There's some pushback against Kevyn Orr's plan for Detroit's water department

Jun 17, 2013

Credit Kate Boicourt / IAN

Detroit’s emergency manager has a plan for the city’s water department—but not everybody likes it.

Kevyn Orr proposes leasing the system to a “Metropolitan Area Water and Sewer Authority” as it part of a larger restructuring of city operations.

The Authority’s Board of Commissioners would retain the same structure as the department’s current of Board of Water Commissioners. The city of Detroit has four representatives, while Wayne, Oakland, and Macomb Counties each have one.

But the Authority would also pay a to-be-determined sum to lease the department’s assets—a possible new revenue stream for the city.

State Representative Kurt Heise, a water resources expert and State Representative for some western Detroit suburbs, isn’t thrilled with parts of the plan.

Heise notes, and Orr’s plan acknowledges, that this is pretty much the same plan as one put forward earlier this year by a “root cause committee.” That committee was part of a longstanding lawsuit against Detroit Water and Sewerage for Clean Water Act violations (a federal judge has since dismissed the lawsuit).

“It’s sort of a status quo plan,” Heise says. “It provides more money for the city, but the customer really doesn’t get a lot in return. It’s more or less a money transfer, with the same [lack] of transparency and oversight and accountability.”

Heise has introduced bills to expand the Authority’s board, so that suburban communities would have more representation.

Other stakeholders are also skeptical of the plan, though for different reasons.

“We think that Detroit should reinvest all of its revenue into the water and sewer system,” says Tia Lebherz, with the group Food and Water Watch in Detroit. “We already have degrading infrastructure.”

Lebherz says the new Authority would make the system less democratically accountable, and believes it opens a “clear path to privatization”—something the group opposes for municipal water systems.

“This isn’t a silver bullet. This isn’t just unrestricted revenue that’s going to come in. We’re going to be paying off in the long term with increased rates and degraded service.”

Both Lebherz and Heise emphasize that Detroit’s water system, parts of which are nearly 200 years old, needs major reorganization and upgrades.

Orr’s plan suggests that spinning the water department off to an authority would allow it refinance its debt, and borrow more readily for capital improvements.

It also acknowledges that the plan is, at this point, little more than a suggestion: “Any transaction would be contingent upon the City and relevant third parties reaching agreement on many matters, including, but not limited to, governance, amounts to be paid to the City, and the form and terms and conditions of such transaction.”

Members of Orr’s team said Friday they’ve begun talks with Wayne, Oakland and Macomb counties about moving on the plan, but those talks are preliminary.