County execs wary of water plan
Detroit — County executives expressed concerns Tuesday over whether Detroit is pulling its weight in a new regional water authority, saying numbers initially presented by the city don’t appear to be “real.”
The issue arose during the annual “Big Four” luncheon sponsored by the Detroit Economic Club at the North American International Auto Show. The panel included Detroit Mayor Mike Duggan, Macomb County Executive Mark Hackel, Oakland County Executive L. Brooks Patterson and Wayne County Executive Warren Evans, who took office earlier this month.
“You only have a deal if everyone does their part of the bargain,” Patterson said. “Right now, there is no guarantee they are going to continue paying the bills and (Detroit) is having a challenge getting their part of the money.”
The Great Lakes Water Authority, announced in September amid negotiations over Detroit’s bankruptcy, has the Detroit Water and Sewerage Department providing maintenance and service in the city and the authority handling responsibilities for about 3 million suburban customers.
Under the agreement, Detroit will retain ownership of the area’s water and sewage system, but the suburbs agreed to a 40-year, $50 million annual lease that gives them a bigger stake in operations.
But, the county executives said, the numbers that were presented to them when the counties were offered a seat on the authority don’t matchwhat they are seeing now.
They were not specific about which financial details had them concerned. But Bob Daddow, Oakland’s deputy county executive who sits on the water authority board, told The News after the event that the city still has not provided crucial financial information. The counties are concerned that rate increases they agreed to for 2016 are not going to generate enough revenue to offset water department losses from last year alone, Daddow said.
“I was always worried about the Great Lakes Water Authority — it was hammered out in a judge’s chamber and it was very fragile to begin with,” Patterson said after the event. “The slightest blip can cause it to fail. Right now, we’re seeing a blip.”
Hackel, too, had his concerns.
“We voted to have a member on the regional authority not because we thought it was the best thing to do,” Hackel said after the panel discussion. “It’s so (the counties) could see the numbers.”
And now that Macomb has access to the books?
“Right now it’s very concerning to us,” said Hackel. “It doesn’t look like the numbers they gave us (during negotiations) are real.”
Contacted by The News after the panel discussion, Detroit’s Chief Operating Officer Gary Brown, who serves as a board member for the water authority, said he’s “disappointed” by the county executives’ statements.
“We were open and transparent,” Brown said. “We shared all of our financial data with them. All parties have signed off on it. Now, to come forward with this allegation is extremely disappointing and it’s the reason we need a federal judge to resolve these types of issues.”
There are six members on the authority: two from Detroit, one each from Macomb, Wayne and Oakland, and an appointee by Snyder.
Evans and Duggan did not stay to answer questions after the panel discussion. During the event, however, Duggan did say Detroit has done a better job managing the water system for the city and dealing with water main breaks.
Evans said the authority needs to be put on “stable financial footing we can all be comfortable with.”
Sales tax concerns
Meanwhile, all four leaders expressed concerns about the state’s projected deficit and plans to ask voters to raise the sales tax, hours before Gov. Rick Snyder is to deliver his State of the State address.
“How do I say no or argue against this when it’s going to bring $27 million a year to Macomb County to fix our roads?” Hackel said of the proposed plan to raise the sales tax to 7 percent. “But listening to the voters, I am hearing a lot agitation.”
Duggan said by passing on the plan to raise the gas tax, the Michigan Legislature lost a major opportunity.
“If they had just put 12 cents on the gas tax to fix the roads, I think the people of the state would have supported it,” he said. “I think a sales tax is a lot more complicated but I am going to support it because it’s the best option we have in front of us.”
Other topics addressed included the difficulty of funding regional mass transit, the importance of attracting and retaining young talent, and the challenges with overcrowded jails in the region.
For his part, Evans said it isn’t likely that Wayne County will have enough money to finish the jail project, which has already had $130 million put into it and needs another couple hundred million to finish.
“The reality is I can’t see how I’m going to pay the bills next week,” Evans said of the county’s dire financial situation. “If someone were to come along to offer money for the jail I would listen, but I don’t see anyone coming along offering that kind of money.”
Evans said he is about a week away from releasing information about the county’s debt, saying it’s much worse than he anticipated. One of the biggest parts of that, he said, is unfunded pensions worth at least three quarters of a billion dollars.
“Everything is on the table in terms of where we cut, what we do,” he said. “All the options for getting out of it are on the table, because I don’t know how deep the hole is yet.”
Limited talk of future campaigns
The discussion Tuesday wasn’t entirely serious. Patterson, who is known for his wry sense of humor, was asked to give advice to Evans, now that he is county executive.
“Ask for a recount,” Patterson said.
“Don’t sit next to Brooks Patterson,” Hackel pitched in.
Patterson wouldn’t confirm that he’ll seek another four-year term as county executive. Duggan and Hackel also wouldn’t confirm intentions to run for governor. But they did briefly talk about endorsements for presidential candidates.
“I’m not in the habit of endorsing someone before they’ve announced they are running,” Duggan said in response to assumptions that, as a Democrat, he’d back Hillary Clinton.
Patterson, who backed Mitt Romney in the last election, was a bit more outspoken.
“I have a theory: if you can’t do it, and Obama was pretty weak, I don’t know how you come back a second time,” he said. “I’m not saying (Jeb) Bush is going to do it. He’s cursed by his last name.”
Added Hackel, “And I’m going to wait to see what Brooks does and do the exact opposite.”