Regional water authority is coming to Detroit

Detroit emergency manager plans regional authority to take over Detroit water department

Author: Rod Meloni, Local 4 Business Editor, @RodMeloni
Published On: Oct 07 2013 06:18:50 PM EDT   Updated On: Oct 07 2013 06:37:24 PM EDT
Rod Meloni - more 4 your money
DETROIT -

We are the Great Lakes State and yet for all of the water we have around us there has been considerable complaint about what it costs to get that water into our homes through Detroit city-owned pipes.

Water rate hikes have traditionally been viewed as a sock-it-to-the-suburbs move. In the city any discussion of either selling or leasing out the water department falls under the department of the theft of the city’s jewels.

Read more: EM Orr wants regional authority to run Detroit water

Detroit Emergency Manager Kevyn Orr intends to remove the rancor and will create a regional water authority. His spokesman, Bill Nowling, on Monday told Local 4 "we think that it’s time to move the Detroit Water and Sewer Department into a full-fledged authority.”

"We think that will save money in terms of our ability to borrow and to create a revenue stream from anything between $40-$100 million a year for the city," said Nowling.

What he did not say is that a lot of jobs likely will disappear, too. That, in large measure, is why there was so much caterwauling about allowing someone else operate the system.

Unlike Mayor Dave Bing, when he created the regional water board largely to prevent suburban rebellion, Kevyn Orr is not asking anyone’s permission. He is quietly, steadily putting together the pieces and the contract and will send out the email by year's end.

This is what many turnaround experts call the low-hanging fruit. Allowing the state to operate Belle Isle, spend millions fixing it up, and take $6 million a year off the city’s expenses is a no-brainer to bankruptcy attorneys like Kevyn Orr. Taking the water department, allowing the city to collect rent on the lease of the system instead of spending money maintaining and employing is the key here. The same work is done, more efficiently, at lesser cost to the city.

The end user is happy to turn on the tap or flush the toilet and get the good service. The bill stays lower. The city gets a revenue stream instead of having to spend money. Everyone walks away happy … except perhaps the malcontents who still believe the dictatorship of emergency management is dedicated to stealing the remaining jewels.

But Nowling says the EM is actually preserving the jewel -- the city keeps ownership of the money flows inward, not outward, and like it or not it is what is coming.

All of a sudden, while looking around, the so-called jewels have new luster. Cobo Center is a great convention space that is in the black; the Detroit Zoo is a world-class facility; the City-County Building while hosting a bankrupt city is clean, neat and good usable space.

This is the template for the water department and will likely happy by year’s end, like it or not.