<<FM notes: This article does a good job of laying out many of the issues associated with the Great Lakes Water Authority as well as arguments for and against. As my comments in this article relay, my goal is to ensure that water rate increases are kept in check as much as possible. State law is pretty clear that members of the authority will be protected from higher rate increases that non-members could be subject to, which made joining the authority the logical conclusion.>>
October 14, 2014
Reluctantly, Macomb County joins new regional water authority
MACOMB COUNTY — After weeks of debate and discussion, Macomb County became the fourth and final municipality to join the new Great Lakes Water Authority (GLWA) on Oct. 9, just ahead of a court-mandated deadline.
The Board of Commissioners voted 10-3 to make Macomb County a member of the long-awaited regional partnership with Oakland and Wayne counties, and the city of Detroit. Commissioners Don Brown, Michael Boyle and Joe Sabatini cast the three dissenting votes. Many of the commissioners who voted “yes” also took serious issue with the GLWA proposal but felt that it was the best option available for Macomb County.
As Board Chair Dave Flynn, D-Sterling Heights, put it, “When we look at how we got here, obviously part of this is the byproduct of the cold reality of the Detroit bankruptcy. … I’ve always viewed this issue through the lens of, ‘Is this better than what exists today, and is it better than the alternative before us now and into the future?’ (This authority) is far from perfect, but I’ve always believed that we should never let perfect be the enemy of the good.”
In joining the GLWA, the board approved the authority’s articles of incorporation and the memorandum of understanding that was signed on Sept. 9 by Macomb County Executive Mark Hackel, Oakland County Executive L. Brooks Patterson, Wayne County Executive Robert Ficano, Detroit Mayor Mike Duggan and Gov. Rick Snyder.
The deal amounts to a 40-year, $50 million annual lease by the three counties from the city of Detroit. The GLWA will take over the Detroit Water and Sewer Department’s infrastructure, appoint a general manager and set water/sewer rates for residents in the future. It will be governed by a six-person board made up of two members from the city of Detroit; one each from Macomb, Oakland and Wayne counties; and one appointed by the governor’s office.
The new authority was first approved 7-2 by the Detroit City Council on Sept. 19, then 14-1 by the Wayne County Board of Commissioners on Oct. 2, then 18-2 by the Oakland County Board of Commissioners on Oct. 8. Its creation was part of the city of Detroit’s ongoing bankruptcy process, and it included an order by a federal bankruptcy judge that each participating community make a decision about joining the authority by Oct. 10.
Hackel addressed the board about the GLWA, and like all county officials, he was frustrated by the process that led to its formation. He was particularly exasperated by the closed-door process, which included a court-ordered gag order that prevented him from discussing the issue with local municipalities.
“Water is a local issue,” Hackel said. “Local municipalities buy water from the city of Detroit. For years, they have had concerns about the operations of (Detroit Water and Sewer). I don’t think anybody in this room disagrees with the reality that this could have been better … had there been involvement from the local municipalities. We now have to … decide whether or not we want to finally give the locals an opportunity to have a voice, a voice they haven’t had for decades. Granted, we may be a small voice — but at least it’s a voice.”
However, the GLWA deal failed to gain the support of Public Works Commissioner Anthony Marrocco, who was outspoken against the authority throughout the process. At the board meeting, William Misterovich, the Public Works Office’s chief deputy, read a statement on behalf of Marrocco detailing all the reasons the board should vote against the deal.
According to Marrocco, these include an alleged GLWA voting bias in favor of the city of Detroit; excessive annual lease payments of $50 million per year to Detroit, on top of an existing $26 million annual subsidy; no guaranteed cap on annual rate increases; a seat on the governing board for the governor, when the state will not be contributing toward the cost of running the authority; a lease agreement that runs for an unlimited number of years; a $4.5 million retail customer assistance plan that will largely benefit Detroit residents at the expense of suburban ratepayers; and the possibility of increased lease payments in the future.
Marrocco urged commissioners to consider one other factor on top of those that he had listed. He stated that by joining the authority, the board would compromise the possibility of Macomb County ever establishing its own standalone, independent water and sewer system.
“With a population approaching 900,000 people, Macomb (County) is a big boy, and we should be capable of addressing these issues in a responsible and comprehensive manner,” Marrocco said. “If we are ever to stand on our own two feet and become independent, now is the time to begin the process. … Voting to join the authority would basically short circuit that process, curtail our options, and commit us to being a long-term and perhaps permanent customer of the regional authority.”
‘A Detroit bailout’
Several commissioners did not hide their disdain for the GLWA, which they viewed as a bad deal for Macomb County. Boyle, a St. Clair Shores Democrat, advocated rejecting the proposal because it would give county officials other options moving forward.
“I always wanted to get involved with a regional water authority, but I had no idea it would end up like this,” he said. “Ordered by a bankruptcy judge in Detroit, gag orders, secret meetings, backdoor deals — we have no idea what’s really going on here. … A true regional authority wouldn’t be directed from the people who are using the suburbs as a cash cow. And that’s what this is: a Detroit bailout. … If I had my way, I’d sue that judge and tell him he’s wrong. I’d file an injunction and stop all of this silly nonsense.”
For Brown, R-Washington Township, the process equated to “judicial tyranny.” He lamented the fact that the city of Detroit would have two members on the GLWA board while all other parties would only have one.
“I cannot and will not endorse a process like this, or an authority where Macomb County has only but a whisper of a voice,” he said. “How can you be responsible for an agency when you don’t have the authority to manage it on an equal basis with the others? With Detroit having two votes and Macomb County only having one, we’ll be second class. … When (residents) get their double-digit (water) rate increases, they have to remember where that came from. When that happens, at least I can say I didn’t vote for it — it’s not my responsibility.”
Sabatini, a Macomb Township Republican, pointed out the similarities and differences between other regional partnerships in Macomb County, such as those with the Detroit Zoo and the Detroit Institute of Arts. He and other commissioners noted, though, that unlike those collaborations, the public did not get a chance to vote on the GLWA.
“It sounds like our tax dollars are going to be taken away from us again today,” Sabatini said. “The key word here is ‘authority.’ I truly believe that the definition of authority is ‘the right for the authority to print money at our expense.’ … I’m very, very disappointed. But you know, I guess that’s what happens when you’re good stewards of your money — you get penalized.”
Even many of the commissioners who voted “yes” on the proposal had almost nothing but negative things to say about it. Commissioner Bob Smith, D-Clinton Township, echoed many of his colleagues in approving the GLWA only because doing so would give Macomb County “a voice at the table.” If the board had turned down the deal, Macomb County would still be a member of the authority, but Snyder would be the one to appoint its representative on the GLWA board. By supporting the authority, that decision will now fall to Hackel, who vowed to appoint a representative favored by local municipalities.
“Quite honestly, I feel like this is really being jammed down our throats,” Smith said. “I feel like I have a gun to my head to vote ‘yes’ on this. Unfortunately, it is better than the alternative. … but I can’t vote ‘no’ on the possibility that we will have an opportunity in the future to have our own (water authority). … I can’t see sitting there on our own, hoping that something better will come along, all while getting screwed over by the authority for not joining. And if you don’t think that will happen, you’re living in a world of dreams.”
A silver lining
Ultimately, the majority of the commissioners sided with Smith and stated that for all the negative aspects of the GLWA deal, the pros outweighed the cons. Several board members also pointed out a silver lining that could be taken away from the process.
Commissioner Jim Carabelli, R-Shelby Township, noted that without adopting the memorandum of understanding and articles of incorporation, Macomb County would not be able to introduce any amendments with regard to the operations and oversight of the authority.
Commissioner Kathy Vosburg, R-Chesterfield Township, reminded her colleagues that all future decisions made by the GLWA board would require a supermajority vote, or approval by at least five of six board members. She also said she wants to make sure that Macomb County has a representative on the board over the next 200 days, when the lease agreement with Detroit Water and Sewer will be drafted.
For Commissioner Fred Miller, D-Mount Clemens, supporting the GLWA proposal all came down to minimizing water and sewer rate increases for Macomb County residents. While a 4 percent annual cap on rate hikes had been discussed, Miller called this number “a target, not a cap.” Instead, he pointed to a provision stating that nonmember communities could be charged more for water and sewer services than member communities.
“If the lens through which we’re viewing this is to try to mitigate rate increases as best we can, the only way you can vote is ‘yes,’” Miller contended. “There’s a lot not to like about this (authority), but I think there are a lot of political reasons why we could vote ‘no’ and then grandstand and beat our chests that we’re not going to be somehow subject to Detroit. But I’m urging all my colleagues to vote ‘yes’ because I think it’s a courageous vote … and ultimately it’s what is going to do our best to keep rates as low as they possibly can be.”
Flynn added that to try to establish an independent Macomb County water authority, as Marrocco had suggested, might not be a practical solution at this time. He noted that initial estimates indicate that starting such a major infrastructure system could cost more than $4 billion and take 20-30 years to complete.
“So what’s our alternative?” Flynn asked. “To become a customer of the system, and after the contracts end, potentially pay even higher rates? If it was feasible to build our own system, I might look at this differently. But … I think water rates in the future will be lower under the (GLWA) than it would be for a Macomb County authority to build its own system. Regardless of whether you vote ‘yes’ or vote ‘no,’ we’re a part of this authority — we’re going to pay the fees associated with this authority.”
This latter point was reiterated by Hackel in an interview after the meeting. While he said he wishes that Macomb County could have a stronger voice on the GLWA board, the executive also said he feels confident that this new water and sewer system will be better than what Macomb County residents have seen in the past.
“If we were to have said ‘no,’ nothing changes,” Hackel said. “The authority is still in place. The minute that the city of Detroit and Wayne County agreed to it, it became an authority, so it didn’t matter what Macomb and Oakland (counties) were going to do. There’s nothing I can do to change that. … So you have a choice here: You can either sit back and complain, or you can at least have some control over your own destiny.”