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Councilman Chip Henderson

Chattanooga City Council members on Tuesday passed a $273 million Chattanooga budget for 2019 that puts millions into paving and infrastructure, childhood and youth programs, affordable housing and the battle against homelessness, but also sharply raises water quality fees paid by homeowners and developers.

The vote on first reading was 6-2, with one absent.

Councilman Chip Henderson and Chairman Ken Smith voted no after Henderson's motion to amend over the water quality fee hikes failed, 5-3. But the council did get a promise from the administration to look at the water quality fee structure to see if it could be made fairer to people with lower incomes. And low-income seniors who participate in the city's tax relief program will be exempt from water quality fees, the administration said.

Henderson and Smith said afterward they felt the council's weeks of budget studies had had an impact on the process. Along with a promised equity study for the proposed water quality fee increase of nearly $13 million, council members noted the administration adjusted its plans to provide social services in Berke's anti-gang program, and dropped altogether, for now, its proposal to spend $4 million on an interactive lighting system for the Walnut Street Bridge.

In a news release, Berke touted elements of the budget, including nearly $6 million for paving and infrastructure; big funding boosts for early childhood and youth programs; $1 million each for affordable housing and neighborhood reinvestment, and more.

"The people of Chattanooga told us that these are their priorities, and I'm eager to get work," Berke said in the statement.

Many council members had objections to the proposed water quality fee. The city's Stormwater Regulations Board in May passed a five-year plan to continue required programs combating erosion, siltation and habitat destruction in Chattanooga's lakes and streams.

Most homeowners now pay a $115-a-year fee along with their annual property taxes. The five-year plan would raise nearly $13 million by hiking fees nearly 10 percent a year. It also would sharply raise land disturbance fees for developers.

Fees are based on the impervious area — such as the roof, driveways, sidewalks and other areas that won't absorb water. The city now defines that as 3,500 square feet for most homes. Business fees are calculated on "equivalent residential units," or multiples of that figure, based on size.

Henderson said he was concerned about the impact on the city's lower-income residents. He proposed taking $2 million from the city's reserves to fund the program for 2019, and using the coming year to figure out a way to reduce the impact. His suggestion was a tiered structure such as some other Tennessee cities use, so homes smaller or larger than the median would pay less or more.

Berke's chief of staff, Stacy Richardson, said the administration "is not opposed to looking for equitable funding" of the five-year plan but absolutely would not dip into reserves for fear of affecting the city's bond rating. Instead, she said, the city would request proposals for a rate equity study and bring them back to the council.

Henderson made a motion to amend the budget with his proposal, with support from Smith and Councilman Jerry Mitchell. Voting no were Vice Chairman Erskine Oglesby, Councilmen Darrin Ledford, Russell Gilbert and Anthony Byrd and Councilwoman Carol Berz. Councilwoman Demetrus Coonrod was absent.

The council is scheduled to vote on second reading next week.

Contact staff writer Judy Walton at jwalton@timesfreepress.com or 423-757-6416.

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