BERLIN – The Berlin Mayor and Council voted unanimously Monday night to approve wastewater regulations that have been under development for two years.
The regulations retained the 10 percent deposit per EDU on application for allocation and did not include a sunset or ‘use it or lose it’ provision. The regulations on allocation and payment apply to requests made after 2008 only.
The 10-percent deposit did not come up for discussion at Monday’s meeting, although the council discussed the topic in some detail at a previous meeting.
Last Friday Mayor Gee Williams presented the town council with a provision adding a sunset clause, suggested two weeks ago by citizen and professional planner Sandy Coyman, for consideration. Williams said that the town council needed to talk about the sunset idea.
Concerns had been raised by Coyman two weeks ago that an EDU holder could sit on the capacity, denying it to other people but never using it.
“Berlin had a certain number of EDUs [in the past] and it was come and get ‘em,” said Williams. “People hoarded them.”
The sunset clause discussed Monday would have allowed the town of Berlin to recapture allocated EDUs if they had not been hooked up after 10 years. A developer would have had rights to assigned EDUs for five years, and then would have to apply for year-long extensions each of the next five, while paying another 5 percent deposit each year to maintain access to those units of sewer service.
The sunset clause would have been taken off the table once the builder pulled a building permit and paid the full EDU fee of $11,600 per unit of capacity.
“After that 10-year period ,if the EDU has not been used, the town would have the ability to recapture the EDUs,” Williams explained Monday. “It adds another layer of regulation to the EDU process.”
Councilman Dean Burrell wondered whether a developer could reapply for that capacity once it was recaptured.
“It’s not addressed here but it could be,” Williams said. “That’s one of the considerations you’d have to determine. There’s no law that says that cannot be done.”
Councilwoman Lisa Hall expressed concern that the sunset clause would burden builders.
“Basically they lose. They lose all their money, their allocation, everything,” Hall said.
“I think it’s a huge deterrent to developers that isn’t even there now,” said Councilwoman Paula Lynch.
Land use attorney Mark Cropper, who represents several developers, agreed. The sunset clause would deter banks from financing projects in Berlin, he said. The value of a property is directly related to availability of sewer capacity.
“I would have to have an absolute guarantee that sewer would be there,” said Cropper.
A developer could borrow millions of dollars to construct a subdivision, but if, after building the infrastructure and doing preliminary work, those houses do not sell well, the developer could lose any chance of recouping his money if the town recaptured unused EDUs after ten years.
“You’ve absolutely destroyed my investment,” said Cropper. “There’s not a lender in the world who will loan money if that’s even a possibility. Nobody will go into it under these circumstances.”
As an ex-loan officer, local real estate agent Cam Bunting weighed in from the audience on the lending situation under a sunset clause. “I don’t think you can put a clause on there that‘s going to limit the time,” she said.
Cropper said that over the next five to 10 years land development would be slow anyway. With this provision, the situation would be worse.
“What little investment you can readily anticipate just won’t happen,” said Cropper.
“It’s not just going to hurt the developer. It’s going to hurt the people that own lots,” said Bunting.
“You’re taking away the value of land,” said Mary Velong from the audience.
Berlin-based attorney Joe Moore, who also sits on the town’s Board of Zoning Appeals, urged the council to eliminate the sunset clause. “Use it or lose it” clauses are unconstitutional, under Maryland case law, according to Moore
“I think that a sunset provision now is so chilling, it really sets the wrong image for what we’re trying to do,” Moore said.
The town could amend the payment schedule to affect hoarders more stringently, Moore said, instead of enacting a sunset clause. “If they realize they have to pay more money to hoard those EDUs, they’re going to make a different decision,” he said.
Lynch suggested seeking some middle ground between no recapture and stringent recapture.
“We’re up against a time constraint here. We’ve drug this out for two years,” said Lynch. “There’s got to be something in between.”
“If you don’t have it in there and you give the EDUs, you have nothing. You have nothing to fall back on,” said citizen Marge Coyman. “We’re paying for this while you’re holding onto those EDUs.”
While the town needs to provide sewer capacity for development, the existing ratepayers should not subsidize that process, said n Sandy Coyman. The town must find a balance that will protect current ratepayers from taking on the majority of the cost of the $20 million sewer plant expansion.
The two options to achieve that financial balance, according to Coyman, were to go ahead with the sunset clause or charge full capital carrying costs on each assigned EDU.
“If you’re not comfortable putting a time limit on things, at some point you have to pay the full weight. It’s not fair for existing ratepayers to shoulder it,” Coyman said.
The town will make sure no one group is subsidizing anyone else, Williams said.
The town might realize that the ready-to-serve fee might not be enough, Lynch said. That fee can be amended in future, said town attorney Dave Gaskill.
If fewer EDUs are requested and allocated than expected, the town could go so far as to double the ready-to-serve fee, which is currently half the minimum bill, said Williams.
“It kind of puts the existing ratepayers behind the eight ball,” Sandy Coyman said. “I just like the Mayor and Council having some way of reviewing this.”
“I think it’s something that can be looked at in the future especially at budget time,” said Councilman Troy Purnell.
A minor controversy over Purnell’s participation in discussions over EDU payments and allocation was resolved by town attorney Dave Gaskill’s further explanation Monday night.
Marge Coyman, who felt that he should excuse himself over a potential conflict of interest, questioned Purnell’s participation in discussions. Gaskill, who told Purnell earlier in the process he was permitted to participate, explained Monday night that a state code allowed Purnell’s participation because the new wastewater regulations and fees apply to an entire class of businesses, not just Purnell.