Detroit to ease charges on churches, businesses

Christine Ferretti
The Detroit News

Detroit — The city’s water department is softening rate hikes in its drainage charge program many feared would severely hurt some Detroit churches and businesses.

The Detroit Water and Sewerage Department board on Wednesday is expected to vote on a revised plan that lowers the cost for commercial and faith-based customers to phase over time into the fee structure — originally set at $750 per impervious acre, per month.

DWSD Director Gary Brown said the department worked closely with Mayor Mike Duggan to retool the plan and provide relief to churches and businesses facing dramatic increases under the department’s effort to create a uniform drainage billing system in Detroit.

“We believe this is manageable,” Brown said. “The goal at the end of the program is to ensure fairness and equity in the rate system and that everyone is paying their fair share.”

For churches, the new plan is expected to cut fees by 30 percent for those already paying $852 per impervious acre, per month. When churches come online July 1, 2018, they will see a dip to $598, officials said.

For churches paying a flat fee or nothing at all, there will be a five-year phase-in on the new charges that starts July 1, 2018, at a rate of $125 per month, per acre. Many churches in Detroit, he added, are less than half an acre, so they likely will be paying closer to $63 per month when the costs first kick in.

The rate will climb annually before it finally reaches $677 per acre, per month in 2022, according to the changes proposed by Duggan.

The changes come in the wake of complaints from a group of religious institutions that demanded Duggan renegotiate the drainage fee plan. Pastors of the Detroit Water Equity Coalition argued the program, first unveiled last summer, was “unjust and unholy.”

The plan was first rolled out by the water department with a three-year phase in. Officials instead will phase it up over five years. The plan also lays out a variety of credits that officials said could eliminate drainage costs altogether for some customers down the line.

Billing for drainage in Detroit isn’t new. For most, it’s been included since 1975 as part of water and sewer bills. But payments haven’t been equitable. Some hadn’t paid at all, others were billed a flat fee based on water meter size, and the rest already paid based on impervious acreage, or the developed portion of their property — the model to be used for all after the transition period.

Duggan has taken part in a half-dozen meetings with more than 300 religious leaders across the city over the last several weeks to detail the revised proposal.

The mayor has noted there are 1,100 free standing churches Detroit. Of those, only 349 had been paying the full amount of $852 per impervious acre per month. Another 338 paid a flat fee for drainage between $20 to $180 per month based on pipe size, and 420 others weren’t billed at all, he said.

Last week, Duggan presented the plan to a group of about 20 area pastors at Grace Community Church on the city’s east side. Duggan told the group he’d received calls from ministers, saying the program would be “too much of a hit, too fast” and “we heard those complaints.”

The Rev. James Michael Curenton of United Church of Christ praised Duggan for working toward a compromise. But the pastor contends the new plan “basically kicked the can down the road” and isn’t enough.

“We are agreeing to many recommendations that he’s made and the changes, but asking him to go further so this problem can be actually solved,” said Curenton, a member of the water equity group.

The water coalition has argued Detroit is bearing the cost for drainage on its own and that it should instead be “common to all” in the regional agreement forged during Detroit’s bankruptcy. The deal turned operation of its water and sewer system over to the Great Lakes Water Authority for 40 years.

Brown has countered other communities in the authority are contributing their fair share to wet weather overflow costs. The drainage fee changes, he added, have been welcomed by most.

“Most churches and commercial accounts that I’ve talked to are supportive and pretty happy that we are rolling out a five-year plan, which gives them an opportunity over the next five years to budget, number one, and to build out a green infrastructure credit that will reduce their bill permanently,” Brown said.

City-owned parcels transitioned to the new fees in October, industrial in February, commercial will begin this month and tax-exempt parcels in June.

Nonresidential customers already paying based on impervious acreage are to pay $750 per month. But under the changes, the rate will be reduced to $661 per acre this July and $598 per acre in July 2018.

If they are paying based on meter size or haven’t been billed before for drainage, they will begin by paying $125 per impervious acre, per month, when they transition, officials said.

At the end of five years, all of the nonresidential customers will be on the same rate, Brown said. Residential customers won’t be affected at this time, he said.

To further reduce monthly bills, DWSD is offering green infrastructure credits and will allocate $5 million annually from its capital fund toward matching grants for eligible drainage improvements.

Doug Kempton, lead pastor at Grace, said after a presentation last week that his church has paid $852 per month for at least a decade. He considers the new plan and options to bring costs down a win.

“There’s one thing that comes out perfectly clear in all of this; they are trying to work with the faith-based community,” he said. “I don’t know that we can ask for anything more.”

Brown said he doesn’t believe the adjusted rate model will hurt the water department’s bottom line.

The next round of water rates are expected to be approved in the coming weeks. Brown expects they will be the lowest in several decades, which he attributes to the success of the department’s water assistance programs and improved collections, which have gone from 77 percent last January to 92 percent this year, he said.

“That got us $57 million in additional revenue and it resulted in not having $57 million in bad debt to pass on to customers in next year’s rates,” he said. “With a higher collection rate, we’re able to hold the line on our rates this year to the lowest in decades.”

The drainage fees, officials stressed, are also necessary to aid the city in its handling of stormwater runoff and to meet regulations under the federal Clean Water Act. Officials say transporting and treating drainage costs the department more than $151 million annually.

The city previously spent $1.5 billion to build retention basins to deal with drainage water, Duggan said.

By 2022, an environmental permit requires the water department to eliminate discharges of untreated water into the Detroit or Rouge rivers. If it doesn’t meet the deadline, Detroit would be forced to spend another $1 billion to further build out the system.

The Rev. Cory Chavis said he’s pleased Duggan has been quick to respond to concerns raised over the fees and plans to welcome him for a meeting at his Detroit church next week.

“When the mayor saw a problem he was willing to open his door, sit down, have conversations to understand it and then set up a plan to support those pastors affected by the issue,” said Chavis, founding pastor of Victory Community Church on Seven Mile.