New Detroit water boss ready to fix mess

Sue McCormick takes over helm at Detroit Sewerage and Water Department which faces $6 billion debt

By Kevin Dietz - Reporter

DETROIT - It's a tough time to be Detroit's water boss, replacing convicted former boss Victor Mercado and trying to turn around a $6 billion debt.

But Director Sue McCormick -- in an exclusive interview -- says she is up to the job. She believes Detroit should keep -- not sell -- the Detroit Sewerage and Water Department. Job one: Get rid of the theft, fraud and corruption that took place during the Kwame Kilpatrick and Mercado years.

"Whenever DWSD went out of compliance, the mayor was given extraordinary authority for procurement to override business practices," McCormick said. "So, an arrangement between the mayor and administration here at DWSD was ripe for those kinds of opportunities."

Now, a board, not a single individual, approves contracts. That greatly reduces the chance of corruption. An integrity unit was added on Friday with in-house detectives and a police chief to go after fraud.

"The business that will be done tomorrow will be different than the business that was done in the past," said McCormick.

McCormick says the new honest process is bringing companies that didn't bother bidding in Detroit before. It's also running off corrupt contractors.

"The fact of the matter now we have people coming back to do business with us that have not done business with us for years," McCormick said.

Job two: Lower the debt and stop raising water bill rates. Almost everyone in Metro Detroit gets water from here, and everyone has had double-digit increase year after year -- why?

"Almost 50 percent of our rates is because we've got that $6 billion in debt that we're paying interest and carrying charges on," McCormick said.

Like an out-of-control credit card, if the minimum is paid the debt will never get entirely paid off. Detroit has borrowed the maximum and is a high-risk customer paying exorbitant interest rates. Being linked to Detroit's financial mess doesn't help.

"We've been downgraded three times in the last year even though our financial performance is improving," she said.

McCormick says she is paying down debt by reducing costs. The labor force has been cut from more than 2,200 employees to less than 1,800. The infrastructure has been ignored for decades and needs repair.

McCormick says in her first year she got the Water and Sewerage Department back on track. Give her more time and the city will be glad they saved rather than sold off the asset.

"Eighteen months from now we'll be leaner than we are today, we'll have more functional technology, we will serve our customers better, and our long-term rate trajectory will become obvious to everybody," McCormick said.

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