title
An ordinance repealing Ordinance No. BL2023-1690, as amended, establishing a stormwater capacity fee.
body
WHEREAS, BL2023-1690, as amended, (“SW Ordinance”) established the Stormwater Capacity Fee, and authorized the Metropolitan Department of Water and Sewerage Services to collect a fee for any project that required a development permit and resulted in 800 square feet or more of impervious service; and,
WHEREAS, the SW Ordinance, codified in Section 15.64.035, was tailored to only apply to those areas served by a closed pipe system which would establish the required nexus and relationship between the fee charged and the burden developers were placing on Metro infrastructure to allow for future infrastructure upgrades; and,
WHEREAS, after the SW Ordinance passed, revenues generated between January 1, 2024 and January 1, 2025 were significantly less than projected; and,
WHEREAS, it is in the best interest of the citizens of Nashville and Davidson County that the ordinance be repealed.
NOW, THEREFORE, BE IT ENACTED BY THE COUNCIL OF THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY:
Section 1. That BL2023-1690, as amended, establishing the Stormwater Capacity Fee, is hereby repealed.
Section 2. That amendments to this ordinance shall be approved by resolution.
Section 3. This ordinance shall take effect from and after its passage, the welfare of the Metropolitan Government of Nashville and Davidson County requiring it.
Agenda Analysis
Analysis
This ordinance would repeal Ordinance No. BL2023-1690, as amended, which established the stormwater capacity fee. The Metropolitan Council passed BL2023-1690 on March 7, 2023, and the ordinance was signed by the Mayor on March 10, 2023. The ordinance was subsequently amended to extend its effective date by Resolution Nos. RS2023-2278 and RS2023-2388. The ordinance took effect on January 1, 2024. The Metropolitan Department of Water and Sewerage Services (“Metro Water”) stopped collecting the fee on January 5, 2025.
Over the life of the stormwater capacity fee, Metro Water collected $1,445,250.09. This is significantly lower than the amount anticipated when the stormwater capacity fee was first contemplated. Additionally, The Metropolitan Government was sued in a class action lawsuit claiming that the stormwater capacity fee was unconstitutional under the Fifth Amendment. While the Legal Department maintained that the capacity fee was narrowly tailored to establish the required nexus and relationship between the fee and service/purpose, it recommended settlement of the suit in light of the lagging collection performance. The Metropolitan Council thus approved a settlement refunding the full amount of the stormwater capacity fee pursuant to Resolution No. RS2025-1166.
The ordinance under consideration would formally repeal the stormwater capacity fee.