The Hidden Lesson in the Flint Water Crisis

Published on by in Government

The Hidden Lesson in the Flint Water Crisis

By Glenn Oliver

By now, everyone has heard about the water crisis in Flint, Michigan. An entire city of almost 100,000 people were potentially exposed to unsafe levels of lead in their drinking water as a result of the city switching the source of its drinking water and not properly treating the water. There is still a lot of finger-pointing going around as to who is exactly responsible for what decisions and who should be held accountable for the consequences. These issues will likely be debated and litigated for years to come. However, there has not been much written about the back story – how a history of dysfunctional regional politics created the environment that led to the crisis.

The genesis of the issue started when Genesee County (where Flint is located) and three neighboring municipalities (Lapeer County, Lapeer City, and Sanilac County) decided to sever their relationship with Detroit’s Water Department. The Detroit Water Department had supplied water to these communities for decades (since 1967). However, the group decided that they were being overcharged by Detroit and elected to build their own pipe from Lake Huron (at an estimated cost of $300 million) to supply their own communities with water. So, in 2010, they created a new water authority called the Karegnondi Water Authority (KWA). Flint joined KWA in 2013. KWA is currently building the new water intake pipeline for its member communities.

The decision to switch water sources is unusual. It is extremely rare for a community to switch water sources when there has not been a health problem and the delivery system is providing clean and safe drinking water for a community. Many asked why there was a need for KWA. The KWA website states that “[t]he new pipeline will avoid increased water rates from the City of Detroit” and “could save residents millions of dollars.”

The decision to split from the Detroit Water Department may have been made to help the residents in KWA’s member communities, but it hurts the remaining communities that receive Detroit water. Detroit water is still delivered to 126 other communities in seven counties, including communities near the KWA service area.  This necessitates maintaining the expensive networks of pipes, pumps, and staff required to deliver water services to the communities in the area.

However, KWA covers over 2,400 square miles and over half a million people.  This is a tremendous loss for the Detroit Water Department. The infrastructure still has to be maintained, but now they have lost half a million customers. The remaining customers are now burdened with even higher rates to make up the revenue lost to KWA. Basically, the communities leaving Detroit Water will cause the remaining Detroit Water customers to have higher bills (simple math – fewer people to pay the same fixed infrastructure costs equals higher bills).

The Detroit Water Department was recently split into two agencies. Detroit Water & Sewerage Department and the Great Lakes Water Authority (GLWA). The communities around KWA are now served by GLWA. However, the impact is the same – there are fewer customers left who are paying more for their water service as a result of KWA.

The remaining Detroit Water customers are not happy. Oakland County, which buys water from Detroit, called KWA a “huge waste of taxpayer dollars” and estimated that Oakland County residents will be forced to pay 6 percent more for water as a result of KWA. One professor conducted an analysis and concluded that the decision to sever ties with Detroit and join the KWA amounted to “strategic racism.”

KWA officials have fired back and defended their decision vociferously. For example, a report authored by the Genesee County Drain Commissioner states that the KWA was established as a result of “monopoly, price gouging, and corruption” by Detroit officials. The bad blood between KWA officials and Detroit Water/GLWA officials continues to this day.

As a result of the water crisis, Flint Mayor Karen Weaver has announced that she is recommending that Flint continue to receive its water from Detroit. Mayor Weaver said that switching to KWA was too risky and could cause disruptions that residents don’t need.

However, Flint now is contractually obligated to make bond payments of $7 million per year for 28 years for KWA. The GLWA is paying KWA a $7 million “credit” for Flint. Essentially, it appears that the ratepayers are paying more ($7 million per year) for KWA. This includes Flint and all of the other communities that receive water from Detroit and pay for Detroit water. Basically, the $7 million annual payment is coming from ratepayers.

Was the KWA necessary? Detroit and GLWA officials would say no, it was a huge waste of taxpayer money.  KWA officials would say yes, it was necessary because of the monopoly power, price gouging, and corruption of Detroit officials.

One thing is for sure: hundreds of millions of taxpayer dollars will be spent building and operating a new water authority that arose out of the inability of public officials to trust each other and work together.

So what’s the lesson? Citizens end up paying the cost when politicians are unable to work together. Or, to quote an ancient Kenyan proverb: When elephants fight, it is the grass that suffers.

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Glenn Oliver is CEO of H2bid (www.h2bid.com). He is also a former commissioner with the Detroit Water & Sewerage Department and a former Group Executive for the City of Detroit.

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