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State Supreme Court Strikes Down MSD Storm Water Fee

Andrew Wamboldt/KOMU News - via Flickr

Updated at 4:30 p.m. with comments from MSD..

The Missouri Supreme Court has ruled that the Metropolitan St. Louis Sewer District needed voter approval when it changed the way it funded storm water service.

In 2007, the agency replaced a flat tax that could be enhanced with additional taxes in certain areas of the city with what it called an "impervious fee" that was based on the amount of water a property could absorb. An MSD customer, William Zweig, sued in 2008, saying the agency had violated a portion of the Hancock Amendment that forbids the passage of new taxes without a vote of the people.

In its ruling today, the Supreme Court upheld earlier rulings that the user fee was actually a tax. From the en banc ruling, written by Judge Paul C. Wilson:

"However, a tax by any other name remains a tax. It cannot be transformed into a user fee by adept packaging, any more than a zoologist can transform a horse into a zebra with a bucket of paint. Here, no  matter how many stripes MSD paints on it, the stormwater user charge is not a user fee."

Judge Laura DenvirStith concurred in the result, but did not issue a separate opinion offering different reasons. Judge George Draper did not participate in the ruling.

The individual taxing districts have been unable to provide adequate stormwater service for decades, said MSD spokesman Lance LeComb. 

"There are many customers out there who are impacted quite severely by storm water problems, who don't have storm water sewers, who have erosion problems," LeComb said.  "At the end of the day, we made a commitment that we need to find a  solution to storm water funding. we though we had found that through the impervious fee. The courts said no, so we're going to have to go back to the drawing board. We're going to continue to stay after this."  But it's a process that could take two years or more.**

Funding is also getting low for the agency's required regulatory functions, LeComb said.

"Keep in mind that not only do you have inflationary costs year over year that increase our costs to fulfill those regulatory requirements, but there's ever-increasing stringency around those requirements, he said."

The court also ruled today that MSD has to pay about $4.7 million in attorney and other fees, but will not have to refund the nearly $90 million it collected from the impervious fee before it was ruled unconstitutional.

Follow Rachel Lippmann on Twitter:@rlippmann

Rachel is the justice correspondent at St. Louis Public Radio.