A $42,000 Water Connection Fee?!

I am told by small business entrepreneur, Dan Heller, that he and some of his cohort will be meeting with Metro Water Services Director Scott Potter and Council Member Erik Cole today about MWS's business connection fees. In a letter addressed to the Mayor's Office after a previous meeting with Karl Dean and Eddie Davidson, Dan writes:

[M]any of Nashville’s small businesses start-ups are now “D.O.A”—killed by Metro Water’s debilitating water capacity and connection fees.
Example: Matt Charette, a successful restaurant owner in East Nashville with plans to convert a long-vacant building into his third, upscale store, was socked with an up-front capacity fee of $42,000. This obscene amount—representing more than 30% of his total build-out costs—makes it impossible for him to get off the ground. Many other small business people in Nashville have similar horror stories ....
While it’s clear Metro water requires additional revenue for capital improvements, eviscerating the already scarce start-up resources of small businesses—the engine that drives our economy—seems the most counter-productive of all “revenue enhancement” options, especially in transitioning parts of town where less money goes a long, long way toward visible, community improvements.

$42,000 seems skyrocket-high for small local businesses.


UPDATE: Council Member and water wonk Emily Evans responds:

The fee is based on water and sewer usage estimates according to state design standards. In other words, the state issues guidelines on how much water and sewer a typical house puts out, how much a typical restaurant puts out, etc as a way for cities to estimate how big their water and sewer treastment plants need to be. These guidelines are expressed as units of flow. A typical house is one unit of flow. A restaurant's units of flow will be variable depending on size so it is usually estimated based on number of seats. The bigger the restaurant, the bigger the units of flow and the more capacity the system must have ....
We can pay for that increased capacity two ways. We can fold it into general rates and everyone pays a little bit .... [or] We make the restaurant entrepeneur or the subdivsion developer pay into a fund to build additional lines, more pumping stations and larger treatment plants. This approach appeals to people who think those that have the biggest impact should pay. Both are valid ways to do it.

That last part of Ms. Evans' reply was what I told Dan I suspected when we talked about the high connection fees for businesses. I assume that if Metro Water cuts those high fees, then they will raise the rates of regular payers.