Stormwater utility billing changes coming in Royal Oak

By: Sarah Wojcik | Royal Oak Review | Published September 24, 2019

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ROYAL OAK — A $2 million settlement reached in a class-action lawsuit against the city of Royal Oak required the city to change how it bills residents for debt service on the Oakland County Water Resources Commission’s George W. Kuhn Drain.

The debt service fee used to be included in sewer charges, which are based on water consumption. On July 1, 2018, the city began to levy an ad valorem tax for the debt service, which appeared on homeowners’ December 2018 tax bill.

City Attorney David Gillam said the city imposed the ad valorem tax, based on property value, under the state’s drain code to cover the debt service for the drain for the 2018-19 fiscal year.

However, the city does not wish to continue financing the debt service or other stormwater costs through such a tax. Instead, it plans to implement a separate stormwater utility that would charge homeowners based on their square footage of stormwater runoff.

“This will be more transparent and more fair because properties that contribute more stormwater to the system will be charged more than those that contribute less,” assistant to the city manager James Krizan said in a previous interview. “It will also encourage residents to bring in more green infrastructure to reduce the amount of hard surfaces on their property.”

City officials hope the initiative will reduce peak flow and backups to prevent flooding, as well as cut the costs of treating stormwater.

The city also plans to update its ordinances to allow for more opportunities to install green infrastructure, including allowing for permeable driveways.

“If we’re all working together on this, we can have a substantial impact in reducing overall runoff,” Commissioner Kyle DuBuc said.

The city’s initial goal of having the stormwater utility implemented by July 1, 2019, was stifled by a number of variables, including turnover in the City Manager’s Office and Treasurer’s Office, as well as poor weather conditions for drone flyovers to determine the amount of pervious and impervious surfaces.

The new goal is to adopt the ordinance change in November or December in order for customers to see the first stormwater utility bills on Jan. 1, 2020. The rates will be set by the city annually. It also plans to set up a three-member appeals board, with at least two engineers not employed by the city of the Royal Oak.

The city believes that the cost difference will be nominal for residential properties, while commercial, industrial and institutional properties with more impervious surfaces will see more significant increases in bills.

Some of the largest commercial stormwater contributors in Royal Oak include Beaumont Hospital, the Detroit Zoo, Meijer, Kroger, Royal Oak High School, Consumers Energy, Red Run Golf Club and Coventry Park Homes.

According to the city, 48% of residential accounts will see decreases, 10% will stay the same, 30% will see an increase of 5%-30%, and 12% will see an increase of more than 30%, primarily those with low water bills.

Part of the city’s stormwater utility plan is to offer residential and nonresidential credits.

Residential property owners can earn a 10% credit if they demonstrate that 50% of stormwater is shed to green space, and a 10% credit for green infrastructure, such as a rain garden, for a maximum 20% credit.

Nonresidential property owners can earn up to a 30% maximum credit for reducing stormwater volume by 100% and a 20% maximum credit for controlling peak flow, for a maximum 50% credit.

The city will bill for stormwater based on a tiered system, placing property owners in brackets of how much stormwater runoff their property contributes.

The City Commission also discussed creating an assistance program for low-income property owners, seniors on fixed incomes and residents with low water rates.

On July 17, 2018, the City Commission approved a proposal from Livonia-based OHM Advisors for the implementation of a stormwater utility for $226,000. The firm assessed the runoff potential of all properties in the city based on hydrologic engineering principles for calculating runoff using pervious and impervious surface areas.

For more information, visit www.romi.gov or call Royal Oak City Hall at (248) 246-3000.

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

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