STORMWATER PERMIT FEE FOR ALL?

Originally published: 01/22/2024

Tomorrow, the council will hear a resolution to amend the Stormwater Capacity Fee, which took effect on July 1st. The new amendment would add exemptions to the original bill, which tacks on a one-time stormwater utility permit fee for any future developments that plug into Metro’s water and sewer system.

HOW IT STARTED

Near the end of 2016, Metro realized it had a problem: Music City was facing “$207 million in backlogged stormwater projects.” To address the ongoing issue, the council approved a monthly stormwater fee in early 2017. According to the Tennessean, the fee was tacked onto “85 percent of Nashville’s homeowners and three out of every four businesses in town.” When last year’s new, one-time stormwater utility permit was introduced, it became clear that Metro Water was still a day late and a dollar short.

"It will be another game-changing private-public partnership," said original bill sponsor Jeff Syracuse on the courthouse floor last February. "A win-win for both sides." His bill established the privately funded fee, which would be used by public engineers to offset the cost of Nashville’s growing impact on its water systems. In doing so, it created two separate funds: the “extension and replacement fund,” which will be bankrolled by development fees collected in the combined sewer service area, and the “stormwater capital fund,” which will be funded by fees collected in the separated sewer service area. The latter will receive an “annual budgetary allocation” decided on by the council each year. At the time, the council also passed an amendment to the bill that created an exemption for affordable housing projects.

HOW IT’S GOING

Last month, Metro Legal raised concerns over potential lawsuits. “At the end of the second quarter of 2023, the master plan [for the stormwater capacity fee] was complete,” explained Coucilcmember Sheri Weiner during 2023's last Budget and Finance Committee meeting, “And that's when the residential developers and their attorneys came and said, ‘If you don't take us out, there's probably going to be a lawsuit because this should not apply to us.’”

Later that day, during Metro’s final meeting of the year, the new exemptions to the Stormwater Capacity Fee were brought before the council. At the time, the resolution was essentially meant to cover all the bases, a lesson learned from the cautionary tale of requiring developers to pay for sidewalks in Nashville. Specifically, it would waive the fee for “satellite cities and single-family, two-family, and residential multi-family projects” outside of the downtown core that don’t directly connect to the mixed water system.

Unfortunately, many questions were left unanswered during discussion, and Metro’s legal team did not have an official analysis available. The resolution wasn’t passed, but instead deferred until January 16th and referred to today’s Transportation & Infrastructure Committee meeting.

As the first official council meeting of the year inches closer, at-large council member Quin Evans Segall filed an amendment to the resolution that would create an appeals process: if passed, it would allow developers to have “the stormwater capacity fee calculation” reviewed. As far as the myriad exemptions outlined in the resolution go, further discussion during today’s transportation committee meeting will likely shed more light on the situation.