Traverse City News and Events

City Stormwater Tab Estimated At $2 Million A Year "In Perpetuity"

April 25, 2017

New findings from a three-year state and federal grant project to survey Traverse City’s pipe lines and collection and drainage systems estimate a $2 million annual bill “in perpetuity” for city stormwater system maintenance – and up to another $1 million annually in wastewater repairs.

The findings were presented to city commissioners Monday by consulting firm OHM Advisors and city staff, who are nearing a May 31 deadline to conclude a $2.44 million SAW (stormwater, asset management and wastewater) grant project. The grant paid for new software and equipment that allowed staff to televise and clean sewer pipes throughout the city’s 80-mile underground system, create a database of necessary repairs and a prioritized capital improvement plan for addressing them, and explore funding mechanisms to pay for improvements.

“You can’t manage what you don’t know,” says City GIS Coordinator Larry LaCross, comparing portions of the city’s underground utility network to a car engine that’s never received oil changes or regular maintenance. “You take that into the mechanic, you’ll find all kinds of things wrong with it. We definitely found things that need some attention…the biggest takeaway is we need to find a way to fund these particular maintenance issues.”

The most critical needs lie within the city’s stormwater system, which handles runoff water from rain and melting snow. Runoff water travels over parking lots, roads, rooftops, driveways and other paved surfaces, often carrying pollutants and sediment with it into stormwater pipes, which empty directly into local rivers and lakes. According to OHM Advisors Senior Project Manager Greg Kacvinsky, the average age of Traverse City’s stormwater system is 55 years old – with its average life expectancy 50 years.

“Some (pipes) are 80 to 90 years old,” Kacvinsky told commissioners. “The reality is that (the system) is aging, and it’s going to need some help.”

Staff analyzed 60 percent of the city’s total stormwater system, identifying approximately 23 miles of pipe in need of rehabilitation. The city currently spends an estimated $300,000 to $400,000 annually out of its general fund for stormwater “emergency repairs and some basic maintenance, but that does not cover what we need to make sure that the system works for future generations,” Kacvinsky said. He identified a funding gap of $1.66 million annually, or – when combined with existing city spending – a total of $2 million needed each year to address both critical repairs and routine upkeep to prevent further degradation of the system.

“We would anticipate this would be a perpetual cost, because as you fix problems that are obvious now, others will pop up in the future as the system continues to age,” Kacvinsky said.

The SAW grant project also identified an estimated $5 million backlog in necessary wastewater system repairs, including manhole rehabilitation and pipe improvements. That system could require $750,000 to $1 million a year in perpetual funding to improve and maintain, according to project estimates. Though drinking and wastewater pipe repairs are covered by enterprise funds fed by city user fees – unlike stormwater pipes, which have no dedicated funding source – those fees may need to increase in the future to adequately fund improvements, Kacvinsky said.

As for funding stormwater improvements, “there is a need to have a dedicated funding source for stormwater,” Kacvinsky said. "It’s often the biggest utility (for cities) and sometimes the most expensive to repair or replace.” Staff and consultants’ joint presentation Monday recommended pursuing a stormwater user fee for the city – a rate that would be assessed against both residential and commercial properties based on their impervious surface square footage. Though legal in Michigan, the method by which such rates are established and implemented has proven to be a thorny issue for communities throughout the state, several of whom have faced – and lost – lawsuits over stormwater fee ordinances.

OHM Advisors noted House Bill 4100 – proposed legislation that would provide a clear path for communities to establish stormwater utilities in Michigan – could potentially get to a floor vote as soon as this summer. Absent such legislation, Traverse City could also consider pursuing a millage request or referendum on a stormwater fee ordinance.

Though the final SAW grant report won’t be ready until the end of May – with staff and commissioners likely to discuss budget ramifications and project priorities out of the report in the coming months and years – Commissioner Tim Werner noted the city had “huge opportunities to be creative as a community” in addressing the findings. “When it is time for a future city commission to go to the public and discuss a stormwater utility and why it makes sense to fund it at a level of two million a year,” said Werner, “it’ll be a lot easier sell to the general population if we say, ‘Based on status quo, we’re looking at two million a year, but…we’re going to try and get it down.”

Pointing to opportunities to implement green technology, low-impact stormwater systems and other improvements that would reduce demand on city systems, Werner added: “Two million shouldn’t scare everybody. Yes, it’s a big number, especially in perpetuity, but…there are a lot of creative ideas out there of how we can knock that number down significantly.”

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