Great Lakes Water Authority Represents Corporate Scheme to Steal Public Assets From Detroit
Steve Pardo and Christine Ferretti
The Detroit News
Detroit — Officials from Wayne and Oakland counties expressed confidence their commissioners will vote to approve membership in a new regional water authority, but one Macomb official declined to commit Thursday, saying the plan is being viewed with “suspicion.”
Representatives from the three counties and Detroit met with members of The Detroit News’ editorial board Thursday to discuss the Great Lakes Water Authority deal, announced Tuesday by Detroit Mayor Mike Duggan and county executives.
Under the deal, the city would retain ownership of the system while giving suburban customers more control over water issues outside of Detroit. The city would lease the system to the authority in exchange for $50 million a year, with the money going to help fix the aged system.
During Tuesday’s announcement, Macomb County Executive Mark Hackel joined regional officials in backing the deal, saying “we need to put down the swords.”
But Melissa Roy, the county’s deputy executive, stressed to The News on Thursday that the proposed agreement isn’t “the most ideal deal.”
“There’s a lot of suspicion because of some of the past deals,” she said. “We have built in a lot of safeguards into the new authority. But there’s a lot of suspicion, and there has been a lot of suspicion around the water department.”
The authority aims to maintain Detroit's ownership of the system while giving suburbs more of a stake in its operations. Rate increases will be capped at 4 percent over the next 10 years. Major decisions, such as rate increases, will require five of the six votes to be approved. Macomb officials would have preferred a unanimous vote for issues to pass, Roy said.
Under the proposal, the city will lease infrastructure to suburban communities in exchange for a 40-year, $50 million annual fee and an annual $4.5 million payment assistance fund. The money will be used for water system repairs and infrastructure improvements and will not go to city’s general fund. The $50 million would come from the bills of all customers — Detroit and suburban. About 45 percent of the money would come from water bills, with the rest from sewerage fees.
The Detroit City Council, or Emergency Manager Kevyn Orr, and at least one of the three counties must approve the authority by Oct. 10 for the authority to be created.
“It’s a great deal for the city of Detroit. It’s a deal that we think would be good, even if we weren’t in bankruptcy,” said Melvin “Butch” Hollowell, Detroit corporation counsel. “The fact is, we are in bankruptcy and so there is a choice between this and having a potential cramdown. The fact of the matter is, that this deal stands on its own as a great deal for the city.”
The water department will maintain 3,000 miles of sewer pipes and 3,400 miles of water mains within the city's boundaries. The authority will be responsible for the infrastructure in the communities outside Detroit.
Under the deal, the new water authority will still be required to make $428 million in pension payments to Detroit's General Retirement System over the next 10 years, to accelerate payments on those legacy costs, said Bill Nowling, spokesman for Orr.
spardo@detroitnews.com
(313) 222-2112
From The Detroit News: http://www.detroitnews.com/article/20140911/METRO08/309110098#ixzz3D3u0fPuE
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| Legal team filing class-action lawsuit to halt water shutoffs in Detroit. A newly-proposed Great Lakes Authority is designed to steal control of the water system from the majority African American city. (Photo: Abayomi Azikiwe) |
The Detroit News
Detroit — Officials from Wayne and Oakland counties expressed confidence their commissioners will vote to approve membership in a new regional water authority, but one Macomb official declined to commit Thursday, saying the plan is being viewed with “suspicion.”
Representatives from the three counties and Detroit met with members of The Detroit News’ editorial board Thursday to discuss the Great Lakes Water Authority deal, announced Tuesday by Detroit Mayor Mike Duggan and county executives.
Under the deal, the city would retain ownership of the system while giving suburban customers more control over water issues outside of Detroit. The city would lease the system to the authority in exchange for $50 million a year, with the money going to help fix the aged system.
During Tuesday’s announcement, Macomb County Executive Mark Hackel joined regional officials in backing the deal, saying “we need to put down the swords.”
But Melissa Roy, the county’s deputy executive, stressed to The News on Thursday that the proposed agreement isn’t “the most ideal deal.”
“There’s a lot of suspicion because of some of the past deals,” she said. “We have built in a lot of safeguards into the new authority. But there’s a lot of suspicion, and there has been a lot of suspicion around the water department.”
The authority aims to maintain Detroit's ownership of the system while giving suburbs more of a stake in its operations. Rate increases will be capped at 4 percent over the next 10 years. Major decisions, such as rate increases, will require five of the six votes to be approved. Macomb officials would have preferred a unanimous vote for issues to pass, Roy said.
Under the proposal, the city will lease infrastructure to suburban communities in exchange for a 40-year, $50 million annual fee and an annual $4.5 million payment assistance fund. The money will be used for water system repairs and infrastructure improvements and will not go to city’s general fund. The $50 million would come from the bills of all customers — Detroit and suburban. About 45 percent of the money would come from water bills, with the rest from sewerage fees.
The Detroit City Council, or Emergency Manager Kevyn Orr, and at least one of the three counties must approve the authority by Oct. 10 for the authority to be created.
“It’s a great deal for the city of Detroit. It’s a deal that we think would be good, even if we weren’t in bankruptcy,” said Melvin “Butch” Hollowell, Detroit corporation counsel. “The fact is, we are in bankruptcy and so there is a choice between this and having a potential cramdown. The fact of the matter is, that this deal stands on its own as a great deal for the city.”
The water department will maintain 3,000 miles of sewer pipes and 3,400 miles of water mains within the city's boundaries. The authority will be responsible for the infrastructure in the communities outside Detroit.
Under the deal, the new water authority will still be required to make $428 million in pension payments to Detroit's General Retirement System over the next 10 years, to accelerate payments on those legacy costs, said Bill Nowling, spokesman for Orr.
spardo@detroitnews.com
(313) 222-2112
From The Detroit News: http://www.detroitnews.com/article/20140911/METRO08/309110098#ixzz3D3u0fPuE
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