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Mayor Barry Says No Property Tax Rate Increase in 2017 at Rotary Club

1/30/2017

Will Seek to Modernize Stormwater Fee System for Infrastructure Upgrades

Mayor Megan Barry told an audience at the Rotary Club of Nashville that Metro would not seek to raise the property tax rate for Davidson County residents in the budget for fiscal year 2017-2018, which will be released in late April.

Watch the Mayor's Address to the Rotary Club of Nashville

“While the upcoming property reappraisal will result in a new tax rate that is revenue-neutral for Metro government, we understand that some property owners living in fast-growing areas will see higher tax bills as a result,” said Mayor Megan Barry. “Because we know the reappraisal will hit some property owners harder than others, I’m committed to submitting a budget to the Metro Council that will not include a property tax increase.”

In April, Davidson County Property Assessor Vivian Wilhoite will begin sending reappraisal notices to property owners. Recent estimates show that the average assessed property values will increase by 30 to 35% countywide, with some areas seeing larger increases and some smaller. State law prevents local governments from increasing revenues as a result of a reappraisal, so the certified tax rate will decrease by a significant amount in order to counter the increase in property values. However, property owners whose values increase more than the countywide average will pay more in taxes, while those whose value increases less than the average will pay less.

Initial indications are that the certified tax rate, which needs to be approved by the State of Tennessee, will be at or near the lowest levels in the history of Metro following reappraisal. Seniors, veterans, or disabled Nashvillians who meet certain low-income criteria may be eligible to participate in the property tax freeze or relief programs. Details are available through Metro Trustee Charlie Cardwell’s office at 615-862-6330.

Mayor Barry also announced plans to modernize Nashville’s stormwater fee structure to meet the needs of our growing community, while making the fees more equitable for Nashville’s property owners.

“Stormwater infrastructure continues to be one of the biggest concerns among Council Members and their constituents,” said Mayor Barry. “Modernizing the fee structure will allow us to protect the investments we’ve already made in stormwater infrastructure and start investing to manage newer problems. In order to do so, we are proposing a more equitable fee structure whereby the rates of smaller homes and businesses will be frozen, and properties with larger impervious surfaces will pay more for the water runoff they create.”

A recent study undertaken by Metro Water Services found that there is a large and growing funding gap between the evidence-based assessment of Metro’s needs and actual investment in the stormwater program and infrastructure. Additional funding is needed to meet the needs of stormwater customers in the area of capital renewal, repair and improvements. With the current funding gap, the existing stormwater program is projected to exhaust the Net Accumulated Fund Balance during FY19 and will effectively be out of cash reserves.

“Investments in stormwater infrastructure are necessary to protect our residents’ property and possibly save lives in flood conditions,” said Metro Council Public Works Committee Chairman Jeremy Elrod. “The new stormwater fee structure, if passed, will be fairer and will allow us to fund critically needed projects throughout city.”

Nashville currently ranks fifth from the bottom in a survey of 80 large cities’ available funding to support their stormwater programs. The current fees have not changed since 2009, despite the fact that the cost of containing and managing stormwater has changed, and the fee revenue has lost 20 to 25% of its buying power to inflation. Under the newly proposed fee structure, generated funds will increase from $14.4 million to $34.6 million annually. This will allow Metro Water Services to increase bond capacity for stormwater projects, expand staff and street sweeping services, and raise ”Class C” projects from $1 million to $3 million annually.

“While we have been able to accomplish much with the stormwater fees introduced in 2009, Metro Water Services is reaching our limit on building new infrastructure to meet the demands of the city,” said Scott Potter, director of Metro Water Services. “The increased revenues generated through the modernized fee structure will allow us to save money in the long term through improved maintenance of our current and expanded network of stormwater infrastructure.”

The stormwater fees are flat rates determined by the square footage of impervious area (disturbed or hardened surface areas that either prevent or limit the natural entry of water into the soil, such as rooftops, buildings, streets, parking lots, and sidewalks of a property parcel. In an effort to modernize the stormwater fee structure, rates for residential properties with 400-2,000 square feet of impervious area and non-residential properties with 400-6,000 square feet of impervious area will remain at the same fee levels, $1.50 and $10.00, respectively. Additionally, non-residential properties will expand from six to seven tiers in order to make rates more equitable. The current and proposed rates are as follows:

Current Stormwater Rates

Property Type: Impervious Area (Square Feet) Current fee per month
All with < 400 square feet of Impervious Area 0.00
Tier 1 – Residential : 400 – 2,000 1.50
Tier 2 – Residential:  2,001 – 6,000 3.00
Tier 3 – Residential:  more than 6,000 4.50
Residential Condo (per unit) 1.50
Tier 1 – Non-Residential: 400-6,000 10.00
Tier 2 – Non-Residential: 6,001 – 12,800 20.00
Tier 3 – Non-Residential: 12,801 – 51,200 40.00
Tier 4 – Non-Residential: 51,201 – 300,000 100.00
Tier 5 – Non-Residential: 300,001 – 1,000,000 200.00
Tier 6 – Non-Residential: more than 1,000,000 400.00

Proposed Stormwater Rates

Property Type: Impervious Area (Square Feet) Proposed fee per month
All with < 400 square feet of Impervious Area 0.00
Tier 1 – Residential : 400 – 2,000 1.50
Tier 2 – Residential:  2,001 – 6,000 6.00
Tier 3 – Residential:  more than 6,000 11.00
Residential Condo (per unit) 3.00
Tier 1 – Non-Residential: 400-6,000 10.00
Tier 2 – Non-Residential: 6,001 – 12,800 30.00
Tier 3 – Non-Residential: 12,801 – 25,600 70.00
Tier 4 – Non-Residential: 25,601 – 51,200 150.00
Tier 5 – Non-Residential: 51,201 – 300,000 300.00
Tier 6 – Non-Residential: 300,001 – 1,000,000 650.00
Tier 7 – Non-Residential: more than 1,000,000 1,300.00
Non-Residential Condo (per unit) 10.00

Legislation is being filed with the Metro Council to enact the proposed stormwater modernization initiative and will be heard for first reading in March. Information regarding the stormwater user fee and proposed rate structure will be posted on the Metro Water Services website. Billing questions should be directed to the Metro Water Services Customer Service Center at 615-862-4600.