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Officials: Flint will remain with KWA

Jim Lynch, Jacob Carah and Jonathan Oosting
The Detroit News
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Flint — Flint Mayor Karen Weaver and Gov. Rick Snyder announced Tuesday an agreement that will allow the city to move forward with a plan to join the new Karegnondi Water Authority.

That decision has been in limbo since Weaver took office in November. She had previously declined to sign off on the deal to move to the new regional drinking water authority, saying it was a questionable deal for Flint that was reached without adequate local input.

A decision to join KWA in early 2013 and, subsequently, end Flint’s relationship with long-time provider the Detroit Water and Sewerage Department, was made while the city was under the control of a series of Snyder-appointed emergency financial managers.

“We're going to move forward with KWA but we had to have some changes,” Weaver said Tuesday.

Those changes include:

■Genesee County will pay pre-construction engineering work for a three-mile section of pipeline that will be built to test Flint’s ability to treat the KWA water coming in from Lake Huron. Federal regulators have required the new KWA system to build the three miles of test pipeline parallel to the KWA system.

■A “cost-sharing and financial agreement” with the state.

■Increased local representation for Flint on the KWA governing board.

Snyder was on-hand for the announcement as well, touting $4.2 million in grant funding that will be made available for the three-mile pipeline project.

According to Snyder, the approximate cost estimate for the construction of the pipeline is $7 million.

And his office will work with the city for “positive financial arraignments so it doesn’t create any near-term issues for the city,” Snyder said.

Jeff Wright, KWA’s chief executive officer and the Genesee County Drain Commissioner, confirmed there have been discussions on changing the makeup of the water authority’s board, but no decisions have been made. He said there are official steps that need to be taken to re-open KWA’s articles of incorporation and bylaws to possibly change representation on the board.

Weaver and Flint City Councilman Eric Mays are currently listed as members of the board, which features 12 regular members, a chairman, vice chairman, CEO and the Flint mayor.

Weaver made it clear she was not happy with Flint being committed to the deal but noted options for extricating the city were limited.

“We’ve gotten information actually saying these are binding contracts,” she said during a press conference Tuesday morning. “... I don't know who thought these were good deals for the city of Flint.”

KWA is, in the most basic terms, an 80-mile system of pipes (60-66 inches in diameter) and two pumping stations that will send water to Flint and Genesee County for treatment and sale to other communities.

And as an incorporating member of the KWA, Flint cannot walk away without a financial hit should it want to. The city has agreed to purchase 18 million gallons of daily water capacity from the authority and is committed to an annual $7 million bond payment over 28 years.

Flint is essentially on the hook for 34 percent of the principal and interest owed on $220.5 million in bonds KWA issued in April 2014 to finance the pipeline project, according to bond documents.

Flint was expected to connect to KWA water via a 72-inch pipeline that is no longer available because it is now being used to deliver water from Detroit’s Lake Huron supply, which the city reconnected to in October.

Building a new connection line between the KWA and Flint water treatment plant is expected to cost between $9 million and $12 million, according to a May report commission by the Michigan Department of Treasury and prepared by Raftelis Financial Consultants Inc.

The city is expected to face additional costs for potential back up sources, according to the report, including up to $19 million to expand Genesee County Drain Commission’s raw water impoundment or $25 million for a city-owned impoundment.

On Tuesday, Wright said KWA still makes the most financial sense for Flint over the long haul.

“I’m glad we’re moving forward,” he said. “We’re going to do what we can to assist the city in understanding the reality that KWA is the highest-quality, lowest-cost water Flint can access — period. That’s the truth of it.”

In April 2014, the city switched its water source from DWSD to the Flint River. It was a cost-saving move meant to provide residents water until KWA was expected to come online in 2016.

But Flint can’t tap the new water system until the city meets testing criteria established by the U.S. Environmental Protection Agency, which isn’t expected to occur until next year.

A failure to treat Flint River with proper corrosion controlling chemicals is thought to have caused widespread lead contamination and, possibly, rises in the number of Legionnaires’ disease cases. Before Flint switched back in October to the Detroit-based system, 12 people died from Legionnaires’.

The GLWA has offered to keep Flint on as its customer.

“I’m not excited about this,” Weaver said Tuesday. “But I think working toward these changes gives us greater influence than what we had before.”

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