Making room for more rain

As recent ice and windstorms attest, extreme weather – often accompanied by heavy precipitation – is consistent with trends and predictions for Michigan’s changing climate. And that makes stormwater management a rising challenge for many communities.

Stormwater is best managed by systems that first keep rainfall close to where it falls so it can recharge into the ground, then convey excess runoff elsewhere to protect water quality, public health, and safety. Too often, aging 20th century stormwater infrastructure isn’t up to the task. But upgrades are costly.

New and improved tools

This is where municipal stormwater utilities and changes to Michigan’s Clean Water State Revolving Fund (CWSRF) come in.

The CWSRF provides low-interest loans for municipal water pollution control projects, including eligible stormwater infrastructure projects.

Each year, Michigan identifies available financing and the list of fundable projects. The current fiscal year (FY) 2025 interest rate for stormwater-only projects is 0% for up to $5 million. The interest rate can change each year.

Applicants identified as overburdened or significantly overburdened may also be eligible for a portion of loan principal forgiveness.

However, many municipalities are unable to use the CWSRF for stormwater projects because their budgets do not include a repayment method. A stormwater utility could provide that.

A municipal stormwater utility is a funding structure that collects fees related to the control and treatment of stormwater and uses those fees to pay for local stormwater management – much like a sanitary sewer utility or drinking water utility.

Stormwater utilities are a norm around the nation, but Ann Arbor is currently Michigan’s only city with a traditional stormwater utility.

In November 2023, Michigan lawmakers introduced the Stormwater Management Utility Act (Senate Bill 660) to allow local governments to create stormwater utilities by meeting criteria – including a stormwater management plan and utility fee ordinance – that satisfy the definition of the utility as a fee and not a tax.

Changes to Michigan’s CWSRF legislation implemented in FY 2024 also increase resources for stormwater infrastructure by expanding eligibility for this funding. The CWSRF now can finance municipal construction of any device or system for treating, storing, recycling, or reclaiming stormwater that is separate from a sanitary sewer and provides a water quality benefit.

Stormwater projects now have their own scoring system separate from wastewater projects, and 5% of the total available funding for a given FY cycle is to be made available to stormwater projects.

Eligible projects include infrastructure such as green roofs, bioretention basins, bioswales, rain gardens, permeable pavement, and gray water systems.

Recent stormwater projects funded as part of the CWSRF have aimed to improve water quality by rehabilitating storm sewers and manholes, installing stormwater wetlands in municipal parks, and reducing stormwater runoff to nearby drains.

These projects can support both environmental and community benefits. For example, projects in Aaron Perry Park and Oakland Park in Pontiac include construction of two wetlands for stormwater treatment. These wetlands will reduce pollutant discharge and stormwater runoff using native vegetation and create community gathering spaces as part of a sustainable green stormwater management program to be maintained by the Oakland County Water Resources Commissioner.

Supporting best management practices for stormwater infiltration and installation of green infrastructure meets long-term state goals of supporting climate-resilient stormwater management.

Applying for funds

Municipalities considering CWSRF financing must submit an Intent to Apply by Nov. 1 of the year before submission of a project planning document. For more information and program contacts, visit Michigan.gov/SRF.

Adapted from an article in the 2025 Michigan State of the Great Lakes Report by Christe Alwin and Izabel Hartman of the Michigan Department of Environment, Great Lakes, and Energy.