Baltimore County Administrative Officer (CAO) Stacey Rodgers stated in a letter dated September 21, 2021 that she was invoking her authority under county law to approve continuation of the waiver of county permit fees for construction of the Metro Centre at Owings Mills.
According to an investigation by County Inspector General Kelly Madigan, the fee waiver was instituted in 2011 by a former director of the Departments of Permits, Approvals and Inspections (PAI), Arnold Jablon.
It appears beyond dispute that Jablon, as director of PAI, acted without authority.
In my opinion, Rodgers has no more legal authority than Jablon did to categorically waive permit fees for the $220 million project – and the waiver remains unlawful.
The IG’s report indicates that the administration of County Executive Johnny Olszewski, Jr. learned about the waiver no later than October 2019.
A member of the administration not identified in the report instructed the PAI director at the time, Michael Mallinoff, to honor the waiver despite his protests that it was unlawful.
By the time Rodgers wrote her letter in 2021, the IG was investigating the waiver. That put Rodgers in a difficult position.
If she refused to legitimize the waiver, it would be a tacit admission that the Olszewski administration should have repudiated the waiver two years earlier and resumed collecting the permit fees.
The political damage to the Olszewski administration from such an admission would have been significant. Rodgers decided to continue the waiver.
A member of the administration instructed the permits director at the time to honor the waiver, despite his protests that it was unlawful.
Her continuation of the waiver instituted by Jablon implies that the waiver was lawful in substance, just not lawfully approved.
She described the unlawful fee waiver by Jablon as an “agreement” that the Olszewski administration “inherited” from the administration of former county executive Kevin Kamenetz.
She said “it was appropriate for the agreement to remain in place,” as if ratifying the waiver was a mere formality. She further noted that the Olszewski administration had a practice of honoring agreements made by previous administrations, including agreements that it did not like.
A Strain on Credulity
I don’t believe that the waiver was lawful in substance or that it was appropriate for the Olszewski administration to allow it to remain in place.
And to characterize the decision to continue the waiver as a matter of routine administration practice strains credulity.
The fee waiver by Jablon was an ultra vires (beyond his authority) act. It was not an “agreement” that the Olszewski administration inherited from its predecessor.
Nor was the unilateral action taken by Jablon a contract, at least not one binding on the county. The IG unearthed emails strongly suggesting that Jablon acted in pursuit of his own personal interests.
This one included in the report is particularly suspicious. In the same email where Jablon is told he’s getting a free parking garage space at a building that Metro Centre developer Howard Brown owns, he’s told by a Brown staffer, “Howard said he’d like to meet with you for 15 or 20 minutes.”
Whether Jablon’s superiors knew that he was routinely waiving Brown’s project from standard county fees remains unclear at this point.
Former CAO Fred Homan denied to the IG that he knew about the waiver, and there apparently is no evidence that Kamenetz was aware of it, either.
Based on the available information, Jablon’s action waiving the fees was nothing more than the rogue conduct of a former employee and should have been treated as such.
Avoiding Public Scrutiny?
It didn’t have to be this way.
As it happens, there is an agreement “inherited” from a prior administration: the 81-page Master Development Agreement governing construction of the project that was signed in 2005 by the county, the Maryland Transit Administration, and the developer, David S. Brown Enterprises.
The master agreement does not provide for fee waivers, meaning that fees were to be imposed and collected as provided by law.
This agreement could have been amended to provide for fee waivers, but wasn’t. We do not know whether the Kamenetz administration considered adding such an amendment. If it did not, it is easy to understand why.
Adding the fee waiver to the master agreement would have exposed the waiver to public scrutiny, and the considerable additional county subsidy for the project represented by the waiver would have been a very tough sell.
The Olszewski administration should abide by actual lawful agreements, not imaginary or unlawful ones.
Usurping Council Powers
Section 35-2-302(a) of the County Code delegates to the CAO the authority to “establish a schedule of fees for the issuance of permits for the erection, construction, repair, alteration, remodeling, removal, or demolition of a building or structure” and to “increase and decrease the fees when considered necessary and proper.”
There is no mention of fee waivers or exemptions in the ordinance.
The permit fees are intended to cover the estimated costs to the county of issuing and ensuring compliance with building and related (plumbing, electrical, etc.) permits. The fees addressed in this ordinance enacted by the County Council are known at law as “regulatory fees” to distinguish them from taxes.
Nothing in the ordinance even remotely suggests the CAO can issue blanket fee waivers or exemptions for certain projects
The authority to establish the amount of a tax cannot be delegated to an administrative official, but the authority to establish the amount of a regulatory fee can. This is because subjective judgment is not involved.
The amount of the fee must be based on an objective determination by that official of the reasonable cost of the associated regulatory action. By law, the fee may not exceed that amount.
The ordinance clearly gives the CAO the authority to establish a schedule of fees and then increase or decrease the fees on that schedule as necessary to reflect changes in the costs to the county.
It is far less clear that it allows the CAO to vary permit fees on a project-by-project basis. And there is absolutely nothing in the ordinance even remotely suggesting that the CAO can issue blanket fee waivers or exemptions for certain projects.
The County Council, not the CAO, has the power to make policy decisions that favor one type of development over another.
No TOD Justification
Even if the CAO has the authority to adjust permit fees on a project-by-project basis, which is doubtful, that authority must be construed in the context of the purpose of the ordinance, which is to allow the CAO to establish and adjust the fees based on the costs of the associated regulatory actions.
The ordinance does not give the CAO the authority to pick and choose which types of development deserve fee waivers on policy grounds and which do not.
The so-called “Jablon memo” from June 2018 implies that the project’s status as a transit-oriented development (TOD) was the reason for the waiver.
IG Madigan apparently found no analysis justifying a reduction or elimination of fees based on a TOD project.
The Olszewski administration was already knee-deep in the Metro Centre scandal when Madigan began looking at the project last year
Rodger’s letter of last September adopted the Jablon memo as the basis of her decision to continue the fee waiver – without further justification for the waiver or a description of its financial impact on the county.
It is my opinion that she made a policy decision exempting Metro Centre from permit fees that Section 35-2-302(a) of the County Code did not give her the authority to make.
The Olszewski administration was already knee-deep in the Metro Centre scandal when IG Madigan began looking at the project last year.
Rodgers’ efforts to legitimize and continue a costly deal made by a rogue official from a prior administration did nothing to make this scandal go away.
• David A. Plymyer retired as Anne Arundel County Attorney in 2014 after 31 years in the county law office. He can be reached at firstname.lastname@example.org and Twitter @dplymyer.