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.”

***   ***   ***   

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.