Equivalent Residential Unit
Storm Water Runoff Fee Methodology Overview
Overview
• Here we are again
• Changing legal landscape
• New method of collecting storm water treatment fees
Add flat fee to utility bills
Lower water usage rate
• No increase or decrease in amount collected by City
Residents save $23 on average
Actual cost decrease/increase depends on water usage
Basics
• City operates combined sewer system
Sanitary & storm runoff flow through same pipes
• City pays:
DWSD for dry-day sanitary sewage treatment ($225k)
Oakland County for wet-weather GWK CSO treatment
($335k)
Dry Day Flow
• Wastewater flows to
Detroit sewage
treatment plant
Wet Day Flow
• Mixed rain/sanitary
sewage flows to
George W. Kuhn
combined sewer
overflow facility
• Treated before
discharged to
waterways
Basics
• Sewage treatment costs recovered through water &
sewer usage rate
Common methodology used by vast majority of Cities
• Class action lawsuits brought against Ferndale,
Birmingham, Royal Oak, and Oak Park
• At issue: inclusion of storm water runoff charges to
operate GWK facility in water usage rate
Legal Landscape
• Results:
Ferndale settled for $4.5 million
Birmingham settled for $2.85 million
Royal Oak prevailed on Charter language
Oak Park – most recent case, ongoing
Basis for Class Action Suits
• Bolt v. Lansing
Fee vs. tax
• Three part test
User fee must serve regulatory purpose
User fee must be proportionate to cost of service
Must be voluntary
Settlement Impacts
• Ferndale continuing rate-based storm water charge
plus property tax millage
• Birmingham moving to Equivalent Residential Unit
model
Berkley has used ERU model for 15 years
Madison Heights also switching to ERU model this year
Proposed Action
• Switch to Equivalent Residential Unit (ERU) billing
method for storm water costs
• Reduce water and sewer usage rate by about 30%
• No net change in total water & sewer fund revenue,
only in how the storm water costs are apportioned
to system users
• Proportional assessment of storm water runoff
costs
ERU Methodology
• Determine total storm water runoff factor city-wide
• Establish proportional ERU values for each property
• Assess costs based on ERU value
Runoff Factor
• Determined by amount of pervious and impervious
surface on each parcel
90% of impervious + 15% of pervious = runoff area
• GIS analysis for each parcel using aerial
photography used to determine runoff area
calculations
Results
• 1,124 single family residential water customers
Average runoff area = 3,609 sq. ft.
3,609 sq. ft. = 1 ERU
• Nonresidential parcels
482,148 sq. ft. total runoff area
Divided by 3,609 = 133.6 total nonresidential ERUs
• Total system-wide ERUs = 1,124 + 133.6 = 1257.6
Residential ERUs
• ERU value determined by neighborhood groups
Minimizes variance
Neighborhood averages mitigate need to account for
exact changes at the parcel-level in real-time
• Zoning districts and by street were also tested
Assessor’s neighborhoods had smallest standard
deviation within groupings
0.70
1.05
0.70
1.08
0.78
1.17
0.76
1.92
2.32
1.20
0.79
Cost Per ERU
• City’s total FY15-16 storm water treatment cost =
$335,000
• $335,000/1257.6 = $266.85 cost per ERU
• ERU cost offset by lower water usage rate
• Final ERU cost in FY16-17 will depend on how much
Oakland County charges us for storm water runoff
treatment
Will almost certainly be higher than $335,000
Impacts on Residents
• Reduction in water usage rate of about 30%
• Average annual savings of $23 per residential
customer based on usage averages
• Actual cost impact will depend on parcel
characteristics and water use
Impacts on Non-Residential
Properties
• Reduction in water usage rate of about 30%
• Average annual increase of $975
• Cost increase will depend on parcel characteristics
and water use