The suburbs and city are finalizing a deal to turn over ownership and operation of the Detroit Water and Sewerage Department to a regional authority, Nolan Finley reports in the Detroit News.
Final details are being worked out and the deal could be done in as soon as two weeks.
The deal has been hung up for months over suburban concerns that Detroit’s demand for an annual premium to bolster its general fund would send water rates soaring. That revenue is key to resolving the city’s bankruptcy case, which is scheduled to go to trial Aug. 29.
The suburbs also were concerned about taking on legacy costs and absorbing Detroit’s high rate of unpaid water bills. The city recently triggered a national outcry when it began shutting off service to delinquent customers; the cut-offs are currently paused.
Finley reports a six-member board would run the authority, and in exchange for acquisition of the water system and its assets, the authority would pay the city $50 million a year for 40 years. That premium was the major sticking point of the talks.
Key to the deal is a commitment by the state to help lower borrowing costs for the system.
