Intense negotiations regarding the future of Detroit’s Water and Sewerage Departmentcontinued behind closed doors in federal court Tuesday.
Detroit emergency manager Kevyn Orr is pushing hard for a deal that would largely transfer control of the water department to a regional water authority.
But Orr also wants suburban customers to pay Detroit for using department facilities. His first offer was reportedly $9 billion over 40 years; it was soundly rejected by suburban officials.
Another major stumbling block: Who should foot the bill for urgently needed upgrades to one of the country’s oldest water systems. But it’s a bill that likely runs into the hundreds of millions of dollars.
The two sides are talking in mediation as Detroit’s bankruptcy case moves forward. Orr wants a deal done fast, because the water department is a key city asset – and dealing with it will be a big part of city’s “plan of adjustment.”
Orr had previously said he wanted to present that plan to the court this month. But suburban officials are rankled by the aggressive pace of the negotiations.
Macomb County Executive Mark Hackel said last week that he understands why Orr wants a quick deal – but the process might just be too complicated to deal with in such a short time.
“There’s this rush to come to an agreement as a regional authority,” Hackel said. “It isn’t going to be happening overnight. We need more time to really assess what are the problems with that system before Macomb County says, ‘We’re all in.’”
Oakland County Executive L. Brooks Patterson also complained about Orr’s approach to the negotiations, and said last week the two sides are “nowhere near a deal.”
But Patterson said regardless of how the situation works out, one thing is for sure: Water rates are headed up and Metro Detroit’s water system is the “only game in town.”
“We’re caught in a monopolistic system,” Patterson said. “We can’t go anyplace else for the water or for the sewers. And so we have to pay the freight, even though it’s not our bill.”
The Detroit Board of Water Commissioners, which hasn’t been involved in the mediation process, also met with Orr’s staff behind closed doors Tuesday.
Individual communities in southeast Michigan are set to learn what their water rates will be starting in mid-2014 later this week.
