A fix for the stormwater fee?

The 2010 rate for the city's stormwater run-off fee for non-residential property that the City Council adopted on first reading Tuesday -- $6.15 per basis unit -- would probably meet the anecdotal definition of a fair compromise: neither side is happy.

It's too low to meet city hall's list of projected needs to revamp and significantly improve the city's stormwater run-off program and earn compliance with Clean Water Act standards. And it's more than 20 percent above the $5 maximum that City Council's blue ribbon study committee recommended last month as a solution to controversy over the fee.

Still, the reduced rate, if adopted on a final reading, would amount to significant relief from the current base rate of $9.60, which resulted in new stormwater run-off bills that reach into the tens of thousands of dollars for a number of area businesses and non-profit institutions. By state and regional comparisons found by the blue ribbon committee, however, even the new lower fee would still be the single highest rate in Tennessee and in surrounding southern states, and far above Tennessee's average stormwater fees.

That gap is problematic, and seems likely to remain so. Mayor Ron Littlefield's staff had proposed last year to finally meet federal clean water standards from stormwater run-off that the city had failed to achieve for more than a decade. Indeed, the city's failure had continued even after the city signed a federal consent order several years ago to come into compliance, putting the city at risk of large financial penalties for continued water contamination.

Mayor Littlefield's original compliance plan, funded under the 2009 uniform fee, would have generated $21.5 million this year. The extra money was slated for hiring additional staff; surveying and mapping the entire city's dysfunctional network of stormwater run-off conveyances, from dirt ditches to culverts, drains, pipes and junctions with combined sewers; and implementing a comprehensive program for repairs and improvements. The new lower split-rate fee endorsed Tuesday would produce roughly $10 million less than what the mayor said was needed to pay for the work he had proposed.

City officials had suggested the original improvement plan would be financed strictly by the new fee rate put into effect last year, when the fee rate more than tripled. Under the proposed cut in the non-residential rate, much of that work will have to be deferred.

That rate hike last year had fixed a flat ERU fee of $9.60 per month for both residential and nonresidential properties.

The ERU rate is a monthly fee based on an average "equivalent residential unit" of 3,200 square feet of impermeable surface, generally for roofs and paved driveways and parking areas. Residential properties of all sizes now pay, and will continue to pay, $115.20 annually, up from $35 in 2008. The new $6.15 nonresidential rate, if enacted, will substantially reduce costs to commercial and other large properties (i.e., hospitals, churches and schools), which generally have far larger amounts of impermeable surfaces that shed contaminated water.

The City Council's action Tuesday also would improve the credit for remediation work to trap and hold stormwater run-off. Businesses and institutions that build detention ponds, permeable parking areas, green roofs and other ways of reducing stormwater run-off could reduce their fee bills by up to 65 percent.

It may be, as Mayor Littlefield has noted, that cities with lower fees may be rolling some of their stormwater management costs into general municipal operating budgets. And the city may end up spreading the full repair-and-maintenance cost under the general tax base if the reduced nonresidential fee proves inadequate to the need.

If that's necessary, it's better than continuing years of non-compliance with Clean Water Act standard. In any case, city hall should track and report those costs. The City Council should know the actual cost of compliance, and face that cost with transparent budgeting.