaning of “stormwater management system” found in Montgomery County Code section 19-35(e)(1) to equate with only the stormwater management ponds on the properties at issue in this case. The relevant code section mandates credits for property owners who have “stormwater management systems” and not the narrower “stormwater management facilities,” which the council could have so codified had that been their intent.

The Pels Law Firm is handling several rain tax cases on behalf of property owners. Stay tuned for more in the case of the Appeal of Devin Battley et al., Case No. A-6498.