Snyder proposes $5 water fee for pipe replacement

Jonathan Oosting
Detroit News Lansing Bureau

Lansing — Gov. Rick Snyder wants water customers across Michigan to pay a $5 annual fee to help upgrade aging infrastructure and replace lead pipes in their local communities.

In a March 10, 2017, photo, work continues on the water replacement lines in Flint, Mich. Gov. Rick Snyder wants water customers across Michigan to pay a $5 annual fee to help upgrade aging infrastructure and replace lead pipes in their local communities.

The Republican governor on Thursday proposed a state water fee — a de facto tax for public water customers — that would begin at $1 in 2020 and ramp up to $5 by 2024. When fully implemented, the plan would generate an estimated $110 million a year through 2040, when the fee would end.

“Critical updates are necessary to rebuild our state’s failing water infrastructure,” Snyder said in a statement. “Investing in our state’s water infrastructure needs is essential to ensure every Michigander has access to safe drinking water, protect our environment and continue our state’s outstanding economic growth.”

Under the plan, which will require approval in the GOP-led Legislature, the state would award $75 million a year in grants and forgivable loans to help communities replace lead service lines and fund other infrastructure projects.

The state would spend $25 million a year on “integrated asset management” efforts to better coordinate waste and stormwater projects, and $10 million a year go into an emergency infrastructure failure fund that could be tapped in extreme cases like the massive sinkhole that developed in Fraser in late 2016.

Eighty percent of the revenue generated by the fees would be returned to the communities where it was collected. Only customers of public water supply systems serving 1,000 people or greater would be assessed.

The fee would complement a proposed administrative rule requiring replacement of all lead pipes in the state within 20 years and eventual implementation the nation’s toughest lead limit for drinking water, a push inspired by the Flint water crisis. Flint is in the process of replacing all of its damaged water service lines that resulted when the city failed to use corrosion controls on the river water it used for 18 months starting in April 2014.

But the fee could be a tough sell at the Michigan Capitol, where majority Republicans bucked Snyder’s call to boost infrastructure funding last year. They are pursuing bipartisan personal income tax cut plans the term-limited governor opposes because of the strains they would place on future budgets.

Snyder has also expressed budget concerns with a plan backed by House Speaker Tom Leonard, R-DeWitt, that would forgive “driver responsibility fee” debts that have caused motorists to lose their licenses.

Leonard had not reviewed details of Snyder’s water proposal by Thursday afternoon but said “it’s very disappointing that at this stage of the game we are currently talking about fee increases versus getting 300,000 people their driver’s licenses back.”

Under a draft rule the Snyder administration first announced in November, Michigan’s “action level” for lead in drinking water would gradually drop to 10 parts per billion by 2024, not 2020 as Snyder had initially proposed. The governor has called the federal threshold of 15 ppb “dumb and dangerous.”

State officials plan to give communities 20 years to replace an estimated 500,000-plus lead service lines in a state with the third-most in the U.S. That is longer than a 10-year window that had been envisioned when Snyder first called for tougher lead restrictions more than 1½ years ago.

Most water systems in Michigan were built 50 to 100 years ago and need repairs or replacement, according to the Snyder administration, which said aging systems typically lose 10 to 50 percent of the drinking water they produce to leakage.

Lance Binoniemi of the Michigan Infrastructure and Transportation Association said his group has commissioned polling showing support for modest fee or tax increases to pay for upgrades as long as they money comes back to their communities.

“I think a $5 fee is affordable for most citizens in Michigan, and if it can help jump-start fixing our underground water infrastructure, I think legislators should get behind it and champion it,” Binoniemi said.

Michigan Environmental Council President Chris Kolb also praised Snyder’s plan, noting that three out of every four Michigan residents rely on public water systems that some communities cannot afford to rebuild.

“This plan would allow for more preventative maintenance — helping to keep Michigan residents safe by preventing disasters before they happen,” Kolb said in a statement.

Separately, a bipartisan group of state lawmakers on Thursday proposed a seven-bill package that would implement some of the long-stalled recommendations made by a Joint Select Committee on the Flint Water Emergency in October 2016.

The legislation would create a State Employee Ombudsman for worker reporting, establish whistleblower protections and increase penalties for officials who harm the public or violate the Safe Water Drinking Act, according to the office of Senate Minority Leader Jim Ananich, D-Flint.

The bills would also require greater rate setting transparency by water suppliers and create a new tiered system of penalties and fines for violating the state’s Safe Water Drinking Act.

Sponsors include Ananich, Republican Sens. Jim Stamas of Midland, Joe Hune of Hamburg and Rick Jones of Grand Ledge, and state Rep. Stephanie Chang, D-Detroit.

“An entire city was poisoned and more than 12 people died,” Ananich said in a statement announcing the legislation, referencing lead contamination and outbreaks in 2014-2015 of Legionnaires’ disease in his hometown and the region.

State regulators failed to require that the city use corrosion control chemicals when it began using Flint River water in April 2014. The harsh water damaged aging pipes, allowing lead to leach into drinking water. Flint returned to Detroit water in October 2015.

Officials continue to recommend residents use filters even though recent testing shows lead levels in the acceptable range of 6 parts per billion.

“The Flint water crisis is a tragedy that could have been prevented many times over if the proper care and concern was given to our water sources and infrastructure,” Ananich said. “We can’t change history, but shame on us if we don’t learn from it and change our future.”

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Staff writer Michael Gerstein and The Associated Press contributed