It would be delightful for the Hamilton County Department of Education and its funding arm, the Hamilton County Commission, if the school district did not have to pay annual stormwater fees of $400,000-$450,000 to the city of Chattanooga. The only problem is it agreed to do so as part of a lawsuit settlement in 2014 over liquor-by-the-drink taxes the district was owed by the city.
Now, school officials have asked legislators to introduce a bill that would prevent municipalities and wastewater utilities from charging school districts for such fees.
The bill may set up an interesting dilemma for city mayors and urban legislators.
"They'll have to choose between the city and education," said state Sen. Todd Gardenhire, R-Chattanooga, who is sponsoring the bill along with state Rep. Kevin Brooks, R-Cleveland.
Until 2013, Chattanooga did not charge the school district for stormwater fees. Meanwhile, the Hamilton County Department of Education was anxious to recoup the back liquor-by-the-drink taxes the city owed it.
After much negotiation, the July 2014 agreement required the city to pay the school district $12 million over the next five years and gave the district the former Poss Homes site and the North River YMCA swimming pool, a deal worth around $14.5 million. The city also was to continue paying its liquor-by-the-drink taxes. The school board, in turn, agreed to pay $1.5 million in overdue stormwater fees over the same five years and continue paying the annual fees it owed, which are now $400,000 to $450,000.
Less than three years later, interim schools Superintendent Dr. Kirk Kelly said not having to pay the fees would bolster the district's budget, school board member David Testerman said the district is strapped for cash and Hamilton County Commissioner Joe Graham - the only commissioner to vote against the settlement in 2014 - called the proposed bill a good move.
At the time of the settlement, though, school board attorney Scott Bennett said the deal for the school district was 10 times better than the original offer from the city mayor's office and gave the school system nearly everything it asked for.
Gardenhire said he believes most municipalities in the state charge their school districts for the stormwater fees.
"I believe there are two exemptions" as to who pays the fees, he said. "This would be a third exemption."
The two-term senator, who succeeded Chattanooga Mayor Andy Berke in the state Senate, says his bill is not about the efficacy of stormwater fees.
"I'm not saying the [Environmental Protection Agency, which mandates such fees] is good or bad," he said. It's more about money that is not going into the classroom.
It's difficult to tell what will happen to the bill in the legislature, and on what side of the argument municipal leaders and urban legislators will fall. But Berke, who has talked about the importance of education in his re-election bid (even with the city not in the education business), could be the first to suggest a compromise.
He could set a precedent for all Tennessee cities by pledging to set aside for education the same amount that comes in from stormwater fees. He could then, among other things, divide the money among the district's schools, put it toward early education slots or use it to establish - or further - some type of workforce development programs to help non-college-bound high school students receive training for living-wage jobs.
If something like that were done, Hamilton County commissioners, some of whom are smarting from feeling the pressure to waive - and then waiving - the city's reappraisal costs and those of other county municipalities earlier this month, might be willing to ask legislators to back off the bill. Stranger things have happened, but approval of the bill by the legislature would relieve the municipalities with schools of the stormwater fees anyway.