Norfolk Southern, the biggest customer of Roanoke’s 2-year-old storm water utility, would be exempt from as much as $500,000 in fees under a bill that just passed the Virginia Senate with no opposition.

The bill would exempt from fees the miles upon miles of rail beds Norfolk Southern owns in the city, including its sprawling rail yards.

That loss of fees could add up to 10 percent to the bills of every other customer, according to Roanoke’s city engineer.

“It’s a disastrous bill,” City Attorney Dan Callaghan told the Roanoke City Council on Tuesday. The bill would affect any Virginia locality with a storm water utility where there are rail beds.

The council voted 6-0, with Councilman Court Rosen absent, to authorize its lobbyist to try to defeat the bill, which was supported by Sen. John Edwards, D-Roanoke, in the Senate’s 39-0 vote on the measure Monday.

Roanoke became the last major city in Virginia to create a storm water utility in 2013 in response to federal requirements to clean up impaired streams. In Roanoke, 11 of 13 watersheds are deemed impaired by regulators.

The city’s approach is to pay for the cleanup by assessing a fee on all impervious surface in the city because those surfaces cause water to run off into rivers and streams, polluting them. No one is exempt from the fee, including the city itself, though landowners can take measures to mitigate runoff and reduce their fees. The fee is expected to ultimately generate about $5 million per year to go toward more than $70 million in work needed on the city’s storm water system.

Owning about 800 acres total in the city, Norfolk Southern is by far the utility’s biggest customer, according to city officials.

Coal dust from along the tracks regularly washes into the river, City Manager Chris Morrill told the council. If the rail beds are exempt, he said, “we’re still going to be responsible for what they’re putting in the river.”

At the crux of the debate is an argument from NS that its rail beds are not impervious surfaces because they are covered with tracks and ballast — large gravel — that allow water to pass through.

City Engineer Phil Schirmer said the water does pass through the ballast, but then it runs into densely compacted earth that’s impenetrable. Water can’t pass through that earth — which is compacted as part of the construction process — making the rail beds impervious.

Norfolk Southern spokeswoman Susan Terpay was traveling Tuesday afternoon and unable to respond to questions about the bill.

Norfolk Southern is a significant political contributor, giving about $95,000 to political campaigns last year, more than half of it to Republicans. Recipients include the bill’s chief patron, Sen. Frank Wagner, R-Virginia Beach, who received $1,000, and Edwards, who received $500.

Councilman Ray Ferris asked Callaghan if he had explained the city’s perspective to Edwards, and Callaghan said he had.

“I believe he understood our concerns,” Callaghan said.

“I’m very disappointed that Senator Edwards heard your concerns then apparently voted with everybody to exempt the railroad,” Ferris said.

Edwards was irritated by the remark.

“If this was that important, come see me sooner,” he said.

Edwards said he only learned of the city’s concerns Friday afternoon, after the bill had passed out of committee, when the city’s lobbyist told him about it. He approached Wagner about it and found him defensive, but when the bill came up in the full Senate on Monday, he said, the section dealing with railroads was narrowed in a floor amendment.

The original bill exempted all land in railroad-owned rights of way, including buildings. The revised version exempts only tracks and ballast.

“Everyone seemed to think it solved the problem,” Edwards said, adding if that’s untrue, he and his counterparts in the House of Delegates can work to further amend the bill.

The bill had other positive aspects, Edwards said, including allowing localities to enter into public-private partnerships to reduce the cost of storm water management.

“I knew I couldn’t stop it anyway,” he said. “I’m not surprised the city’s not happy with it.”

But he reiterated that the bill still has to be heard in the House. “If there is still a problem, we can still work on it,” he said. The bill has been referred to the House Committee on Counties, Cities and Towns, which is scheduled to meet Friday.

For city officials there’s still a major problem.

“This is tantamount to another unfunded mandate,” Ferris said. On one hand, the federal Environmental Protection Agency and the state Department of Environmental Quality require cleanup of streams and rivers, he said. And then the General Assembly comes in and undercuts the city’s ability to do it with an exemption like this one.

Callaghan reported to the council that the city could lose $250,000 annually if the bill passes. Schirmer said that when the utility fee is fully phased in at 90 cents per 500 square feet of impervious surface, that number would be more like $500,000.

He said the railroad is already receiving credits for the ballast that reduce its bill by 20 percent. “I think we’ve been generous,” he said.

The railroad can reduce its fees further, too, Schirmer said. Something as simple as allowing or planting low brush along tracks would reduce the runoff of pollutants and earn the railroad more credits against its bill, he said.

City officials objected not only to the potential loss of revenue, but also to the blow the exemption would deliver to the utility’s fundamental fairness.

“It’s equitable. You pay on what you got,” Schirmer said. “At the point you treat somebody special, it’s going to cost more for everybody else.”

Staff writer Alicia Petska contributed to this report.

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Matt Chittum covers Roanoke City. A Roanoke native, he’s been at the Roanoke Times for more than two decades, having overcome an inauspicious start with a part-time clerical job.

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