CHICAGO — The Detroit City Council Friday approved a deal to have a new regional water authority to take over the bulk of the Detroit Water and Sewerage Department and also gave the green light to the city's bankruptcy settlement with bond insurer Syncora Guarantee Inc.

The council approved the Syncora settlement with no discussion. The settlement marked a turning point that could help the bankrupt city achieve its goal of exiting Chapter 9 in the next few weeks. The deal calls for the city to pay the bond insurer a mix of cash, real estate and asset leases in return for Syncora's support for the city's plan of confirmation.

The vote on the regional water authority proved more controversial, with Detroiters testifying for and against the move ahead of the meeting and the council members debating it for an hour. The final vote was 7-2.

The deal calls for Detroit and Wayne, Macomb and Oakland Counties to create a new bond-issuing authority to take over the troubled DWSD for 40 years.

Detroit would retain control of the assets within city limits and the authority would allocate $50 million of revenues solely for upgrades to the city infrastructure. The authority expects to borrow up to $800 million for the Detroit improvements.

"It's not a perfect deal, but it is certainly the best I've seen," council member Saunteel Jenkins said before voting yes. Like other council members, she cited crumbling infrastructure as part of the reason for her vote. "This will help us get there, to the place where we all want to be," Jenkins said.

Council President Brenda Jones and member Mary Sheffield voted against the plan. Both said the deal should go before voters.

The boards of the three counties, as well as the Detroit City Council or Emergency Manager Kevyn Orr, still need to sign off on the deal, with an Oct. 10 deadline.

Like the Syncora settlement, the new regional plan is expected to be an important part of the city's effort to exit bankruptcy.

The new Great Lakes Water Authority will be run by a six-member board made up of two Detroit mayoral appointees, one appointee from each county, and one appointee of the governor. Major decisions on issues like contracts or future privatization will require five out of six votes.

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