Oakland Objects to Detroit's Revised Plan; Communities Seek to Join Negotiations

Two weeks ago in Bankruptcy Court, Oakland County officials filed a lengthy response to a revised plan for Detroit’s financial future, insofar as the plan pertains to the Detroit Water and Sewerage Department.  DWSD serves Oakland and several other counties, in addition to the City of Detroit itself.

The plan proposed by the city’s emergency manager includes diverting funds from DWSD’s ratepayer revenues to bolster the city’s general pension obligations to all city retirees.

As reported by Chrystal Proxmire on Oakland County One-Fifteen (“Oakland County Fights Detroit Water and Sewer Plan”),  Oakland’s objection concluded:

“...The financial condition of the DSWD remains questionable, at best, after the execution of the Plan.  The assumptions in the Plan regarding necessary capital improvements, increased operating revenues, decreased operating costs, reduced costs of debt service, and monies to be available to fund its capital improvement needs are overly optimistic, in some cases inaccurate, and fail to consider capital market conditions and realities.”

“...Notwithstanding its size and importance to the region, the DWSD has posted operating losses each year for the last seven (7) years, including, on average approximately $200 million a year loss for fiscal years ending 2009 – 2013, evidencing significant and recurring operational and/or fiscal mismanagement…”

“...Historically, the DWSD has a demonstrated pattern of ignoring and/or deferring much needed capital improvements. These capital improvements are needed to correct existing deficiencies and known problems. Failure to confront and resolve these infrastructure needs on a current basis dramatically increases the cost of future repairs.”

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In the meantime, three organizations representing nearly 30 communities, mostly in southern Oakland and western Wayne counties, have asked to be included in revitalized negotiations.

In an excellent, very thorough article in Crain’s Detroit Business on May 4, 2014 (“Drip by drip: Region’s water challenges”), Chad Halcom wrote:

“On Friday, the Southeastern Oakland County Water Authority [SOCWA], which makes wholesale water purchases from DWSD for Berkley, Beverly Hills, Birmingham, Southfield, Royal Oak, Pleasant Ridge, Lathrup Village, Huntington Woods and Southfield Township, brought a request to intervene in the bankruptcy and get authorization to participate in the mediation process. The separate Western Townships Utility Authority [WTUA] of Canton, Northville and Plymouth townships also supports that request.”

The third community organization, Conference of Western Wayne (CWW), consists of Belleville, Canton Twp., Dearborn, Dearborn Heights, Garden City, Huron Twp., Inkster, Livonia, Northville, Northville Twp., Plymouth, Plymouth Twp., Redford Twp., Romulus, Sumpter Twp., Van Buren Twp., Wayne and Westland.

How NOT to Plan a New Suburban Water System

Distrustful of Detroit’s intentions toward its wholesale customers in the suburbs concerning future water services, Oakland and Macomb counties are considering building their own freshwater intake, treatment and distribution system.

Steps have been taken to study the feasibility of creating a new regional authority that would draw water from Lake St. Clair, treat it and pipe it westward across the two counties.

A similar plan in Chicago’s southern suburbs is a cautionary tale.

In 2011, seven small Chicago suburbs (Alsip, Blue Island, Calumet Park, Harvey, Markham, Midlothian and Robbins), dissatisfied with the rapidly increasing cost of Chicago water, formed an agency to study and plan their own water system.

The South Suburban Joint Action Water Agency borrowed $5.6 million in 2012 to determine feasibility and plan for construction, which was expected to cost $300 million and take three years.

To date, the agency is thought to have spent all but $1 million, and they haven’t even determined the intake site yet.

Major portions of the spending thus far have gone in no-bid contracts to cronies and/or political campaign contributors of the municipal officials running the agency.

Most of the small towns involved are deeply in debt to Chicago for past water consumption.  The $5.6 million meant to finance planning is expected to double by the time the bonds mature.  These are not terribly prosperous communities, but their taxpayers and ratepayers will have to take the hit as the result of the careless, reckless or corrupt spending of community leaders.

Obviously, the circumstances in Detroit’s northern suburbs are significantly different.  The caliber of governance is higher.  The communities are more numerous and many of them enjoy fiscal health. Nevertheless, transparency in contracting and spending should be a high priority as studies about a new water system progress.

DWSD and its NPDES Permit

The National Pollution Discharge Elimination System (NPDES) Permit

A century ago, it was common for communities, industrial facilities, mines and farms to dump waste into the nearest waterway without regard to people or other living things downstream.  As populations and commercial activities grew, toxins and pathogens like bacteria and viruses in the waste began taking a toll in human health and the environment.

The self-interest of polluters clashed with the public’s interest in clean water, leading to governmental intervention, including the requirement of wastewater treatment.

The Detroit Water & Sewerage Department (DWSD) processes wastewater for nearly 4 million people in more than 70 communities over an area of 900 square miles.

A major wastewater treatment plant like Detroit’s is responsible for (1) managing combined sewer overflows, (2) controlling pathogens and toxins, (3) removing and disposing of suspended solids, including nutrients like phosphorus, and (4) supervising industrial pretreatment, which takes place at individual industrial plants.

All of these functions are mandated by state and federal laws, primarily the federal Clean Water Act (CWA) and the Michigan Natural Resources and Environmental Protection Act (NREPA).  These laws are supplemented with rules developed by various governmental agencies.

Fundamental to the regulation of pollutants in the nation’s surface waters is the National Pollution Discharge Elimination System (NPDES) permit.

Any facility or “point source” of surface water pollution must obtain an NPDES permit, which limits pollution by providing for progressive reductions over time.

In Michigan, the permits are issued by the Department of Environmental Quality (DEQ) on behalf of the U.S. Environmental Protection Agency (EPA).

To understand the permit, it’s important to learn what the terms and acronyms mean.  Like all technical subjects, this one has a language of its own, made up in part of chemistry, biology and engineering.

Each permit begins with a cover page describing the regulated facility and establishing the starting date of the five year period for which the permit applies.  Next is Part I, which contains provisions for the specific facility and its receiving waters.  Part II sets out general provisions that apply to all such facilities and their receiving waters.

We’re fortunate in Michigan to have available an excellent handbook on the subject, A Citizen’s Guide to Water Quality Permitting.  Written by Ellen J. Kohler and published by the Tip of the Mitt Watershed Council, the booklet can be downloaded at:

http://www.watershedcouncil.org/resources%20and%20publications/files/NPDES_eBook.pdf

The importance of public participation in the regulatory process can’t be emphasized too much.  Citizens can take part individually or in groups.  To be effective in promoting good water quality, it’s helpful if the participant learns as much as possible about the different types of wastewater treatment, the economics involved, the regulatory process and political considerations.

Kohler’s handbook should be on the reading list of everyone who cares about clean water. Please pass along this important reference to your friends and colleagues.

Improve Transparency at DWSD

There are themes expressed in this blog concerning reform at DWSD that bear repeating.  One of those is transparency.  City political leaders and DWSD managers have resisted transparency for 50 years.  Some of those leaders and managers just don’t think the public has a right to know what they’re doing.  

Others fear the consequences of having their incompetence and/or corruption seen by the public, consequences like being sacked or sent to prison.

The most advanced technology for accountability in large municipal operations like DWSD is the Checkbook NYC 2.0 system developed in New York under former comptroller John Liu.

I wrote on February 2, 2014, “Checkbook 2.0 is a readily adaptable accounting system in which an institution’s financial transactions are disclosed on a public website as they happen.”

“Checkbook 2.0 vacuums up, correlates and displays an institution’s revenues, expenses, budgets, payroll, projects, contracts, subcontracts and such.”

The principle is that every nickel received and every nickel spent by a city or agency can be seen on a public website updated several times a week.

“Checkbook runs in a standard LAMP-stack environment: Apache HTTPD and Apache Solr, MySQL and PostgreSQL. Checkbook is built on top of Drupal, but you do not need to install Drupal first, as Checkbook's own source code includes the appropriate version of Drupal.”

“Checkbook NYC's installation and data management procedures were originally designed around the needs of New York City. Our goal is to make Checkbook portable to other jurisdictions; the installation and data import procedures are probably the areas that most need improvement to achieve that goal. (The code itself is production-ready, as New York City runs a live instance.) We welcome early-adopter feedback to help make these improvements.”

https://github.com/NYCComptroller/Checkbook

“Currently, 17 of America’s 30 most populous cities provide online databases of government expenditures with ‘checkbook-level’ detail.” http://www.calpirg.org/sites/pirg/files/reports/CALPIRG_Transparency_in_City_Spending_v6_print.pdf

CALPIRG Education Fund gives Chicago a rating for transparency equal to New York’s.  Detroit ranks fourth from the bottom.

If the City of Detroit won’t import Checkbook 2.0, DWSD should do so independently and soon.