MSD staff outline pilot to target 500 large sites with permit-and-surcharge for excess stormwater

Metropolitan Sewer District (MSD) staff on April 7 proposed a targeted pilot to reduce excess wet-weather flow by focusing on roughly 500 large nonresidential properties in the combined-sewer area and using a two-step approach: a general stormwater permit and, after planning and mitigation opportunities, a possible surcharge for excess flow.

In a presentation to the board, MSD presenter Diana said the program aims to improve rate equity and incentivize on-site stormwater management by concentrating on the largest contributors rather than imposing a new charge districtwide. "The proposal we're discussing today focuses on reducing excess wet weather flow, particularly from the largest contributors, to help manage system performance and costs over time," she said.

Staff said the pilot would target nonresidential properties with more than 2 acres of impervious surface — about 500 sites that together account for roughly 2,300 impervious acres in the combined area. By comparison, MSD cited about 99,239 residential properties discharging to the combined system totaling about 4,000 impervious acres. MSD staff said that concentration makes targeted action potentially more effective.

How it would work: MSD would first require affected properties to enroll under a new general pretreatment/stormwater management permit. The permit would require preparation of a stormwater management plan, site delineation of impervious areas tributary to the combined system, documentation of existing best management practices (BMPs), limited reporting and periodic inspections. Staff estimated a permit administrative fee could range "somewhere in the range of $2.50 to $500," intended to cover administrative costs.

After planning and mitigation opportunities are considered, MSD would identify any "excess" wet-weather flow — stormwater discharge above a baseline comparable to typical residential wet-weather flow — and could assess a surcharge on that excess. Staff gave a simple example: if a nonresidential site meters 10 CCF of water use but discharges an estimated 20 CCF of stormwater in a typical event, the 10 CCF difference would be treated as excess and could be surcharged. MSD staff said a cost-of-service study will set the final surcharge rate; an early estimate put the range at about $3 to $6 per CCF.

Staff proposed a phased five-year rollout by tiers (largest sites first). Permitting and planning would occupy years one and two for each tier, with surcharges beginning in year three and a stepwise ramp thereafter. MSD told the board it expects to need 3–4 full-time staff dedicated to the program (one immediate hire and additional positions phased as the program grows), with full personnel costs estimated at about $500,000 when fully built out; staff said initial costs could be absorbed in MSD's 2026 budget and the 2027 budget would include the additional positions.

Staff presented case studies showing how the approach could play out: a large rail yard with multiple outfalls appeared not to owe a surcharge based on existing monitoring and pretreatment; a permitted manufacturing facility with an effluent meter likewise appeared already accounted for in existing charges; and a 3.5-acre warehouse example illustrated a potential excess-flow surcharge of roughly $1,300–$2,600 per month at the preliminary $3–$6/CCF estimate if the owner did nothing to mitigate flows.

Commissioners pressed staff on equity and timing. Commissioner Summer Dumas said she wanted to ensure residents would not see higher costs and asked whether the five-year cycle could be shortened so property owners are engaged sooner. Vice President Reese raised concerns that large companies have more leverage to negotiate with MSD than homeowners and asked whether churches and other nonprofits would be exempt. "I don't want anything that's going to pile on the churches," Reese said, urging protections for seniors and low-income residents.

Diana replied that staff had not proposed categorical exemptions for churches or nonprofits and that the 500-site list reflects a threshold (nonresidential properties with over 2 acres of impervious area); she said alternatives and condensed phasing could be considered based on board feedback. Neil, an MSD staffer, said his initial review showed a mixed group among the top 500 (rail yards, manufacturers, warehouses, schools and some government parcels), and that churches did not appear prominent in his preliminary tally though ownership flags can obscure some parcel uses.

On how any surcharge revenue might be used, staff said no decision has been made: MSD will consider whether surcharge revenue could reduce residential rates, be returned via rate relief, or be directed to a targeted mitigation fund once a full cost-of-service study quantifies potential revenue and impacts.

The board heard the presentation and questions and then moved to the next agenda item. The board voted to enter an executive session under ORC section 121.22(g)(2) to discuss acquisition of property.

Next steps MSD outlined: draft a general permit, complete a cost-of-service study to set surcharge methodology and amounts, prepare rule and regulation updates and hold public hearings before any rule amendments or surcharge adoption. Staff said they expect implementation activity to begin in earnest in 2027 with public outreach to affected property owners beforehand.