A recent West Michigan Environmental Action Council report commissioned by the city lays out two possible options — setting up a utility that charges a user fee or creating a stormwater millage — for how the city can come up with funds to make improvements.
Just to maintain the city’s antiquated system would require an additional $3.6 million per year. Upgrading to an ideal system would cost $13.4 million annually.
The proposed cost to taxpayers is between a $2 and $8 fee per month for residences if the city goes the route of setting up a utility. A stormwater millage would be an admittedly less equitable solution because it bases fees on property value, not on actual use of the system, according to the WMEAC report.
For businesses and major property owners, the impact is more significant in either case. The potential for steep charges that could range into the thousands of dollars is a real possibility, depending on the amount of impermeable surfaces like parking lots and other non-porous surfaces that the property owner has. The utility would be legally required to provide opportunities to mitigate the service fee through options to install green infrastructure and other low-impact development.
Fixing the infrastructure is key to minimizing the environmental impact stormwater has on regional water resources. Stormwater is a major contributor to the contamination of regional watersheds, and experts say the system must be updated to protect the resource.
“This is an important infrastructure. We’ve done a lot of work and invested tons of money to preserve our Grand River,” said Haris Alibasic, director of the Office of Energy and Sustainability for city. “When you have an infrastructure that is funded … (at) $3 million annually, that is not substantial, that’s not sustainable, that’s not enough money to maintain this kind of infrastructure.”
Sources say the city must also take action to head-off the potential impact of stricter new U.S. Environmental Protection Agency standards and increased compliance costs for stormwater runoff, which are expected yet this year.
However, it will likely take at least six months before the city completes an asset management plan and continues discussions on how to proceed, said Mike Lunn, environmental department services manager for the city.
The process could be complete by March, he said.
Coming on the heels of the WMEAC report, the City Commission put $450,000 to fund the asset management plan on Aug. 28. The money, provided through the city’s Transformation Fund, goes toward outlining the repair needed to the stormwater system, which is estimated to be worth about $800 million.
Approval for the budget amendment and contract to Tetra Tech PC of Michigan for the engineering work on the asset management plan is expected Oct. 2.
The Grand Rapids Area Chamber of Commerce called for the asset management plan so the city could better understand the stormwater problem before asking taxpayers for more money.
“We’re serious about addressing our services, but we’re equally serious about making sure that businesses have opportunities to use their resources in the best way for their particular properties,” said Rachel Hood, executive director of WMEAC. “We need to be having this conversation this year, and we need to make decisions before June or July of 2013 so we can phase this work in and do as much as possible to move forward in concert with business community.”
To help relieve some of the cost burden to property owners, the WMEAC report also cites an economic opportunity to create a Storm Water Credit Trading system. The program would allow property owners to sell or trade stormwater management opt-out credits similar to how the state’s previous brownfield tax incentives worked.
Rain gardens, rain barrels, green roofs and porous pavement are all tools that can manage stormwater as it falls, Hood said.
“What we saw was this need for the introduction of green infrastructure throughout the city and also this emerging need to develop a sustainable funding source for stormwater infrastructure,” Hood said. “Those two things merge in a really great way to call for the use of low-impact development or green infrastructure to manage stormwater.”
The WMEAC report also cites a joint study by American Rivers, the Economic Policy Institute and Pacific Institute that estimates a national investment in water infrastructure of $188.3 billion spread equally over five years would generate $265.6 billion in economic activity and 1.9 million jobs, with approximately 55,300 jobs created in Michigan.