Flint mayor, state clash over water tax liens

Leonard N. Fleming, The Detroit News

Flint — A state oversight board rejected Tuesday the city’s one-year freeze on forcing nearly 8,000 residents to pay their delinquent water bills, a move the city’s mayor said she’d defy.

Flint Mayor Karen Weaver said Tuesday that she disagrees with the state board and will withhold the water tax liens from Genesee County — a move that she said essentially would continue the moratorium on water payments that the City Council approved last month. It also might delay foreclosures on homes with delinquent bills totaling $5.1 million.

“ ... It seems that RTAB felt it was necessary due to Council’s decision of not supporting the longterm water source recommendation, which means the city will now have to purchase water at a much higher price along with several other costly financial obligations that could have been avoided,” Weaver said in a statement Tuesday. “I am ordering the city’s chief financial officer to not transfer the liens to the county.”

Gov. Rick Snyder’s appointees on the Receivership Transition Advisory Board, which monitors the city’s finances since Flint’s emergency from state emergency management in April 2015, didn’t explain their vote to start tax foreclosures. Frederick Headen, head of the Flint advisory board, declined comment.

Weaver told The Detroit News on Tuesday she blames the state board’s decision on the City Council’s reluctance Monday to support her recommendation that Flint sign a 30-year agreement with the Detroit-area water authority as it emerges from its contaminated water crisis. David Sabuda, Flint’s interim chief financial officer, told the review board that the city still has a cash flow problem.

The state set a Monday deadline for the council to approve the deal with the Great Lakes Water Authority. Instead, the council passed a three-month extension of its contract as some members vowed to find another alternative. The authority has been supplying water to the city since October 2015.

“While I understand the finances that RTAB is looking at, I disagree at this point in time,” the mayor told The News from New Orleans, where she is attending a water summit.

“But looking at it as a whole, this hurts us. Not passing this (Detroit area water deal) yesterday hurts us financially. ... It’s like we’re hitting the people twice.”

Withholding the tax liens might lead to the first showdown with Gov. Rick Snyder’s financial advisory board. Snyder’s Flint emergency managers approved and implemented the April 2014 switch to Flint River water, while state environmental experts failed to require corrosion control chemicals that resulted in lead leaching from the city’s aging pipes and connections.

Snyder set the water tax lien issue in motion in February when he ended state water bill credits for Flint residents after testing found that lead levels in water were consistently below the federal action standard of 15 parts per billion. Experts say no level of lead in water is considered safe.

Flint’s council passed the bill payment freeze last month. It affects residents with two years of unpaid water and sewer bills dating to June 2014.

To help city finances, among other benefits, Weaver emphasized that the council needs to reconsider and approve her recommended 30-year deal with the Detroit area authority on a long-term water source.

Flint council President Kerry Nelson defended the council’s extension vote while criticizing the oversight board’s rejection of the water bill payment freeze and not considering residents who still are advised only to drink bottled or filtered tap water.

“I am disappointed that the people (of Flint) aren’t included and thought about,” Nelson said. “You have some residents who aren’t paying for poisoned water. I’m not done with the fight because I believe in fighting. I believe we need to listen to the people of this city.”

Advisory board members listened to testimony from Flint officials about the city’s financial predicament. The city has collected only $700,000 in delinquent bills.

Sabuda said the council’s three-month extension might cost the city an additional $1.9 million, which includes $600,000 a month for debt payments to the Karegnondi Water Authority that the city couldn’t connect to until August 2019.

On the Great Lakes extension, Nelson said the state’s June 26 deadline was too rushed. The council needs months, not weeks, to vet the deal just like the mayor and others took the time to make the plan, he said.

“We have to remember that the governor caused this problem,” Nelson said.

It is unclear how Flint’s delay on making a permanent water source choice will affect the $100 million in federal aid that Congress approved in December to help fix the city’s water infrastructure. The state oversight board voted Tuesday to support the council’s decision to extend the Great Lakes authority’s contract until September.

If for some reason the water payment freeze continued for five years, Sabuda said, the city could not legally go after the delinquent residents for the money.

After the meeting, Sabuda said he believes Flint residents will end up paying their water bills because covering the water and sewer deficit would mean using other city funds such as fire and police that residents also value.

“This gives the city the opportunity to pay its bills, collect what is rightfully due the city,” said Sabuda, whose contract with the city ends Friday.