Why Not a Regional Water System?

The current system needs infrastructure upgrades which are likely to be very expensive.

There have been a flurry of recent articles about Oakland and Macomb counties refusing to sign on to emergency manager Kevyn Orr’s plan for a regional water authority. Oakland County Executive L. Brooks Patterson has been quoted as saying no deal is better than a bad deal and how can one disagree with that?  However, a regional authority is clearly the right move and every single one of the players at the table should know it. It was the right move for the Detroit Zoo, Cobo Center, the DIA, and now for the water and sewer systems that we all use in southeast Michigan.

What’s infuriating is that we all know this, but it seems less than clear that such a system will be implemented. The current system needs infrastructure upgrades which are likely to be very expensive. These costs need to be paid so that wastewater can be treated and safe drinking water provided.

The current Detroit Water and Sewerage Department also has legacy costs relating to its employees. Orr’s plans (the public hasn’t seen them yet) reportedly have the region paying more for service to fund operations and upgrades and paying to lease the system — as if the system was some sort of corporate asset. This seems a bit peculiar when you consider that the system is undercapitalized, under siege from newly forming competition and barely able to stay in compliance with its permits and various legal requirements.

If the system needs a reported $2-$4 billion in upgrades, it’s no longer an asset and is going to need every penny it collects just to operate. It will not be a cash source for Detroit and I am not certain that it should be. The city’s initial investments are long sunk and its failure to keep the system up for the last 40 plus years means that its value as an asset is minimal.

Oakland and Macomb want more information and I can’t blame them; but, given what we know about the recent history of Detroit, I wonder if that information exists. If the city isn’t providing it, I suspect the bankruptcy court would be willing to help shake that information loose if it exists.

As for the legacy employee costs, I wonder if Detroit can pursue the same strategy that General Motors used and create a Voluntary Employees’ Beneficiary Association (VEBA) of some sort to fund employee benefits.

The time to establish a regional water authority is now. Will it happen? As I have said before, both the economic and environmental health of this region depend on clean water and our water-rich position (unique to Detroit except for Chicago, Milwaukee and Toronto) make it imperative that we get this right and soon.