Flint mayor-elect wants to explore ways to end Detroit water contract

Beth LeBlanc
The Detroit News

Lansing — Flint Mayor-elect Sheldon Neeley will explore ways to break off from the Detroit area water system and connect instead to the Karegnondi Water Authority.

During an interview on WKAR's "Off The Record" Friday, Neeley also said he planned to fire Flint Police Chief Tim Johnson upon taking office Monday. But Flint Mayor Karen Weaver's office said Neeley was "a day late and a dollar short"; Johnson resigned Friday morning.

Sheldon Neeley

Neeley, who still consumes filtered or bottled water in Flint, said he plans to explore ways to lower water costs, including connecting with the Karegnondi system, with a “tenacity never seen by any other politician in the state of Michigan.”

"We don’t have control of our own destiny," he later added.

Neeley, a Democratic state legislator and former Flint City Council member who ousted Weaver in Tuesday’s election, would not rule out bankruptcy for the financially strapped city during the Friday interview. He has planned to have a financial audit done of the city's finances.

“Everything’s on the table,” said Neeley, but he noted there were several other potential alternatives, including philanthropic help, before the city considers bankruptcy.

“I have to take a look at it,” Neeley said. “Definitely, the city was deconstructed through emergency management, a lot of assets were lost. We’re still trying to make an assessment of what’s left there.”

Weaver on Friday defended staying with the Great Lakes Water Authority for the city's drinking water.  

"The cost of KWA water is at a higher rate than the GLWA rate," the current mayor said in a statement.

"According to the EPA order, 'any change in source water or treatment has the potential to cause corrosion and leaching if the water system and the primacy agency have not appropriately planned for the change.' Any transition to another source of drinking water would need to be tested and proved for the health, safety and welfare of the residents."  

A Great Lakes Water Authority spokeswoman declined comment on Neeley's intentions. 

Flint's 30-year contract

Flint has been getting its treated water from the Great Lakes Water Authority since October 2015. The city signed a 30-year agreement with the Detroit area water system in November 2017 after a federal judge ordered officials to make a decision about its permanent water source. When the Flint City Council didn't propose a viable alternative, the Judge David Lawson paved the way for the Detroit area water contract to be signed. 

At the time of the order, the state's environmental director said a contract with Karegnondi would require about $59 million to $68 million in repairs and updates to the inactive Flint Water Plant that would take about three and a half years to complete.

"Flint does not have the technical, financial, and managerial capacity available to ensure that use of any other water source will adequately protect the public health," according to the state's lawsuit that led to the judge's order.

KWA, state government, the U.S. Environmental Protection Agency and Weaver had backed the Great Lakes Water Authority contract, which uses KWA as a backup system for the Detroit area system. 

Before the water crisis, Flint had an interest in 30% of KWA’s capacity and was responsible for 30% of the cost. The city still maintains its ownership interest subject to its contracts with the state, the Great Lakes Water Authority, Genesee County and the Karegnondi authority, said Kevin Sylvester, a spokesman for Genesee County Drain Commissioner and Karegnondi authority CEO Jeff Wright.

"Flint has the ability to purchase raw KWA water for treatment or raw water use under its KWA contract," Sylvester said.  

The city opted for “rentership” instead of “ownership” when it chose to contract with the Detroit system, said Neeley, who voted to join KWA while on city council in 2013. As a result, Flint is the only city of the 32 units of government in Genesee County that remains on the Detroit area water system.

“The residents of the city of Flint did purchase a part of that (Karegnondi) system, and then the current administration forfeited all of our equity into that system,” he said. “The deal was jaded to say the least.”

Flint initially had ownership in the Karegnondi Water Authority and switched from the Detroit Water System to the Flint River on April 25, 2014, while awaiting the completion of the Karegnondi water line from Lake Huron.

Residents started complaining about the smell, color and taste of the water soon after. The effects were treated without the proper corrosion control chemicals, which eventually damaged the pipelines and leached lead into the drinking water supply.

Flint has been replacing lead and galvanized steel water service lines with $100 million in federal aid. The Weaver administration had anticipated completing its replacement of all water service lines by the end of this year.

Neeley: Keep quality, lower cost

The series of events reflected the two-pronged issue facing Flint at the time: water quality and water cost, Neeley said. Changing the delivery system for that water could lower cost while preserving quality, he said.

“The infrastructure is what was defective in this whole process ...,” Neeley said. “As we go forth to replace infrastructure in our community changing the source which is coming from the same place with just a different delivery system, a newer delivery system, doesn’t change quite the quality of it.”

The Karegnondi Water Authority currently supplies raw water to the Genesee County Drain Commissioner's Water and Waste Services department at $4 per 1,000 cubic feet, Sylvester said. The water is then treated and distributed to various Genesee County communities. 

The Great Lakes Water Authority couldn't provide a similar breakdown, noting the final rate is set by the city of Flint and the authority's charges are customized to the needs of each community. But the authority limited its wholesale water service increase to 1.8% on July 1, below the 4% annual cap in its 30-year contract, said authority spokeswoman Ashleigh Chatel.

Under the agreement, Flint's Great Lakes authority charges are cut by the amount of money the city pays in debt service on the KWA bonds, which amounts to about $7 million annually, Chatel said.

In March 2018, the then-lead investigator into Flint's water crisis said his team was looking into the motivation behind the decision to switch the city from the Detroit area water system to the Karegnondi Water Authority. 

"Without getting too far into depth, we believe there was significant financial fraud that drove this," investigator Andy Arena said during a 2018 Senate committee hearing. 

At that time, the investigation had led to criminal charges against 15 local and state officials. Some of those officials reached plea deals with former Attorney General Bill Schuette, but the remaining charges were dropped earlier this year when Attorney General Dana Nessel's office hit restart on the investigation.

Neeley said Johnson, the city's current chief, is a "good friend" but the city is in need of a "new direction" that would coordinate efforts with other policing agencies. He said he has a few candidates in mind for Johnson's replacement. 

"Flint is a community in crisis, it's in triage," said Neeley, noting the difficulty of finding a successful candidate willing to take on the challenge for what would likely be less pay.

Flint is need of more than "just patrol and arrest," Neeley said. "We need detectives to be able to get those criminals who are habitual criminals off the streets."