Not everyone pays stormwater fees

The state of Tennessee has ordered Chattanooga to boost its staff and spend more money on stormwater and water quality programs to correct deficiencies that date back more than a decade.

But the state itself doesn't pay any of the stormwater fees the city charges to finance its efforts. Neither do many county and federal agencies.

Chattanooga City Attorney Mike McMahan said the city bills all owners of any building or other developed property in the city for the stormwater fees, whether they are public or private and whether they are exempt from local property taxes.

"We bill the state and county, and to this point we have not opted to pursue any legal action for their nonpayment," Mr. McMahan said.

Meg Lockhart, a spokeswoman for the Tennessee Department of Environment and Conservation, said the state enjoys "sovereign immunity," an English common law that asserts that the king and his government are immune from the taxes and rules that apply to others.

The state's decision exempts dozens of buildings in Chattanooga from the stormwater fee, including those at University of Tennessee at Chattanooga, Chattanooga State and the Tennessee Department of Transportation. Even the very building that houses the state agency issuing orders for stormwater improvements -- the Chattanooga State Office building on McCallie Avenue -- doesn't pay the city fee.

Mr. Littlefield said he was pleased to learn recently that Chattanooga National Cemetery pays its stormwater fees. Chattanooga Metropolitan Airport and the Hamilton County school system also pay the stormwater fee for buildings and paved areas within the city.

During a public hearing last month, businesses and churches upset by the higher stormwater fees questioned whether they were having to shoulder too much of the financial burden for the water quality improvements.

"We're being penalized, but we're really not solving the problem," said Pryor Bacon, a real estate developer and agency owner who blamed much of the runoff problems on state and county roads.

The stormwater fees are attached to property tax bills for most Chattanoogans. But churches, private schools, nonprofit agencies and even other government agencies also get the notice.

The utility fee initially was challenged in 1996 by local businesses, including former Hamilton County Commissioner Buster Vandergriff. The utility fee payment was upheld by a federal appellate court in 1999, six years after it was approved by the Tennessee General Assembly and the Chattanooga City Council.

A later challenge to the fee by a local church was rejected by a Hamilton County Chancery Court, Mr. McMahan said.

The Rev. John Barber, associate senior pastor at Brainerd Hills Baptist Church, said the water quality fee hike is making some churches in the area think about banding together and lobbying the City Council.

"They said they haven't heard much from churches, but I think that's going to change," he said.

Brainerd Hills Baptist's bill went from about $1,000 a year to $6,000 a year, he said.

One Chattanooga business that won't pay the stormwater fee is Volkswagen of America, which is building a $1 billion auto assembly plant at Enterprise South industrial park.

Mr. Littlefield said the VW exemption "is a very special case" that was part of the incentive package negotiated with the automaker to recruit the company to Chattanooga.

"If we had drawn a line and said we wouldn't give up on the stormwater fee, then I'm afraid that could have allowed them to go and build on the soybean field in Alabama where the stormwater demands were much less," he said. "I don't think we should have done that."