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Editorial: New drainage fees a mixed bag for Detroit

The Detroit News

The Detroit Water and Sewerage Department (DWSD) in October will begin charging parcel owners for drainage fees it has never before collected. It’s part of the department’s effort to make the billing system more fair and equitable among customers.

DWSD has a legal responsibility under the state to recoup the $125 million it spends annually on drainage costs and infrastructure investments. Updating the billing system makes sense in that light.

But the city’s business economy is still fragile, and the new system is going to place huge cost increases on many businesses and industrial partners throughout the city. Detroit can’t be penny-wise and pound-foolish to assume all those customers will simply absorb what in some cases will be thousands of dollars of new fees to remain in the city limits.

They might decide to avoid the costs by relocating in the suburbs, which are managed by the Great Lakes Water Authority and don’t generally charge drainage fees for runoff storm water.

For decades Detroit customers have been paying on two different rate systems for drainage services — and 22,000 parcels haven’t been charged at all. Some have been paying on an outdated fixed-rate meter system, and others have been charged based on the size of their property.

The acreage model will be the standard for the future. And the 22,000 parcels will now be paying into the system as well. The new billing system will include commercial, industrial, residential and tax-exempt parcels, including government properties and churches.

It makes sense to make the system equitable among customers, but the spike in costs for some of those larger customers could be up to $4,000-$5,000 per month, depending on how many acres they have. Particularly hard hit will be businesses with large footprints, such as shopping centers with parking lots and warehouses.

For any customers strained by the new fees, DWSD should find ways to keep them in Detroit. Among the plans is to offer credits for installing retention ponds, rain barrels and other green infrastructure to hold the storm water and keep it out of the drainage system.

And the department is phasing in the new rates for each customer class over the next three to five years.

“If we tried to flip the switch and do it all at the same time, the cost to some commercial, industrial and residential customers would be unfair and not something they’d be able to budget for,” DWSD director Gary Brown said in an editorial board meeting with The Detroit News.

Payment plans will also be available as rates are adjusted. Brown said the department legally could back charge for up to six years. But he’s decided against doing so.

Raising the cost of doing business and living in a city that is already uncompetitive is a risky enterprise. The city should be mindful of those risks, and work with its customers to mitigate the impact.