CHICAGO – The Michigan Senate is expected next week to take up $28 million in emergency funding Gov. Rick Snyder proposed in Tuesday's State of the State address to help Flint with its water contamination crisis.
The House signed off Wednesday on Snyder's proposed emergency funding for filters, testing, new plumbing, and health treatment. Funds also will help the city stave off water shut-offs and will fund an analysis of the infrastructure.
"The unanimous vote demonstrates to the nation that all of Michigan is standing together help the people of Flint," Snyder said. "My further commitment is this $28 million is just one more step toward a long-term solution. There is more to come."
Snyder is expected to provide additional financial assistance in his budget that will be unveiled on Feb. 10. The state recently announced a $575 million surplus heading into its next budget year.
Also this week, Snyder appealed the federal government's denial of a major disaster declaration. President Obama last week approved an emergency declaration but denied the disaster declaration that would grant more local assistance.
"This situation poses an imminent and long-term threat to the people of Flint. We appreciate the support of the White House through the earlier emergency declaration. But additional federal resources are needed for the work that must be done," Snyder said.
Snyder used a portion of his address to speak about the crisis and the state's slow handling of the contamination problem. He also again apologized to residents for his administration's slow response and pledged to improve the city's water infrastructure.
The crisis began after the city broke off from the Detroit Water and Sewerage System in 2014 while under emergency management, saying it was too expensive.
The city began pulling water from the Flint River with a plan to use the river water until 2016, when it will get its water from a new pipeline being built by the Karegnondi Water Authority.
The city joined the authority, which will draw water from Lake Huron, in 2013 as a means to save money. The authority, which also includes two other counties in addition to Flint and Genesee County, issued $220.5 million of bonds in 2014 to fund the 63-mile pipeline to Lake Huron. The transaction won The Bond Buyer's 2014 Midwest Deal of the Year award.
Last fall, the state provided the city with $6 million to help over the costs of reconnecting temporarily Detroit's water and sewer system. The return to Detroit water did not solve the city's problems because it became clear that the delivery system's pipes remained contaminated.
During his speech, Snyder also pressed lawmakers to support his overhaul of the fiscally distressed Detroit Public Schools.
Several bills tied to the controversial proposal opposed by some local lawmakers were introduced last week. The district's fiscal stress led to its placement under state oversight seven years ago and Snyder last year began pushing for a major restructuring that has been slow to gain momentum.
Under the proposal, the district would be split into two entities. The former DPS entity would remain intact to continue collecting tax revenue until its bonded debt is repaid. The new entity would operate schools. The plan relies on $715 million of state help.
The district faces a fiscal reckoning that begins next month when its expenses go up by $26 million monthly as cash flow repayment begins. The district's emergency manager has warned that the system will exhaust cash to maintain operations by April due to its debt load.
The district this week sued to stop ongoing teacher sick-outs but the Michigan Court of Claims refused on Thursday to issue a temporary restraining. The court has set a hearing for Monday on the DPS lawsuit filed against some teachers and their union.
Moody's Investors Service said of the action in a recent report that it "highlights the bleak financial condition of the district, as well as its poor facilities and low workforce morale."
"Continued sickouts may further incentivize students to flee the district, resulting in lower per-pupil revenues from the state of Michigan and continuing a downward spiral of credit quality," the report warned.
