Officials, including Robert Daddow, left, Gerald Poisson and Jim Nash discuss lingering questions on the regional water proposal. (Bryan Mitchell / Special to The Detroit News)
Pontiac— Suburban leaders say they’re far from agreeing on joining a regional authority that would run Detroit’s Water and Sewerage Department, despite pressure to reach a deal to facilitate the city’s bankruptcy restructuring.
Top aides to Oakland County Executive L. Brooks Patterson made their position clear during a meeting Tuesday night with officials from Macomb and Wayne counties to discuss the proposed authority. Their concerns include forcing suburban customers to bear the brunt of future costs associated with the water and sewer system.
Oakland County doesn’t feel it has to make a quick deal with Detroit, deputy executive Gerald Poisson said.
“They certainly have timelines imposed by the court but we have repeatedly informed them their timelines aren’t ours,” said Poisson. “We are on the hunt for a mutually beneficial agreement.”
Oakland County hosted the study session, which featured testimony from Water Resources Commissioner Jim Nash and Deputy County Executive Robert Daddow. Macomb County commissioners David Flynn and Jim Carabelli and Wayne County Commissioner Shannon Price also attended.
“There’s no really good alternative. It’s really picking the best bad plan,” said Price. “We’re all trying to come up with something."
The preliminary water plan calls for the suburbs to pay $1.88 billion to lease the Detroit Water and Sewerage Department,split into $47 million per year over 40 years. Orr has been working with the department and suburban officials for the creation of a regional authority.
The yearly sum is a crucial component in Orr’s plans to secure a funding source for the bankrupt city and help erase Detroit’s $18 billion debt.
Daddow said he has “horrendously troubling” concerns about the finances of Detroit Water and Sewerage, saying the most recent financial statements the county has been given are from June 2012.
Daddow said Oakland County has been demanding additional financial records from Detroit, including the water department’s audited financial statement for 2013; the interim financial statement since the city filed for bankruptcy; details of labor contracts; lawsuits the department faces; planned capital improvements; and an explanation of how the city estimates it can generate $47 million annually on the deal while keeping ownership of the system.
“The balance sheet is in an atrocious state,” said Daddow. “They don’t have a lot of cash, and for an operation that runs a billion-dollar business, cash is important.”
Should the deal go through, the counties would all be represented on the board, with two members each from Wayne, Oakland and Macomb counties, two city appointees and one appointed by Gov. Rick Snyder.
Flynn, chairman of the Macomb County Board of Commissioners, stressed doing what’s best for residents.
“People aren’t going to be happy because they aren’t going to realize that water rates will go up under any scenario, whether we accept this deal or not,” said Flynn. “At least we can get some control over the process.”