Sunday, March 15, 2009

How Mayor Karl Dean's Water Fee Increases Unfairly Burden Small Businesses in Nashville

To get a grasp on what exactly happens to residences and small and large businesses in the Mayor's proposed water fee increase bill up for its third and final vote on Tuesday, go read blogging CM Emily Evans fine essay chocked full of details and analysis. The approach that she favors--ERU, which essentially means, "the more you pave, the more you pay"--was rejected both by the Mayor and by 24 council members (including 4 of 5 at-Large members) on second reading.

CM Evans underscores the issue of unfairness in the Mayor's bill:
Small businesses in the first two tiers [of the Mayor's proposal] occupy about 5% of the non-residential impervious area in Davidson County but will pay over 17% of the stormwater fees. Large property owners like Western Express, Opryland Hotel, Opry Mills occupy 15% of the impervious area but will only pay 3% of the stormwater fees. Under the ERU approach all property owners would pay in direct proportion to the amount of impervious area they owned. So, the folks in those bottom tiers would pay 5% of stormwater fees for 5% of impervious area and the folks at the top of the heap would pay 15% of stormwater fees for 15% of the impervious area ....

In another departure of accepted practice, the administration determined that how you own your non-residential impervious area should be major consideration in determining your stormwater fee. So, if you own your impervious area in multiple parcels because you have acquired it over many years or because your business is spread out all over town, then you pay more than if you owned it in one parcel. A business like Aerostructures will pay $400 a month because they have 3.5 million sf of impervious area on one parcel while SCI North Carolina will pay about $1,500 a month for the same impervious area on 10 parcels. Dupont in Old Hickory has about the same impervious area as Opry Mills but will be paying twice as much because their property is divided into 8 parcels.

The administration defended abandoning the ERU recommendation in favor of the tiers because they did not want to saddle large businesses that were laying people off with big stormwater fees. Of course, institutions like Fisk and Meharry will pay more under the administration's plan but hey, at least they were being honest.
So, the Mayor and 24 council members (including progressives Ronnie "Nashville's-Best-Days-Are-ahead-of-Us" Steine, and Megan "I-Will-Be-Your-Voice-on-the-Metro-Council" Barry) appear to accept that endangering the livelihood of small and diffuse businesses by disproportionately saddling them with the highest maintenance charges for upkeep of the stormwater system is preferable to layoffs at big businesses. I'm sure it does not hurt that big businesses are capable of kicking in greater campaign donations next election time.

UPDATE: Looks like I was wrong about the giving potential of big business at campaign time given that most of them were actually supportive of the "more pave, more pay" approach to stormwater fees. CM Emily Evans wrote me to say that most of the big businesses in town like Gaylord, Vanderbilt, and the Airport did not balk at the ERU fee. She believes that only one big corporation lobbied against the ERU approach, and that most of the big ones "could not have been more helpful and encouraging."

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