May 30, 2014 at 5:20 pm

Snyder ready to be 'positive force' in negotiations over Detroit water department

Michigan Gov. Rick Snyder said formation of a regional water authority may have to wait until after the city exits bankruptcy this fall — comments that echo the sentiments of Detroit Mayor Mike Duggan and other regional leaders. (John L. Russell / Special to Detroit News)

Mackinac Island— After remaining on the sidelines, Gov. Rick Snyder said Friday he would try to help broker a deal between Detroit and suburban leaders over future management of the Detroit Water and Sewerage Department.

The Republican governor also said formation of a regional water authority may have to wait until after the city exits bankruptcy this fall — comments that echo the sentiments of Detroit Mayor Mike Duggan and other regional leaders.

Snyder extended the olive branch at the end of the annual Mackinac Policy Conference, a three-day Grand Hotel gathering sponsored by the Detroit Regional Chamber that was overshadowed at times by a spat between the governor and Oakland County Executive L. Brooks Patterson and Macomb County Executive Mark Hackel over water department pensions.

Patterson wants the state Senate to attach a string to $195 million in city pension aid that would prohibit Detroit from extracting $428 million in accelerated pension payments from the Detroit Water and Sewerage Department during the next decade.

“I volunteered to say I’m happy to be a constructive party, a positive force in helping facilitate constructive discussions along with the mediators to work through issues on that after we got the grand bargain done,” Snyder told reporters Friday.

Despite his deep involvement in ushering Detroit into bankruptcy, Snyder has not been publicly vocal about the Detroit water department’s finances and governance until this week’s conference when he began combating Patterson’s talking points.

“It could be settled outside of the bankruptcy,” he said.

Snyder used the annual gathering of the state’s business and political leaders on Mackinac Island this week to try to diffuse Patterson’s demands and make a push for final legislative action on the so-called “grand bargain.” After an initial dust-up, Snyder said he and Patterson had a “constructive discussion” during a Thursday meeting.

Senate Majority Leader Randy Richardville, R-Monroe, said Friday he opposes Patterson’s proposal to add stipulations over the Detroit water department’s pension payments to the state’s contribution toward the bankruptcy settlement with retirees.

“It’s a delicate enough line that we’re walking to get this done the way it’s presented,” Richardville told The Detroit News. “The more we add to it, the more difficult it’s going to be.”

Richardville has scheduled a hearing Tuesday in Lansing on the House-passed 11-bill package tied to the $195 million in aid for Detroit pensioners.

The Senate leader and Snyder want the water authority and management issues separated from the $195 million in pension aid.

“I don’t think it should be a sticking point to getting the grand bargain done,” Snyder told reporters. “We should get the grand bargain done.”

Sen. Mike Kowall, R-White Lake Township, said Friday he is working on amendments to the Detroit bankruptcy bills that would add “safeguards” for DWSD ratepayers.

“I think the issue is being addressed,” Kowall told The News. “I think what Brooks and his people are wanting to do is approach everything all at once.”

Patterson and Hackel’s resistance to Orr’s proposal to form a regional water authority that would pay $47 million annual lease payments to the city caused Orr to pursue other ways of leveraging money from the system.

As one part of a plan to limit base cuts to pensions of non-uniform retirees to 4.5 percent, Orr’s debt-cutting relies on the Detroit water department paying off a 30-year pension debt by 2024.

Regional water authority talks were resumed in closed-door mediation sessions at the urging of U.S. Bankruptcy Judge Steven Rhodes.

But Duggan, Hackel and Patterson have pushed in recent weeks to remove those negotiations from the pressure of the bankruptcy proceedings, which are speeding along toward a late July trial over the city’s reorganization plan.

Snyder said Friday spinning off the water department from the city is no longer necessary for getting Rhodes’ approval of the city’s reorganization and debt-cutting plan.

“I’ve always been a supporter of a regional authority. My preference is it’s a dog year thing, I would rather get it done sooner than later,” said Snyder, referring to his fast-pace decision-making.

Richardville said a regional water authority could be formed legislatively outside of bankruptcy court.

“This will be something we will look at afterwards if they can’t come up with something themselves,” he said. “Let’s give them a chance to solve their own problems.”
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