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Royal Oak OKs first reading of stormwater ordinance

City to set fee schedule next month

By: Sarah Wojcik | Royal Oak Review | Published November 19, 2019

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ROYAL OAK — On Nov. 11, the Royal Oak City Commission unanimously approved the first reading of a stormwater authority ordinance, which would shift the way the city calculates and collects fees for the treatment of its stormwater.

The city has been working with consultants at Livonia-based OHM Advisors since July 2018 to implement a stormwater utility that would charge property owners based on the square footage of their stormwater runoff.

The stormwater fees are currently a component of the city’s water and sewer rates.

Interim City Manager and City Attorney David Gillam said the city does have the authority to continue to assess the stormwater fees as part of its water and sewer rates, pursuant to a $2 million settlement reached in a class-action lawsuit against the city, which mandated that the city change how it bills residents for debt service on the Oakland County Water Resources Commission’s George W. Kuhn Drain.

In 2018, the city began to levy an ad valorem tax, based on property value, for the debt service instead of including the debt service fee in sewer charges, as it had done before; however, Gillam said the city does not want to continue financing the debt service or other stormwater costs through such a tax.

“We feel (apportioning stormwater costs based upon the amount a given piece of property actually contributes to the stormwater system is) more fair. It’s more equitable, and in the long run it’s more consistent with the city’s goals in terms of environmental responsibility and promoting green infrastructure,” Gillam said.

He said that the second reading of the ordinance would include several more related matters, such as a fee schedule and a more concrete credit program for increasing the amount of permeable surface on residential and nonresidential properties.

“What we envision with this stormwater authority is that, much the same as we set our water and sewer rates on an annual basis every year when the commission passes the budget in late spring or early summer, that’s the way we would anticipate handling stormwater utility fees going forward,” he said.

Those most impacted by the utility will be large, commercial stormwater contributors, such as Beaumont Hospital, the Detroit Zoo, Meijer, Royal Oak High School, Consumers Energy, Red Run Golf Club and Coventry Park Homes.

Residential customers who use a small amount of water but whose properties have a large amount of impervious surfaces, thus contributing more stormwater to the system, will also potentially see significant increases.

“Those property owners would have the greatest opportunity to create permeable surface to get a meaningful credit,” Commissioner Kyle DuBuc said. “We’re creating a strong incentive for those who are creating large amounts of runoff to install more green infrastructure on their property, whether that’s residential or commercial.”

After considering billing for stormwater based on a tiered system, placing property owners in brackets of how much stormwater runoff their properties create, Gillam said staff concluded that such an approach was not the most equitable way to approach the issue.

The commission approved changes to its zoning ordinance last month to allow for permeable paving for parking lots, driveways and other surfaces.

“Every parcel would be subject to its own calculation of impervious surface, and then the fee would be based upon the amount that particular property was contributing to the stormwater system,” he said. “We would be factoring in a slight margin of error, so the property owner would get the benefit of the doubt.”

Commissioner Randy LeVasseur said he supported the program, although he has had concerns about the city’s spending on contracts with OHM Advisors.

In July 2018, the City Commission approved OHM’s $226,000 proposal for the implementation of a stormwater utility. On Sept. 23, the City Commission voted 4-3 to extend the contract through summer 2020 for an additional $44,200 for project management, establishing a database and communication.

“We’ll continue to see these more intense storms,” Mayor Michael Fournier said. “It’s a better environmental policy. It’s certainly going to be fair, and it’s also going to keep water out of our basements through incentives over the next number of decades.”

Future water and sewer rate increases likely

In discussing water and sewer rates, Gillam said two related matters likely will contribute to increases passed on to consumers.

The first, he said, is the elevated levels of lead recently detected in eight out of 30 homes with known lead service lines.

“We’re in the process of working with the county and with the state to develop a plan to replace lead supply lines in the community, and the way the legislation is currently written, that’s going to be our responsibility to do. We’re going to have to bear the cost of that,” Gillam said. “We’re not looking at any source of state funding at this point in time, so as we move forward through that, that’s going to be a significant expense, and it’s probably going to end up having to be passed along to our customers through water and sewer rate increases.”

The city speculates that approximately 6%, or 1,400 service lines, of the city’s 23,741 total service connections were constructed with lead or materials containing lead.

For more information about lead and lead testing, visit or call a dedicated city hotline for lead questions at (248) 246-3999.

Gillam said that litigation regarding sewer backups from the August 2014 flooding is also pending.

“Depending on how those matters resolve, those also could have an impact on water and sewer rates,” he said.

Call Staff Writer Sarah Wojcik at (586) 218-5006.