Chattanoogans will have to pay more than $100 million in extra fees over the next five years to fix decades-old problems with clogged ditches, broken pipes and polluted runoff.
But many of those who will pay the bill for upgrading the city's stormwater system say the price tag is too high - and was adopted too quickly.
"These rate increases are bad enough, but what is worse is that we had no real notice that they were coming," said Ray Childers, president of the Chattanooga Manufacturers Association. "That's just not the way to run a city, a business or even a family. You don't surprise people with huge increases like this out of the blue, especially in tough economic times."
Officials with Chattanooga's Department of Public Works insist they had no choice. After repeated violation notices from the state, the city agreed this summer to upgrade Chattanooga's stormwater system and to improve the way it enforces the rules, conducts inspections and maintains records.
"With these increases, we can do a long-range program and not just put Band-aids on the problem," said Lee Norris, deputy administrator for the city's Department of Public Works.
The extra fees also will make Chattanooga's stormwater program self-sufficient again. In the past year, nearly half of the $10 million spent on stormwater upgrades, education programs and maintenance work was funded from the city's general fund or with state road repair money.
"We shifted resources around in the past," City Engineer Bill Payne said. "But this will provide us the resources to do what we must do without using taxpayer funds or state aid."
But by tripling overall fees this year - and proposing successive annual increases in each of the next four years - the city could discourage some builders from locating here and hurt existing businesses struggling in the recession.
The typical Chattanooga household will pay about $80 more a year in stormwater fees this year.
The jump will be far greater for some businesses. Stormwater fees for Invista's Hixson plant, formerly owned by Dupont, will jump nearly elevenfold to more than $200,000 a year.
Mark Longnecker, chief financial officer for Southern Champion Tray Co., said stormwater fees at his business jumped more than fivefold from $8,400 last year to $43,400 this year under the fee schedule adopted last month by the Chattanooga City Council.
"That's after we already spent $150,000 to put in a detention pond, floatable skimmers and other improvements," he said.
Steve Underwood, owner of East Tennessee Grading and chairman of the Associated General Contractors of East Tennessee, said his company's stormwater fees tripled to nearly $4,000 this year.
"It's an additional tax, and I think it's going to impact anybody moving into this area," he said. "If businesses have the option of moving somewhere else for less money - and they are on the edge of trying to make a decision where to locate - it definitely will make a difference."
The stormwater fees outside Chattanooga in Hamilton County are less than 8 percent as much as those in the city.
"We don't plan to raise our rates next year, and I hope we won't have to adjust our rates for several more years after that," said Tim McDonald, program manager for Hamilton County's water quality program.
While state inspections identified numerous deficiencies in the city's stormwater program, state inspectors gave passing grades for all 34 program elements of the county program.
Mr. Norris said Chattanooga has to conduct more inspections and perform more ditch maintenance under its state permit.
Although Chattanooga is the only major Tennessee city now under a consent order with the Tennessee Department of Environment and Conservation for its stormwater program, other U.S. cities are facing bigger problems than Chattanooga's. Birmingham, Ala.; Dallas; and Louisville, Ky., all face penalties if they don't make costly upgrades to their stormwater systems.
Under President Barack Obama, the U.S. Environmental Protection Agency has pledged to beef up enforcement of water quality standards.
"In many parts of the country, the level of significant non-compliance with permitting requirements is unacceptably high and the level of enforcement activity is unacceptably low," EPA Administrator Lisa Jackson said in memo to EPA enforcement officers this summer.
council wants answers
Chattanooga City Council Chairman Jack Benson said there seem to be no alternatives for the water quality fees. He said credits are available for some industries and businesses.
"I haven't found anything to specifically change what's already in motion," he said.
The council wants to question the administration further at a meeting set for Nov. 19 about how and where the stormwater fees were being spent. He said initially council members were told the money was to help keep the city in line from "government intervention."
But he said he also heard city administrators say the money would be used for what needs to be done and "what they've always wanted to do," Mr. Benson said.
He said using the word "wanted" is troubling to him.
"We told them we want to know exactly what mandates state- and federalwide are being put on us," Mr. Benson said. "If they plugged in the desirables, really we can't afford the desirables."
The stormwater fee increases are expected to generate around $22 million a year. Two-thirds of the money will help pay for debt, inspections and water quality testing, said Mr. Norris.
One-third will be used for capital improvement projects like new drainage ditches and pipes, city officials said.
Mr. Payne said the city will set aside $5 million for its capital improvement projects. The money also helps equip and maintain additional crews. There are expected to be about 30 to 40 employees in the Water Quality section, officials said.
This is to maintain almost 10 million feet of drainage line within the city, Mr. Norris said. A lot of problems lie in those drainage ditches with many of them near failing, he said.
"Those are the things we have to fix," he said.
A consultant company conducted a study and came up with how much and where the money should be spent, Mr. Payne said. The study called for a five-year corrective action plan, but city officials said the program will continue much longer.
"We do not expect to correct every drainage ditch over five years," Mr. Payne said.
The city has been under a consent order since 2005 to take corrective action and the new water quality fees have been set to address those issues, officials said.
"We're not waiting around for them to tell us what we need to do," Mr. Payne said.
At 1 p.m. Nov. 19, city Public Works officials will explain the new stormwater fees during a public meeting at the City Council meeting room, 1000 Lindsay St.
By the numbers
* $36: Previous stormwater fees for year for each equivalent residential unit
* $115.20: New stormwater yearly fee per ERU
* $163: Proposed yearly stormwater fee per ERU by 2014, if approved by the City Counciol
* $22.5 million: Stormwater bills for current fiscal year.
(Including East Ridge, Red Bank, Soddy-Daisy, Collegedale, Lookout Mountain, Lakesite, Ridgeside)
* $9: Stormwater fee for typical residence
* $613,900: Annual collections and budget for county stormwater program
* 0: Projected increase next year for county stormwater program
Under Chattanooga's new stormwater fee schedule:
* Invista's Dupont plant in Hixson, from $18,567 to $203,674
* Hamilton County Schools, from $115,000 to $385,000
* Hamilton Place mall, from $10,386 to $51,379*
* Southern Champion Tray, from $8,400 to $43,400
* Includes some, but not all, of the mall property
Source: Chattanooga Treaurer's Office, Hamilton County schools, Chattanooga Manufacturers Association
* 1993: Chattanooga starts stormwater fee to pay for upgrade.
* 1996: City obtains national pollutant discharge elimination system permit.
* 2002: A TDEC review of Chattanooga stormwater program found records and reports were unsatisfactory and ordered 22 corrections.
* 2003: TDEC issues a notice of violation to the city for stormwater deficiencies and directs the city to hire more workers and boost enforcement of rules. City agrees to corrective action plan.
* 2004: Second violation notice issued to city for failing to inspect, monitor and limit water effluents.
* 2005: City pays $100,000 fine and agrees to improvements to avoid another $535,500 proposed fines.
* 2008: TDEC inspections and surveys find more violations of city stormwater system.
* 2009: TDEC issues violation notice, and city agrees to consent order to make improvements.
* 2009: City Council raises stormwater fees for first time since 1993 and starts preparing a five-year correction plan.
Source: Tennessee Department of Environment and Public Works, City of Chattanooga Public Works Department