Bankruptcy

The Suburban Conundrum: How To Regionalize Bankrupt Detroit's Water System

February 12, 2014, 9:23 AM

Elected legislators from Wayne, Oakland and Macomb counties and other county leaders gathered Tuesday night in Pontiac to sort out a daunting problem: how to refinance and regionalize Detroit’s massive and troubled water system. 

As Bill Laitner notes in the Free Press:

"The system is billions of dollars in debt, riddled with a history of corruption and incompetence, and saddled with antiquated infrastructure that is falling apart with major water-main breaks occurring almost daily in Detroit."

“There’s no doubt — this is the biggest thing that will ever hit a commissioner’s desk,” David Flynn of Sterling Heights, chairman of the Macomb County Board of Commissioners, told Laitner.

One complaint was the suburbanites' belief that a deal proposed by Detroit, which owns the system, would mean suburban customers subsidize the growing portion of Detroit’s customers who can’t or won’t pay their bills.

The latest proposal from Detroit’s bankruptcy negotiators demands a $47-million annual payment for 40 years in return for putting suburban representatives on the board of a new authority that would operate the system, still to be owned by Detroit. But Detroit’ officials have been unable to provide audited financial statements of the system, a necessity before suburban communities and counties can make an informed decision, he said.

Regionalizing control of the water system is perhaps the biggest stake suburbanites have in Detroit's bankruptcy, and the issue is increasingly controversial.

In the comment section under the Free Press article, a reader whose screen name is John Grant writes:

The former "leaders" in Macomb, Oakland and suburban Wayne County didn't complain one bit when they were tapping into cheap Detroit water to build their suburban communities and grabbing the auto jobs out of the city. The Detroit Water Dept. helped them create white flight and gut the city by providing ready infrastructure and cheap quality water. Now that we have expensive federal regulations requiring that we clean the water before it goes back into the Great Lakes, the new leaders become cry babies to court political advantage in their suburbs. Please, stop exploiting Detroit and your own voter/residents, and build your own water systems. Let's see what your whiny suburban taxpayers are willing to pay.

Another reader, Chris Repke, writes:

So they say the suburbs can't leave the system because they have long term contracts. In my mind that just means they have plenty of time to build the necessary infrastructure to have their own. Oakland and Macomb need to start planning now to build their own, so that 10 or 30 yrs from now they can be independent. Because let's face it, Detroit is a corrupt cesspool now, and it still will be 30 years from now. We will still be having these ridiculous arguments about rates 30 years from now if we are still attached to that albatross. Better to bite the bullet, spend the money and achieve water independence so that at least the next generation won't have to deal with the same mess.


Read more:  Detroit Free Press


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