Opinion: Detroit Water and Sewage poised to hurt business
Imagine a monthly utility charge suddenly increasing by a factor of 40. Incredible? Try incredulous. And, soon, such increases could become a harsh reality for Detroit businesses.
In an attempt to raise greater funds for the disposal of rain and storm water runoff, the Detroit Water and Sewage Department (DWSD) has concocted a poorly conceived methodology whereby drainage fees will be calculated according to property owners’ impervious surface area (put simply, a parking lot or similar area that water cannot soak into). This results in extreme inequities between businesses.
Take for example Angeles Fashions on 8 Mile at Dequindre in the Belmont Shopping Center. Under the City’s methodology this 13,000-square-foot store will be responsible for $8,600 in storm water drainage charges annually once rates come into effect. As Angeles employs three individuals, the cost per employee will be in excess of $2,800. By contrast, One Campus Martius, which houses some 4,000 people on 3 acres, will see a cost per employee of just $7. Considering that the Angeles and One Campus Martius employees both have jobs that equally rely on a functioning storm drainage infrastructure, is it fair that this billing method taxes the Angeles employee 400 times more than the One Campus Martius employee?
Angeles and other similar Detroit businesses could soon be forced to move across the street, into Hazel Park or Warren on the north side of 8 Mile, to get out from under this charge, which is only assessed on Detroit entities. Alternatively, Angeles could be forced to reduce its staffing to offset these charges. These are the types of economic outcomes one can expect from the billing method – unemployment and city exodus.
It is the contention of the Detroit Alliance Against Rain Tax (DAART), of which I am a member, that the actions by DWSD constitute the putting forth of a revenue generating tax and, as such, are in violation of the Headlee Amendment whereby any new taxes require voter approval. DAART filed a lawsuit against DWSD in 2017. In November, the Michigan Court of Appeals struck down the suit, denying DAART from having the charge classified as a tax rather than a fee.
DAART is appealing the decision to the Michigan Supreme Court which previously addressed the topic of storm water charges in Bolt v. City of Lansing in which it established “a proper fee must reflect the bestowal of a corresponding benefit on the person paying the charge, which benefit is not generally shared by other members of society.” Dry sidewalks and roadways being examples of benefits shared by all.
It is greatly hoped that the court will take this important matter of public policy up for review and that area businesses will educate themselves on this issue before it is too late. Those who care about sustaining and expanding places to work and shop within Detroit’s neighborhoods must insist that lawmakers allocate the costs of this public infrastructure system equitably among all who benefit from its use.
Tom Petzold is owner of the Belmont Shopping Center.