CHICAGO — With a bankruptcy court deadline looming, Michigan officials have set a Tuesday meeting to try to resolve some of the thorniest issues blocking a controversial $1.9 billion lease of Detroit's water and sewer system.

The meeting, which will include representatives from Gov. Rick Snyder's office, comes after Oakland County officials complained that the state was not doing enough to tackle the county's biggest concerns about the deal.

"The state has not stepped up to deal with the issues, though they have been at the table," Oakland County deputy executive Robert Daddow said in an interview Friday "I am hopeful that this Tuesday meeting coming up will solve the issues or set in motion something to solve them."

The lease is seen as a key element of the bankrupt city's restructuring. Detroit and the state are scrambling to put together the proposal by March 1. That's the deadline for the city to file a plan of adjustment with the bankruptcy court.

Oakland County is one of four partners, including Wayne and Macomb Counties and Detroit, that has been trying for months to hammer out a deal to enter create a new regional authority to lease, for 40 years, the Detroit Water and Sewerage Department, one of the city's most valuable assets.

The city-owned enterprise serves customers in a 1,079-square-mile area that includes Detroit and 127 suburban communities.

The deal calls for a new regional authority to take over the system, and its $5.9 billion of outstanding debt, and funnel an annual payment estimated at $48 million back to the city, which would continue to own the asset.

The state and Detroit, represented by the city's investment banking firm Miller Buckfire, are expected to address the county's two top concerns Tuesday, Daddow said. That includes lack of adequate financial information and the county's worry that several of the governments in the system won't have the money to pay their bills or the large capital needs looming in the next decade.

Miller, Buckfire is now expected to provide the county with the requested financial documents, Daddow said.

When it comes to the distressed local governments, it needs to be the state, not the city, that offers some kind of support or back-up pledge, he said. The system serves a number of stressed Michigan cities, including many under state control, such as Flint, Hamtramck, Pontiac, and Highland Park. Highland Park already owes $18.5 million to Detroit for unpaid water and sewer bills.

"This is largely outside the city's control," Daddow said. "The only people who can represent them are the state."

A state pledge, a deal to use federal dollars for low-income customers, or another proposal would ease Oakland's concerns about the county getting stuck with unpaid bills or having to finance badly needed capital upkeep.

"The notion of the distressed communities has been on the table for a long time," Daddow said. "We've had no progress until this week.

"They're going to come with a proposal on the distressed governments issue, and secondly, the comments that we have been putting in many of the documents, are going to be addressed as well," said Daddow. "Up until now, it was 'Sign the documents without the comments'."

The governor's office did not reply to a request for comment.

The water and sewer deal was part of the draft plan of adjustment the city circulated to creditors. The proposal plays a central role in the city's tentative bankruptcy exit plan, as creditors are in line for an extra $300 million if the deal closes.

The deal relies on a refinancing of the estimated $5.9 billion of secured water and sewer debt now outstanding by the new authority to generate savings. That would require current bondholders to waive their call protections and agree to the refinancing.

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