Matthew Dolan, and Kathleen Gray

Detroit Free Press

Sticking with Detroit would allow federal dollars to help improve Flint's water distribution system

Residents would also gain access to low-income assistance program to help pay water bills

Detroit-based water system would help Flint pay off its $7M annual debt to another water authority

Proposed water source deal for Flint still needs official city, county, state and federal approvals.

Gov. Rick Snyder praised the city of Flint’s plan to sign a long-term deal with Detroit's water system after the city's departure from it four years ago set in motion one of the nation’s worst drinking water crises.

Snyder told reporters Tuesday that he was pleased to see the tentative agreement reached between city, county, state and federal leaders to provide new financial incentives for Flint to return for the next 30 years to the Detroit system now known as the Great Lakes Water Authority.

“That’s the success we like to see when people work together like that,” Snyder said. “This is a major step forward in terms of providing a better water supply for Flint, for the county and for the Great Lakes Water Authority.”

Flint Mayor Karen Weaver made her recommendation Tuesday, which marked a reversal from the city's original plan to detach from the Detroit-based water system and move to a new regional authority in the hopes of keeping a lid on spiraling costs.

The first-term mayor needed to reevaluate her original decision as a condition of receiving $100 million in federal funding to address the Flint water crisis.

The mayor's endorsement to stay with the Detroit-based Great Lakes Water Authority (GLWA) received backing of representatives from Genesee County, the competing Karegnondi Water Authority (KWA), Snyder's office and federal Environmental Protection Agency. The proposed deal will still need formal approvals from several city, state and federal government bodies, officials said.

"It was important that we took our time to get this right," Weaver told reporters at a news conference at Flint city hall.

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One goal, the mayor said, remained above all else: protecting public health.

The mayor said that city, county, state and federal leaders worked on a possible solution for securing the future water supply by analyzing a dozen options over the last six months.

The decision to remain on Detroit's water system is also the best financial move for the cash-strapped city after a series of missteps, officials said. Flint could have been on the hook for millions of dollars in debt to pay for a new regional water system known as the KWA, even if it left the system. But those financial obligations will be covered by Detroit's regional water system, GLWA, under the proposed deal.

Staying with the GLWA and using the Karegnondi as a backup will cost an estimated $269 million over 20 years. That's compared with options up to $482 million under the most expensive alternative, according to an internal analysis completed for the city.

Still, before the decision is final, the mayor said she wants to hear from residents.

A town hall meeting will be held at 5:30 p.m., Thursday at House of Prayer Missionary Baptist Church in Flint to answer questions from the public about the proposed deal. An MIRS News/Target Insyght poll last year found that more than 36% of Flint residents wanted to stay on Detroit water while 40% said they didn't know enough to say.

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Flint's three-year drinking water crisis erupted when the city under the rule of a state-appointed emergency manager switched from Detroit water to the Flint River in April 2014.

At the time, the state Department of Environmental Quality failed to require the use of corrosion control chemicals -- which the department later acknowledged was a grave mistake -- as part of the treatment process.

The corrosive water caused lead to leach from joint pipes and fixtures, resulting in a spike in toxic lead levels in the blood of Flint children. The city switched its water supply back to Detroit in October 2015, but a risk remains because of damage to the water distribution infrastructure.

Officials also are exploring possible links between the river water and outbreaks of Legionnaires' disease tied to at least 12 deaths. The state attorney general has filed criminal charges against several city and state employees in connection with the water crisis.

Weaver said Tuesday she didn’t want another switch that could stoke fears and anxieties among the city's 100,000 residents over water quality.

Today, state and federal officials say Flint's water meets drinking water standards, but residents are encouraged to use filters because of the lingering threat of spikes in lead levels. More than 800 water service lines have been replaced, but the city expects to examine a total of 18,000 for possible replacement over the next three years.

The plan unveiled Tuesday was also designed to keep a lid on large water rate increases in the future and plow outside funding as well as cost savings into the improvement of Flint's water distribution system. Estimates peg the city's water losses at 35% to 40% of all of the supply brought into the city through leaks and other problems.

Officials at the GLWA said they expect water rate increases to be about 4% a year. The system also plans a reexamination of its rate structure, which could reduce water bills in Flint, officials said.

The GLWA took over operations for the Detroit water system at the beginning of this year. It provides wholesale water and waste water services to 127 municipalities in seven southeast Michigan counties and about 3.9 million customers.

Water system officials said they could not guarantee future water rates for Flint residents, who pay some of the highest rates in the country. But they expect those rates to remain stable this year and experience only modest increases during the life of the 30-year contract.

Flint's water woes started in 2010 when the Karegnondi Water Authority incorporated to provide and distribute water from Lake Huron to Flint and other surrounding communities in Genesee County and beyond. The City of Flint signed on to the new system in 2013 and pledged to help cover the construction costs.

The authority began a $270-million project to build new pipelines and pumping stations. Flint intended to buy water from the KWA and treat the water at a city plant.

But in the midst of an acrimonious dispute over water rates, Flint left the old Detroit system early before the KWA was complete. That early exit prompted the city to rely on poorly treated water from the Flint River.

If Flint had tried to pull out of the KWA today without a deal, Genesee County officials have said financial consequences could have been catastrophic for the city. The KWA, which would be stuck with Flint’s share of the debt for the $285-million project, would have been able to seize the city’s water treatment plant and other assets, plus 25% of the city’s constitutional revenue-sharing payments from the state, county officials said.

The new deal offers additional benefits, the mayor said.

“Sticking with GLWA allows us to use federal dollars from the Drinking Water Revolving Fund Program to update the city’s damaged water distribution system, which is aging and deteriorating,” Weaver said Tuesday. “This option would also result in the 72-inch transmission line being returned to the city, and residents would also gain access to a low income assistance program to help pay their water bills."

Flint however remains ultimately responsible for its 28-year, $7-million average annual bond obligation to the Karegnondi Water Authority starting this November.

But the burden of that debt service will be completely offset through credits Flint will receive from GLWA. Those credits will be based upon transfer of the city's raw water rights to GLWA. The Great Lakes Water Authority will also secure a new backup supply for its customers through the KWA, officials said.

"For decades, the utility struggled to find a solution to create affordable redundancies in the system," GLWA Chief Executive Officer Sue McCormick wrote in a letter to her customers Tuesday.

Officials at KWA say they don't expect to take a major financial hit from the loss of one of its biggest expected customers if Flint's proposed move goes through.

"The way this is structured, it doesn't affect KWA," said Jeff Wright, the KWA chief executive and Genesee County drain commissioner.

Initial reaction to the deal appeared positive in Lansing.

Senate Majority Leader Arlan Meekhof, R-West Olive, said the number of key leaders signing on to the plan was encouraging.

"I haven’t reviewed it yet," Meekhof said. "I’m hopeful that it’s a good sign that they’ve come to a consensus on a good product to make sure the citizens are served safely.”

Senate Minority Leader Jim Ananich, D-Flint, praised the concept of the deal as he awaited details.

"We have a reliable water source, a source we’ve used for 40 years, except for the couple of years that the emergency manager switched us over to Flint River water. It’s reliable. We have a backup source now with KWA," Ananich said. "It seems like this is a move for long term stability."

But if the parties had done this four or five years ago, Ananich said, "all these problems wouldn’t have happened. It’s really frustrating because it shows you the failings of the emergency manager law and the fact that people don’t have a voice."

He added that "there still will be skepticism back home because there have been so many lies told to them. But overall, this is positive for us to have a reliable water source.”

Contact Matthew Dolan: 313-223-4743 or msdolan@freepress.com. Follow him on Twitter @matthewsdolan.