Colburn Hopes to Solve Eastern Shore Septic Contractor Pay Issue

As septic system vendors and installers attempt to track down millions of dollars owed to them in state grants, Senator Richard Colburn, R-37-Mid-Shore, has pre-filed a bill he hopes will correct the problem moving forward. The Maryland Department of the Environment provides selected homeowners with funding to install denitrification units to older septic systems, an upgrade that costs about $10,000. In many instances, however, the vendors and installers do not end up getting paid, except for Talbot County where the money goes directly to the businesses rather than to the homeowner.

According to J.O.K. Walsh, executive director of the Caroline County Economic Development Corporation, the money does not make it to the businesses for various reasons: the Maryland Comptroller’s Office withholds payments to homeowners who owe the state money; banks seize a part or all of the payments to compensate for overdrawn accounts; homeowners simply take the money and run; or, homeowners demand additional work. Towers Concrete Products of Denton is now owed $1.2-million in payments for completed septic system work, according to Walsh.

To prevent businesses from abandoning MDE’s Onsite Sewer Disposal System program, Colburn has pre-filed a bill that would require the government to disburse the grant funds directly to the contractors. Legislation is not actually needed for the change, Colburn said, but MDE has failed to make the change on its own accord. Colburn said he had three concerns with the program: that small businesses are not getting paid; that people are not using the money intended for replacing septic systems to actually replace septic systems; and, that taxes collected for the Bay are not supposed to go to the comptroller to settle someone’s debt to the state.

Delegate Jeannie Haddaway-Riccio, R-37B-Talbot, will cross-file the bill in the House of Delegates, Colburn said. Walsh sent a letter to MDE Deputy Secretary Robert Summers requesting that MDE change its policy on its own. Since MDE tells the vendors what to do, the problem cannot be ignored by the department, Walsh wrote. Talbot County, meanwhile, has managed to avoid the problems experienced in other counties because of the way the program is administered in Talbot, according to Ray Clarke, director of the Talbot Department of Public Works.

Talbot County was one of the first counties to apply for the program and has upgraded 111 septic systems, Clarke said. Talbot’s Public Works Department paid contractors directly rather than ever sending the money to homeowners. John Wolfe, chairman of the Talbot County Public Works Advisory Board, said the advisory board is very pleased with the way the public works department has handled the program. Talbot County has provided funding to people who applied to participate in the program. Starting in January, the grants will be available only for failing septic systems inside the critical areas (within 1,000 feet of tidal waters). Additionally, the grants will be awarded on a sliding scale based on income. In July, other homeowners may be eligible for the program if there is money left.

Talbot County has 4,600 septic systems in the critical areas. Due to the Chesapeake Bay Nitrogen Reduction Act of 2009, any new or repaired septic system in the critical area must have nitrogen removal technology. For the system to qualify as failing, Clarke said, there must be raw sewage backing up into house or sewage on the ground. This criteria basically will shut down the program, Clarke said, but most of the Bay Restoration Funds are now going to cover crops and MDE is running out of money for the program. Additionally, homeowners have to assume the cost themselves for updating their drain fields, which can cost thousands.

The payment system still needs to be resolved, Walsh wrote in his letter to MDE, or there will be a full-fledged crisis when the economy recovers and the state cannot find vendors willing to participate in the program. Talbot County has a backlog of 120 to 140 property owners who have applied for the program and await approval, Clarke said.