An independent committee studying the city's water quality fee increase suggested changes to the program's current budget, including significant reductions in spending.

"Most folks are learning how to do more with less," said Ray Childers, committee member and president of the Chattanooga Manufacturers Association. "That's what we're going to have to do here."

Bill Raines, chairman of the independent committee, gave the proposed water quality, or stormwater, program budget to the committee Wednesday morning. The current budget would be reduced by 58 percent, going from $21.5 million per year to $9 million per year.

The effect would be residential rates going from $115.20 a year to $48 a year. Businesses, industries and institutions could see a break because they can qualify as multiple residences.

Other details of the committee's proposed budget include continuing to be subsidized by the city's general fund and partially by state gas tax money, which has amounted to almost $3 million.

The program's capital improvements budget also would drop from $8 million a year to $2 million a year, Mr. Raines said. He proposed a gradual increase in the overall water quality program budget over five years with no city subsidy by the final year.

"I'm throwing this out on the table as a starting point," he said.

Mayor Ron Littlefield said Wednesday that he thought the committee's proposed budget was a "beginning point." But he also expressed dissatisfaction that it was just a "tiny bit" over the program's original budget before the fee hike, which averaged around $8 million a year.

He said the intention of the fee hike was to show federal and state regulators that the city was making a good-faith effort to meet the requirements of its water quality permit.

He said the proposed budget does not meet that effort.

"I don't think EPA would certainly be impressed with that," Mr. Littlefield said.

In December 2009, the committee started looking at how to best alleviate a rate hike the City Council implemented in October. The council raised water quality fees from $24 or $36 annually per household to $115.20 a year after hearing that federal and state regulators could come down with a consent order to force a fee increase.

The city hoped to take preliminary actions before negotiations with the state and federal regulators start later this year.

But backlash has come from business, industries and churches that say they pay substantially more than households because they can qualify as multiple residences.

On Wednesday, city officials immediately questioned parts of the water quality budget. Dan Johnson, chief of staff for Mr. Littlefield, said the City Council could face pressures on property taxes this year, and taking money from the general fund only would create added "pressures."

"It's not our intention to have the general fund subsidize water quality anymore," he said.

As committee members negotiated the budget, committee member Mike Price, president of MAP Engineers, said he did not think the $115.20 annual fee was an unnecessary burden on residential users.

"I believe the residential rate should be left alone," he said.

Lee Norris, deputy administrator for the city's Department of Public Works, said his department could live with some of the cuts.

One suggestion in the proposal called for bonds to be used for capital improvement projects for the water quality program. Mr. Norris said a dedicated source of revenue needed to be available to pay the bonds.

Mr. Price agreed, saying $2 million would not cover a lot of territory in needed projects.

"Let people see some bang for the buck," he said.

During the water quality committee meeting, Mr. Price also suggested that the maximum allowance offered for credits on the fee be set at 75 percent off the user's bill, instead of the current 50 percent. He proposed a model based on a business plan that potentially could get more users to try to seek credits while also solving water quality problems, he said.

Credits can be earned through education programs for schools, putting in retention ponds, planting trees or installing measures that improve water quality such as rain gardens or green roofs.

Mr. Raines will meet with Public Works officials this week to draft a second water quality budget proposal. He said it could include the same rates for residential users while lowering fees for non-residential users.

The committee expects to have a proposed budget to the council by Feb. 23, he said.


A proposed water quality program budget brought before the City Council's water quality committee Wednesday suggests slashing several items and lowering fees. The recommendations include:

* Lowering the annual rate from $115.20 a year to $48 a year

* Hiring no new personnel for the program

* Cutting the proposed capital improvements program from $8 million annually to $2 million annually

* Continuing to subsidize the water quality program with general funds and gas tax money

* Raising the maximum credits from 50 percent off the stormwater bill to 75 percent

Source: Independent committee of the City Council


The City Council's Water Quality Committee talked Thursday about a proposal for credits to schools. The new proposal would give a 30 percent credit to private schools for teaching about water quality. Committee member Mike Price suggested that Hamilton County Schools not pay its share of the water quality fee, which amounts to about $153,000 annually, and use that money for water quality improvements at area schools and educational programs.