Regional water authority good first step

January 1, 2015

Just a year after a proposal to lease the Detroit Water and Sewerage Department (DWSD) infrastructure was labeled "dead on arrival" by Oakland County officials, the Great Lakes Water Authority (GLWA) last month held its first organizational meeting with representatives from Detroit, Wayne, Oakland and Macomb counties.

While Oakland County Deputy Executive and water authority board member Robert Daddow said there are still a number of issues to address before the authority is officially up and running this coming spring, we are pleased to see months of negotiations have finally created a regional water authority that provides fair representation for all ratepayers, and provides a means to address some of the largest problems in the aging water and sewerage system.

Daddow, who was appointed to the regional water board in October by Oakland County Executive L. Brooks Patterson, said initial proposals by former Detroit Emergency Manager Kevyn Orr and advisors with law firm Miller Buckfire were unsatisfactory. Specifically, the proposal would have had suburban communities pay about $9 billion into the system over 40 years, with no guarantee that money would stay in the system to pay for infrastructure and operations. Further, Oakland County officials stressed the importance of setting up a regional authority that would provide fair representation for each of the suburban communities paying into the system.

However, Daddow said Detroit Mayor Mike Duggan entered the discussion and agreed that money paid into the system should stay there and be used to support operations and infrastructure, rather than be used to provide added income to the city of Detroit's general fund. 

Of the some 4 million people who receive services from the (DWSD), about 1.22 million are in Oakland County, with another 1.2 million in Wayne and 850,000 in Macomb County. In total, suburban communities provide about 80 percent of the department's revenues, which total more than $750 million annually. Yet, suburban representation on the DWSD's current seven-member Water Board of Commissioners has been limited to three members since 1960.

Under the new authority, the GLWA will be operated by a six-member board, with three members representing the counties, two representatives from the city of Detroit, and one representative for areas served by the DWSD outside of Detroit and the three other counties, who will be appointed by the governor's office. The GLWA will lease the regional assets from the city for 40 years at the rate of $50 million per year. Under the agreement that allows the GLWA, all lease payments must stay within the system to fix the city's failing infrastructure. Detroit must use the $50 million annual lease payments only for capital improvements to the system and may not use them to support payments to its general fund. The agreement also requires the city of Detroit to be responsible for paying for its local system operating costs. Further, the agreement establishes a $4.5 million Water Resources Affordability Fund to assist those most in need throughout the entire GLWA area.

Although there are bound to be some wrangling among the new authority's members during the due diligence period, we are pleased to see 15 months of negotiations, including five months of federal court-ordered confidential mediation, result in an agreement that has been needed for nearly 40 years. And we feel confident that the players involved in the GLWA will continue to work together in the best interest of ratepayers and the structure that has allowed the metro Detroit region to grow and flourish as a region since the late 1950s.

It's an excellent start that is long overdue.

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