December 17, 2010 at 1:00 am

Suburbs to consider fight for water dept.

Indictments lead Patterson to meet with Hackel, Ficano

Patterson )

Detroit —Oakland County Executive L. Brooks Patterson and others are ramping up efforts to increase suburban oversight of the Detroit Water and Sewerage Department, following an indictment Wednesday alleging former Detroit Mayor Kwame Kilpatrick used the agency to dole out millions of dollars in contracts to a friend.

Patterson said Thursday he plans to meet with incoming Macomb County Executive-elect Mark Hackel and Wayne County Executive Robert Ficano. He'll gauge their support for going to the Legislature to push for regional governance of the system.

"The suburbs have the right to protect ourselves," Patterson said. "I think (Mayor) Dave (Bing) is not going to like what I have to say … but there ought to be a regional authority.

"You can't just say trust me. That's what Kwame said."

But any effort to loosen Detroit's grip on the system, which serves 4 million people in 126 communities, is sure to face stiff opposition in the city.

"I will fight that to my death," said Detroit City Council president Charles Pugh.

"We should not give up control of our water system. We have new leadership who can be trusted."

Ficano said he believes Bing can be trusted to run an "accountable, fair and transparent system" and any attempts to regionalize it are "unlikely."

Hackel said he's open to discussion of the regionalization of the water system but said Wednesday's charges "shouldn't be the catalyst."

The water system is overseen by a seven-member board, three of whom are suburban residents appointed by Detroit's mayor.

Over the last decade, suburban leaders have pushed for a larger role in the water system, in part because of ballooning water rates and cost overruns. Department officials said this week the utility expects to increase rates an overall 9.5 percent next year, according to preliminary numbers released this week. That was the same average rise last year.

Oakland County Water Resources Commissioner John McCulloch said he raised questions over the years about contracts to firms tied to Bobby Ferguson with U.S. District Judge John Feikens. The judge oversaw the system for decades and retired last month. His staff Thursday said the judge was at home recovering from a recent hospitalization and unavailable for comment.

Wednesday's indictment alleged that Kilpatrick pressured contractors to hire his friend, Ferguson, who received tens of millions of dollars in contracts and funneled at least $400,000 to the former mayor. The water department's former director, Victor Mercado, also was indicted on charges he steered contracts and helped rig bids to Ferguson.

In 2007, Feikens floated a plan that would have given the suburbs power to seat three members on the board and Detroit would have gotten paid $800 million over 20 years. Money would have come from annual savings from refinancing bond debt.

"Realistically, in order to truly regionalize this system, the surrounding communities would have to purchase the asset from the City of Detroit, which would have the potential of costing millions of dollars," Ficano said. "In these challenging times, it's highly unlikely that communities are able to sustain such a purchase."

Macomb County Public Works Commissioner Anthony Marrocco said the charges unsealed Wednesday are "the straw that broke the camel's back."

"We have really paid for that system," Marrocco said. "It's gotten out of control."

Bing issued a written statement saying he was "disappointed" by the allegations, but pledged he would "not be deterred from our agenda."

"We will continue to work hard to restructure city government to a level of accountability, transparency and performance for our citizens," Bing said.

"We will maintain our commitment to the highest ethical standards and those who uphold them for the benefit of our city and region."

Bing said the indictments "will make it more difficult" as the city seeks a permanent water director. Deputy Director Daryl Latimer is running the system.

State Rep. Bert Johnson, D-Detroit, said suburban leaders need to cool their rhetoric and it's unfair to use Wednesday's indictment as an argument for a takeover. Johnson said he's open to talking about improving the system but said he's "skeptical" of any takeover.

"Detroit built most of that water system," Johnson said.

McCulloch said a new governance could be modeled after the regional authority that took over management, but not total ownership, of Cobo Center.

"The stars have lined up," he said. "Enough is enough. We've got to fix the problem."