'Flush fee' grants on hold
State transferring septic system upgrade program to counties
By PAMELA WOOD, Staff Writer
The state has suspended its program of giving "flush fee" money to homeowners to help pay for expensive, upgraded septic systems.Pamela Wood — The Capital Jeffrey Strain and his family are packing up their Edgewater home, but they can’t yet remove the “for sale” sign. A contract to sell the house hangs in the balance as the Strains try to obtain a state “flush fee” grant to help pay for replacing a failing septic system with an upgraded nitrogen-reducing system.
Maryland is preparing to hand over the reins of the program to county governments when the new fiscal year begins on July 1.
In the meantime, the state has stopped issuing grants, leaving an untold number of homeowners in a lurch - they are required to install the expensive systems but have no help to pay for them.
Jeffrey Strain is in just such a pickle.
He's selling his family's home in Edgewater's Southdown Shores neighborhood and building a new home in Calvert County.
He found a buyer and signed a contract - only to find out during the home inspection that the septic system was failing.
Because the home is located a few blocks from Beards Creek, about 900 feet from the water, it falls in the state's Critical Area.
By law, all failing septic systems in the Critical Area must be replaced with more expensive systems that cut harmful nitrogen pollution in half.
State lawmakers passed the Critical Area requirement in 2009 only after being convinced that there was enough money to help homeowners such as Strain.
Strain and his real estate agent, Don Shankle of Coldwell Banker, immediately began the process of applying for a grant to pay for the $13,000 cost of the upgraded septic system. About two weeks later, they were told by the state that there were no grants available after all.
"We were misled," Shankle said.
Now Strain and Shankle are struggling to find a solution that will allow the sale to close at the end of the month.
They're hoping to get special approval to replace the part of the system that actually has failed - the drain field, which the flush fee grant doesn't cover - and allow the new homeowner to replace the nitrogen-reducing tank with the help of a grant after July 1. But they're not sure if the buyer will go along with that.
"This is really hurting us," Strain said. "We are really, really stuck."
Dawn Stoltzfus, a spokesman for the Maryland Department of the Environment, said the septic grant program has become increasingly popular.
Priority for the grants is given to homes in the Critical Area with failing systems. But homeowners with working systems or who are outside of the Critical Area can apply for grants, too.
"It took awhile to get the program up and running," she said. But now, she said, "It is an extremely popular and in-demand program."
The state had about $10 million to give out in fiscal 2010, the budget year that runs through June 30.
About $3 million was from new revenues from the "flush fee," and $7 million was left over from past years.
The flush fee, officially called the Bay Restoration Fund, was approved by state lawmakers during former governor Robert L. Ehrlich's administration and is a $30 fee paid annually by all property owners. The money is split among septic system upgrades, sewage plant upgrades and winter cover crops for farmers - all ways to reduce nitrogen pollution that causes algae blooms and harms the Chesapeake Bay.
Stoltzfus said the state hasn't run out of money this year for septic upgrades. She also said that "we plan to spend all of it" and "we're pretty much committed already to what we have."
But she said the Maryland Department of the Environment is working on transferring the money and grant administration over to the counties. During that transition period, "people might experience a slight delay."
Generally, homeowners such as Strain seeking grants are being told to wait until July 1 and apply directly to their county at that time.
Kerry Topovski, Anne Arundel County's director of environmental health, said she understood that the state ran out of money.
"MDE was administering the grant program for fiscal year 2010. At this point, they have exhausted all of their available funding for fiscal year 2010. We've been notified that MDE will be transitioning the grant program to local health departments effective July 1," Topovski said.
Anne Arundel is hoping to get $2.3 million for fiscal 2011, enough to install 175 upgraded septic systems, including at least 120 of them in the Critical Area, Topovski said.
Topovski seemed eager for Anne Arundel to regain responsibility for issuing the grants. Before 2010, Anne Arundel handled the program on its own, though not all counties did.
With limited funding in 2010 - a one-time budget move by lawmakers transferred extra money over to cover crops - MDE kept control of the cash for the year.
Until the counties take over and cash is freed up on July 1, Stoltzfus from MDE said it's possible to do case-by-case reviews in situations like Strain's. She didn't comment specifically on his case.
"If there is a circumstance where you are in a Critical Area and you have a failing septic system where there is a health and safety issue, let us know right away," Stoltzfus said.
Real estate agents who sell waterfront and water-oriented homes keep a close eye on the septic system grant programs.
Bill Castelli, president of the Maryland Association of Realtors, said he knew money was dwindling in the septic account. The state had stopped giving grants to non-Critical Area homeowners earlier this year.
But he said real estate agents hadn't been notified that all grants were suspended.
Meanwhile, Shankle, the real estate agent, is burning up the phone lines to the county and the state to find a solution for Strain.
"We need to have a solution real quick," he said. "He's depending on me to solve the problem."
(Revised May 2010)