Stormwater funding moving to front burner

December 19, 2011
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Grand Rapids needs to upgrade its stormwater management system to improve the quality of life in the city. City officials, who are proud of their sustainability achievements and the city’s water quality, know that. The West Michigan Environmental Action Council, which is based in Grand Rapids, knows that, too.

So there isn’t disagreement over whether an improvement is needed and there isn’t an argument over whether green practices should be used to better manage stormwater runoff, which sends very harmful pollutants such as heavy metals into the Grand River.

The difficult issue is how an upgrade would be paid for, as property and income tax revenue to the city has not kept pace with inflation for more than a decade and state revenue sharing has fallen by $11 million since 2002. In addition to those three revenue streams, another declining source is the gasoline tax the city receives.

The cost to improve the system currently exceeds what the city can budget for it, which normally has been around $3.6 million but is $3 million for this year. As of now, nothing is in the budget for the 2013 fiscal year.

“Businesses have a lot to lose if stormwater isn’t correctly managed, such as the quality of our streets, the opportunities for transportation and quality of life issues. The fact is this is a public health and a public safety issue in addition to an environmental issue. This is basic infrastructure. It’s important to keep that in mind,” said Rachel Hood, WMEAC executive director, who added that her group is working with the Grand Rapids Area Chamber of Commerce and others on the issue.

“We’re working with the city on an emerging issue and that is funding for stormwater management in the city’s budget. The city, of course, has been anticipating that there will be increasing pressure on the four funding sources that contribute to stormwater-management operations, maintenance and capital investments. So we’ve been working to educate the community on stormwater issues,” she added.

A “Grade A” management system has been estimated at costing $13.4 million annually. Having a B-level system would run roughly $9 million a year, while a standard C-type system has been pegged at costing about $6.6 million — or about $3 million a year more than what the city needs to effectively maintain the status quo. The figures are part of a draft document that WMEAC has put together for the effort.

Nick Occhipinti, WMEAC policy and community activism director, pointed out that a new revenue source, or sources, needs to be found because current federal and state revenue streams are drying up and the funds within the city are often constrained.

“Both are relevant for obvious reasons. You have the revenue streams coming in, and those are drying up. Then within the city budget, we have individual funds that are constrained in certain ways. We can also have those drying up even when the money itself is stagnant or just holding steady for inflation. So we have seen things going on there,” said Occhipinti.

The major question is how the funds should be raised to improve the system. WMEAC has suggested a number of funding options and combinations of sources. One is to establish a stormwater utility, which nearly 1,200 municipalities in 39 states have already done. Residents would pay a monthly tab, just like they do for other utilities. Monthly fees across the country range from 50 cents to $22, with the average being $4.19. Another option is to allow the county’s Drain Commissioner to levy a fee on users in the city’s 28 drain districts. A third option is to go before voters with a millage request.

WMEAC also pointed out that the final funding could actually come from a combination of sources, such as pairing revenue from the utility bills with the receipts from a millage.

“There are a lot of different combinations there,” said Hood. “We need to replace our current funding source.”

Of course, before a source can be chosen, a decision will have to be made on what management level the city should employ, because a Grade A system will cost more than staying with the status quo. WMEAC has estimated a top-shelf system would cost each residence $8 a month. Systems rated B and C would cost $6 and $4 a month, respectively, while continuing the current system would result in a $2 monthly charge. Hood said the community has to decide what management level it wants and how much it wants to pay to have it.

Occhipinti said the city graded its current system as somewhere between a C and a D. “There’s nothing really scientific about this. It’s just looking at all the data and doing our best guess as to where we are as compared to where we want to be,” he said.

Hood said discussions would continue with stakeholders for the next few months, with much of the talk centering on the pros and cons of the funding options. She hopes to present recommendations to the City Commission by early spring and reach a consensus when summer arrives.

“It really is our preference that we design the funding source with the business community, with stakeholders, rather than present them a solution and have them say yes or no to it. We want to have them be a part of the process. They have skills and expertise to bring to the table that just really aren’t on our radar,” said Occhipinti of the business community. “We’re hopeful that will happen.”

The city is stretched over nearly 84 million square feet, and almost 18 million square feet, or 21 percent, is categorized as being impervious, meaning it doesn’t absorb rainwater or snow melt and serves as a channel for sending metals like copper and zinc, along with everyday trash, into the river.

“From an internal perspective, there is a pretty broad understanding across city departments that this is an issue that needs to be addressed as a community,” said Hood. “The city has a long history as a leader in water quality and water management. And then there is the fact that our greatest natural resource is our river, and I think that plays predominately into this community’s ethic and the city’s ethic around water issues.”

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