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Mackinac Island — Gov. Rick Snyder signaled Friday he wants to avoid an unprecedented action of dissolving the city of Highland Park through bankruptcy to erase a $25.6 million water bill debt that has stalled negotiations over a Metro Detroit regional water authority.

Snyder told reporters he didn't want to speculate on whether bankruptcy or dissolution is needed to relieve Highland Park of its debt to the Detroit Water and Sewerage Department after years of not collecting water bills from residents.

"The issue in front of us right now is let's see what we can do to solve the problem by working with the counties and the city (of Detroit) and Highland Park," Snyder told reporters at the conclusion of the annual Mackinac Policy Conference.

Snyder addressed the issue after The Detroit News first reported Friday that Highland Park's unpaid water bills have become a sticking point in negotiations between suburban, city and state leaders over creation of a Great Lakes Water Authority to operate Detroit's sprawling water system in southeast Michigan.

"There will be some good, healthy discussions to help come up with a resolution in the next week or so," the Republican governor said.

Dissolution of Highland Park could leave Detroit's suburban ratepayers on the hook for the debt, which has stirred opposition from Oakland County and Macomb County's top leaders.

Repeated calls by The News Friday to Highland Park officials for comment were unreturned.

Detroit sells wholesale water to communities in the three counties that operate their own retail service. "Wholesale customers have to pay when other wholesale customers don't pay," said Alexis Wiley, chief of staff to Mayor Mike Duggan.

The governor sidestepped questions about whether the state would be willing to issue bonds to take care of the debt to diffuse the issue with suburban leaders — a proposal by Oakland County Executive L. Brooks Patterson. It would have the effect of spreading the debt to all state taxpayers.

"I don't want to speculate on that because we're only one participant, and I want to do it in a collaborative fashion with all of the members and people involved in the water authority," said Snyder, who has one appointee on the six-member water authority board.

Patterson and Macomb County Executive Mark Hackel are publicly demanding the Highland Park debt be resolved before a water authority lease is signed in two weeks. The deadline is June 14.

The News reported that federal Judge Sean Cox, who is mediating water authority negotiations, wants to meet Monday with Duggan and Patterson in hopes the two can get to a handshake on the deal.

This news enraged Hackel on Friday as he was preparing to leave Mackinac Island after the three-day policy summit at the Grand Hotel.

"The whole deal stinks to high heaven," he said.

Hackel, a Democrat, has been an outspoken critic of the secret bankruptcy court negotiations for a regional water authority.

Cox had placed a gag order on participants, but Hackel has been speaking out publicly in recent weeks as the June 14 deadline nears for suburban and city officials to ink a lease deal that will pay Detroit $50 million annually for water and sewer infrastructure improvements.

"Even this judge's involvement at this point in time is suspect," Hackel said. "I'm appalled at the way this is being handled (just) because I disagree with what's going on."

clivengood@detroitnews.com

(517) 371-3660

EAA update

Gov: Schools set for fall

Gov. Rick Snyder said Friday the Education Achievement Authority will continue operating 15 Detroit schools this fall, even while his administration reviews the future of the school reform district.

"I don't see any immediate change in terms of them having schools and working to do well to educate kids in Detroit, and they're having success with some of their schools," Snyder said at the end of the three-day Detroit Regional Chamber's policy conference on Mackinac Island.

Earlier this month, Snyder ordered a review of the three-year-old EAA's "performance and structure" by the state's School Reform Office, which he brought under his control through an executive order moving that office from the State Board of Education-controlled Department of Education.

"That will tie into a more thoughtful discussion about the governance structure for the EAA," Snyder said.

Chad Livengood

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