Higher water rates may loom for metro Detroiters

City drives hard bargain as it prepares to sell water department without inspection

By Rod Meloni - Reporter, CFP ®

DETROIT - The sinkhole which swallowed westbound Jefferson Avenue near the City-County building this past weekend says all you need to know about the Detroit Water and Sewerage Department.

It's old decrepit and falling apart.

Macomb County Executive Mark Hackel says he is getting pressured to buy the system, and yet he doesn't know its true condition.

"That's a century-old water system underground. We worry about our roads above ground, we know the infrastructure is awful and we need some repairs. It's the same thing with the infrastructure down below and we have no information telling us what that future cost is going to be," said Hackel.

Last week, Oakland County Executive L. Brooks Patterson told Metro Detroiters to look out.

"Your rates are certainly going to double. I'm betting that it triples," he said.

Here's part of the reason why:

As part of the city's Chapter 9 bankruptcy, Detroit Emergency Manager Kevyn Orr is working to form a regional water and sewer authority.

Hackel says Orr's man negotiating the deal, New York investment banker Ken Buckfire, has considerable incentive to get a deal. He testified in bankruptcy court in December. He is getting a $2 million opinion fee along with a 3/4 percent payment or $8 million should he get the $9 billion price tag Orr want.

Hackel says Buckfire is pushing a price tag and withholding information.

"My interest isn't trying to figure out how do we solve Detroit's problems. Mine is how do we become a good regional partner, but do it in a way that adds a tremendous value to not only Detroit but to Macomb County as well, and we and Oakland County are lockstep," said Hackel.

The mediation process on the water department is ongoing and there is likely to be a hearing in federal court on Tuesday morning. However, the counties are being pressured to come to a deal before February, and they are certainly blanching at that.

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