PORTLAND — The City Council voted unanimously Monday night to direct city administrators to draft a new storm-water fee to pay for more than $170 million in federally mandated projects over the next 15 years to improve water quality in Casco Bay.

About a dozen businesses and residents spoke against the storm-water fee and other recommendations drafted by a special task force that worked on the funding mechanism for more than a year.

Opponents asked the council to slow down the process and allow administrators more flexibility in establishing a new funding mechanism for the projects, which the city needs to comply with the Clean Water Act.

“There has to be some alternatives out there,” said Tim Reardon of Quirk Chevrolet, which has an eight-acre car lot on Brighton Avenue. Details of the fee, which would take effect July 1, 2013, and be set annually by the council, must still be worked out and approved by the council.

The fee would pay for separating about 133 miles of combined sewer and storm-water lines called combined sewer overflows, or CSOs.

Normally, the city’s treatment plant can handle CSO volumes. But when it rains, the combined volume can exceed the plant’s capacity, and raw sewage and runoff are discharged directly into city waterways, including Back Cove and the Fore River.

Separating the sewer and storm-water lines keeps the storm water from being sent to the plant during heavy rains.

The task force recommended raising half the money needed by increasing the city’s sewer rate and the other half through a new storm-water fee based on the amount of impervious surface — driveways, rooftops and asphalt — at businesses and homes.

More than $100 million has already been spent to separate 11 of the city’s 43 CSOs, but roughly another $170 million must be spent to bring the city into compliance.

Parking lot owners and car dealerships would see the greatest cost increases. But Mark Malone, co-owner of Malone Commercial Brokers, said it would also harm industrial tenants, who already pay high rents relative to surrounding communities.

“I think this is going to be devastating to industrial customers,” Malone said.

The storm-water fee would be a tiered system, with each tier measured in 2,500-square-foot increments of impervious surface.

The proposal suggests annual storm-water tax credits be given to businesses that voluntarily upgrade their storm-water systems to the highest standard set by the DEP, thus reducing their runoff. That tax credit would be capped at 50 percent of their storm-water bill.

Homeowners who build rain gardens or use rain barrels would get a one-time tax credit.

The city should seek state and federal funds for the project and look to create low- to no-interest loans for businesses looking to upgrade their storm-water systems, said Chris O’Neil, the Portland Community Chamber’s liaison to City Hall.

O’Neil also suggested the city ask Gov. Paul LePage and the new, more business-friendly Department of Environmental Protection, which oversees implementation of the federal Environmental Protection Agency’s mandate, for assistance.

“This is an onerous and punitive mandate from the EPA with almost no financial assistance,” O’Neil said. “And the city hasn’t really pushed back.”

Mayor Michael Brennan said he has spoken with both Sen. Susan Collins, R-Maine, and Rep. Chellie Pingree, D-Maine, and neither sounded optimistic about getting federal funding.

Pingree is married to S. Donald Sussman, the majority shareholder of MaineToday Media, which owns the Portland Press Herald/Maine Sunday Telegram and other affiliated papers.

Brennan said he would continue to work with other Maine cities, such as Lewiston and Bangor, to build support for state assistance, but added that the odds are not in Portland’s favor.

“That won’t prevent us from looking for legislative solutions in January,” Brennan said.

Supporters of the proposal, including Friends of Casco Bay and the League of Young Voters, argued the fee was the most equitable way to distribute the financial burden.

Councilor Ed Suslovic said the task force chose not to fund the projects through the existing sewer fee because it’s based on water usage and would not equally share the burden with parking lot owners and car dealerships, which produce a considerable amount of runoff but don’t necessarily use much water.

Property tax increases were also ruled out because the city has so many nonprofit property owners, which don’t pay property taxes, said Suslovic.

Residents said they were concerned about their sewer bills increasing to an average of $850 a year over the first five years.

While a greater reliance on the storm-water fee rather than sewer fees would reduce the impact on homeowners, Suslovic noted, Portland’s storm-water fee would likely be among the highest in the nation.

“We feel we’ve gone as high as we can and still be in a legally defensible position,” said Suslovic. “We felt the 50-50 (split between sewer and storm water) was the fairest way to go.”

Staff Writer Randy Billings can be contacted at 791-6346 or at: rbillings@mainetoday.com

Twitter: @randybillings