Raining Big Bucks

Four years after Lenoir City implemented a stormwater utility fee, only a small reserve exists for emergencies and special utility-related projects.

The fee was implemented July 1, 2017, and generated about $493,000 in the first year. The city has since budgeted roughly $550,000 annually.

For the 2020-21 fiscal year, $528,771 was collected and $503,337 spent, according to city finance director Maggie Hunt.

Greg Buckner, city stormwater manager, estimated 80% of funds each year go toward salaries and benefits, routine maintenance, administration, mapping, education, engineering fees, outreach and permitting.

“We were made to have our program,” Buckner said. “With that comes responsibilities of maintaining the infrastructure that we have to make sure it’s in working order to make sure that when the job sites come in that they’re doing their job on protecting the surrounding properties. There’s inspections that have to be done on those, there’s the plans when they come in have to meet certain criteria. All that does entail money, specifically workforce. Most of that the city was already spending, the large number out of the general fund. It had eaten away at other departments on where you could spend the money.

“Two main purposes in doing the utility fund and setting it up as a utility and not a tax is you can carry that money over for major infrastructure repairs or building in the future,” he added. “The two big things were to fund that manpower that was already being spent out of the general fund that wasn’t 15 years ago.”

The reserve fund has amassed $243,850 so far.

Buckner believes a “comfortable” reserve should be $1.5 million-$2 million, and he knows that will take time.

“That routine maintenance stuff is going to determine what gets carried over each year,” he said. “The main goal is that every year a certain portion of it that can get carried over so each you’re adding to this lump sum up here so that if we do in 10 years have something blow out, if we do in 10 years, we have enough money here that covers that and it doesn’t come out of general fund at all. ... Let’s say one year you may carry $100,000 over, one year you might carry $50,000 over. When you have a big storm like we did (in February 2019), when you’re talking two weeks of cleanup and it’s going into overtime, that man hours cuts into it a lot. You could spend $25,000 in four days on overtime.”

“And then eventually we identify certain projects,” Amber Scott, city administrator, added. “We identify that this area we’re going to fix, but you’re looking at $500,000 projects in one lick.”

Lenoir City has been classified as a Phase II municipal separate storm sewer system (MS4) by Tennessee Department of Environment & Conservation since 2008 and for years absorbed those costs in the regular budget.

The stormwater fee is $3 per month for residential and uses a more expensive sliding scale for non-residential.

The MS4 designation requires Lenoir City to conduct public education for residents on polluted stormwater runoff, provide opportunities for residents to participate in program development and implementation, and develop and implement a plan to eliminate illicit discharges in the storm sewer system. The city must also develop, implement and enforce programs for erosion and sediment control, discharges of post-construction stormwater runoff from new and redevelopment areas, and prevent and reduce pollutant runoff from municipal operations.

“Since the time that we became an MS4 the citizens of Lenoir City absorbed through other means the funds we needed to fulfill this program, and this fee, a user fee is really what it is,” Scott said. “... In 2017, we finally reached that point where somebody was going to say, ‘OK, why are you not funding this like you’re supposed to?’ We came up with a structure that we felt was fair. We compared it to other municipalities in areas around us. Some cities do a tax, some cities do a property tax increase and many cities do a user fee like we did.”

Recent residential construction in the city could help generate more funds, but how much remains to be seen. Scott said if all planned residential developments work out, the city could get an additional $53,000 in revenue.

“The biggest thing is new subdivisions coming in now, new commercial businesses coming in now, they have to provide their own storage to a limit for rain events,” Buckner said. “Most of the time that’s a 25-year rain event. ... Things do change and if you get bigger rains, at some point we will have to have the money there to do other projects. Newer projects that are coming in are better than the ones that were built 20 years ago and ones that were built 50 years ago.”

“And that’s why we’re building a reserve,” Scott added.