Thursday, March 13, 2014

New Wrinkle in Water Talks; EM Orr's Alternate Plan; Gov's Re-election Bid

Crain’s Detroit reports a new wrinkle in city/suburban water talks.  Chad Halcom wrote on March 9, 2014:

“Suburban businesses and residents could have to pay $60 million or more per year into the coffers that pay retired Detroit employees if their elected leaders cannot agree on the creation of a new regional authority…”

“The money apparently would pay the annual contributions of all city workers in the General Retirement System over the next 10 years, not just DWSD's own employees.”

“...another section of [the plan] authorizes Detroit to ‘begin planning a rate stability program for city residents’ in the system, which can in turn ‘provide for affordability of retail rates to be taken into account in the development of wholesale rates…’ ”

“In other words, regional leaders said, a post-bankruptcy DWSD would add nearly $67.5 million per year to its expenses, with little or no ability to raise capital for it in the bond markets and no significant new revenue coming from city retail customers. That really leaves only one other revenue stream.”

Halcom's article doesn’t raise the question, how much of this plan has Governor Snyder’s stamp of approval?  Are Emergency Manager Orr and the governor on the same page concerning these proposals?  

Presumably, in his re-election bid, the governor plans to raise a lot more campaign money and garner a lot more votes in the suburbs than in the City of Detroit.  Is EM Orr really going to torpedo the governor’s re-election plans?

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