CHICAGO - The transfer of the Detroit Water and Sewerage Department into a new regional authority advanced last week when the Wayne County board of commissioners approved the deal.
Wayne County was the first of the three counties to okay the new authority, considered key to the city's bankruptcy exit plan and restructuring. Oakland and Macomb Counties are set to vote on it the week of it Oct. 6. The leaders of all three counties support the proposal.
The Detroit City Council approved the deal in September.
"This is an historic moment for our region," Wayne County Executive Robert Ficano said in a statement. "With a water system that serves 40 percent of the state's population, it only makes sense to have a seat at the table." The commission voted 14-1 to approve the proposal.
The troubled DWSD, which serves 40% of the state population, requires billions in capital upkeep and is plagued by unpaid bills.
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.
The deal calls for Detroit to get a $50 million annual lease payment for at least 40 years. The city can only use the money for upgrades to its water and sewer system, and cannot divert it to the general fund.
The city will retain control of its 3,000 miles of local pipes, while the counties will assume control of all regional assets, which include 300 miles of suburban pipes. The new authority will operate the five water treatment facilities.
The regional authority plans to sell between $500 million and $800 million of bonds to repair Detroit's part of the system.
The debt will be backed by the $50 million annual lease payment. The state of Michigan is expected to help back the bonds in some way to help achieve a higher rating.