Jim Lynch

The Detroit News

A former Detroit water official is reigniting a controversy about whether Flint could have saved money by staying with Detroit’s system and avoided a switch that eventually led to contaminated water in the Genesee County community.

While under the control of a state-appointed emergency manager in 2013, Flint rejected an offer to remain with Detroit’s water system that could have saved an estimated $800 million over the life of a 30-year contract, said Bill Johnson, former public affairs director for the Detroit Water and Sewerage Department.

Critics say that decision led to Flint joining a new regional authority and put the city on course to draw water from the Flint River — a move that eventually resulted in lead contamination issues.

But supporters of the new regional body — the Karegnondi Water Authority — reject that version of events and say it represents the kind of public relations battles waged three years ago between officials in Genesee County and Metro Detroit. They stress that the decision to break from the Detroit water system was separate from the later choice of tapping the Flint River as a temporary water source.

Flint’s long-running lead contamination problems have prompted a new round of finger-pointing over who was ultimately responsible for the split.

Johnson this week released an email outlining the offer to Flint area officials in April 2013 — just before the city agreed to join Karegnondi. The email, written by then-Detroit Water and Sewerage Department Director Sue McCormick to her board chairman James Fausone and chief counsel William Wolfson, describes a proposed immediate 48 percent rate reduction from $20 to $10.46 per 7,500 gallons and a 20 percent savings over the Karegnondi proposal.

A person speaking for McCormick, who is now the head of the Great Lakes Water Authority that oversees the Detroit water system, confirmed the specifics of the email.

“When compared over the 30-year horizon, the DWSD proposal saves $800 million dollars or said differently — saves 20 percent over the KWA proposal,” McCormick wrote in the email dated April 15, 2013.

Johnson said Detroit’s proposed deal should have never been rejected by Flint and state officials then involved with running the city.

“We were going to give Flint everything they asked for,” he said. “All their concerns would be answered in that contract.”

Genesee County Drain Commissioner Jeff Wright, who helped bring the Karegnondi project to fruition, said the Detroit water system’s offer — then and now — is not what its officials portray.

“Nobody wants to be blamed, and there have been a lot of different camps involved in this,” Wright said. “And some of those camps are still intact. A lot of people see the confusion going on over what’s happened in Flint, and they’re trying to rewrite history.”

Wright challenged the $800 million in estimated savings by noting that Karegnondi’s final price tag to build and operate a new system over several decades will total $700 million. In addition, he said Detroit water officials never offered long-term assurances about water rates — a complaint some suburban leaders made when they were pressured into joining the Metro Detroit regional Great Lakes Water Authority.

“They would not guarantee the rate reduction for more than the first year,” Wright said.

In response to questions, McCormick this week detailed to The Detroit News how her former department arrived at the $800 million figure. Projected savings were derived, she said in a statement, from updating Flint’s contract with the Detroit water system, changing the connection point between the two systems for greater efficiency and using the Flint city system as a backup.

Attempts by some Detroit area water officials to prevent Karegnondi’s creation likely increased Flint officials’ distrust of the Detroit water system. At the same time Flint officials were making their final decision on separation, Oakland County’s Water Resources Commissioner Jim Nash issued a press release arguing against the proposed move and urging Genesee County officials to come back to the table.

The crux of Oakland County’s argument seemed to center on how the loss of revenue from Flint and Genesee County would hurt the Detroit’s water system’s other customers.

“I don’t believe Oakland County residents should pay higher water rates and independent analysts have said this project costs too much and leaves the remaining water customers with higher bills,” Oakland County Executive L. Brooks Patterson was quoted as saying.

Cost estimates for building the Karegnondi system covering Genesee, Lapeer and Sanilac counties were also highly debated.

The Detroit Water and Sewerage Department projected the Karegnondi construction costs at $440 million, Wright said. The communities pushing for Karegnondi’s creation estimated the cost at $300 million. And the bid price came in at $285 million.

Wright argues the passage of nearly three years backs the case for the Karegnondi system.

“The reason I believe the $285 million figure is going to be solid ... is we’re nearing completion on the project, and we’re under budget,” he said about the system that is expected to be completed before year’s end.

Then-Flint Mayor Dayne Walling said city officials and then-Emergency Manager Ed Kurtz simply concluded the Karegnondi Water Authority was in the best long-term interest of their region.

“The projections from Flint’s finance director were the costs (offered by Detroit) would likely rapidly increase, and we would not have any involvement in setting those rates,” he said.

Then-State Treasurer Andy Dillon, eventually signed off on Flint’s request to join the Karegnondi.

In notifying Flint of his decision, he laid out his reasoning for approving the project.

They included “widespread support in the city,” including that of the City Council; support from the Michigan Department of Environmental Quality; and the hope it would “lead to future regional collaboration.”

But perhaps the most important rationale for a city with a recent history of not balancing budgets and stabilizing finances: “... your representations that this deal will lead to substantial savings for the city ... that are desperately needed to help with the turnaround of ... Flint.”

The lead contamination of Flint’s drinking water — caused by the state’s decision not to recommend immediate corrosion controls when the city switched to Flint River water in April 2014 — have raised questions about the role of Gov. Rick Snyder’s administration and its oversight of Flint while it was under a string of emergency managers. On Tuesday, Snyder’s office released a statement on the ultimate decision about the Karegnondi project.

“Genesee County and Flint leaders had been talking about moving away from the Detroit Water and Sewerage Department for years,” according to the statement. “They were committed to building their own pipeline ... and not be locked into a long-term agreement with the DWSD. This is reflected in the Flint City Council’s 7-1 vote on March 25, 2013.”

Otherwise, the governor is “focused on moving forward with helping Flint residents get the help they need now and long into the future.”

jlynch@detroitnews.com

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