Chattanooga business owners billed full stormwater fee for first time

Chattanooga business owners billed full stormwater fee for first time

November 8th, 2013 by Joy Lukachick Smith in Business Around the Region

The highest-ever water runoff fee levied on Chattanooga business owners this year is the latest blow for a city forced to find a solution to the decades-old problem of clogged pipes, polluted runoff and blocked ditches.

The sticker shock marked an end to a series of temporary measures designed to stave off high bills required to fix the city's broken stormwater infrastructure, which ran out this year after a four-year grace period.

That means that as of today, Scenic City landowners are paying one of the highest rates in the Southeast, said local business leader Bill Raines.

Raines, the president of The Raines Group who led a blue ribbon committee four years ago to study how to reduce the water bill rate, said his business sits on 11 acres of land and includes four buildings, gravel roads and giant parking lots. That means his water quality fee totals $14,400.

In 2010, the previous City Council gave all nonresidential property owners an exemption on their water quality fee that is based on calculating the owner's equivalent residential unit, or ERU, for each 3,200 square feet of built or paved space.

The owner then pays $115 for each ERU. But the cost was originally reduced in 2009 to $73.80 per unit, going up about $10 per year.

Homeowners have been charged the higher rate since 2009.

City Engineer Bill Payne told a crowd of community leaders Thursday that not many people have taken advantage of multiple incentives the city has created to curb the water quality tax.

The issue was discussed at a local summit hosted by the National Association of Water Companies for regulators, utility services, local officials and manufactures to look at how to solve growing problems with aging water infrastructure. Tennessee faces a $3.5 billion challenge in the next 20 years to update the state's drinking water infrastructure.

Chattanooga isn't limited to water woes and also faces steep fixes for sewer system errors.

Chamber of Commerce President Ron Harr quizzed local leaders during the summit on some of the key challenges the city faces. Among those questions was the status of a $250 million consent decree Chattanooga was pounded with earlier last year in part because of overflowing sewer systems.

Payne said the city is moving forward with the first phase of the 16-year project, spending $150,000 in the next five years to make infrastructure changes. This should reduce the amount of stormwater entering the sewer system and stop the water from leaking into the sanitary sewer pipes, he said.

On top of the latest federal penalties, the city still is paying for proposed fixes to the stormwater program after state regulators slapped the city in 2005 with a $100,000 fine and the city avoided $535,500 of proposed fines.

Payne said that only 300 parcels among more than 6,000 commercial properties have applied for a credit after the city offered the incentives to try to reduce bills for owners of nonresidential property. The city has awarded only 176 land credits, equaling about $250,000 in savings each year. That's compared to the 6,500 parcels of land that qualify for these incentives, he said.

Owners can receive these tax breaks for projects that reduce the city's stormwater burden such as planting trees or constructing natural buffers around a stream.

Raines said the city is working on a new list of incentives to be introduced next December.

Contact staff writer Joy Lukachick at or 423-757-6659.