DETROIT Oct 30 Detroit Emergency Manager Kevyn
Orr has asked suburban counties surrounding the city to pay $9
billion over 40 years to assume partial control of the Detroit
Water and Sewerage Department (DWSD), an offer that Oakland
County Executive L. Brooks Patterson called unacceptable.
Oakland County is home to around 1.2 million of the DWSD's
roughly 4 million customers.
"That offer is DOA," Patterson said. He said that the first
news he had of Orr's offer came through a Detroit News article
on the subject.
Patterson added that Detroit has failed to maintain its own
infrastructure and 40 percent of the city's residents do not pay
their water bills.
"To ask us here in the suburbs to bail them out to the tune
of $9 billion is basically an insult," he said.
Orr's spokesman, Bill Nowling, declined to comment on the
proposed deal as negotiations with the counties are ongoing.
The water department is one of the assets the city is
looking to monetize as it attempts to restructure $18.5 billion
in debt and liabilities in bankruptcy court.
Orr's $9 billion proposal asks for annual payments of $100
million that would eventually rise to more than $200 million per
year, the Detroit News reported.
The Detroit Water and Sewerage Department serves Detroit and
127 suburbs, which accounts for about 40 percent of Michigan's
In his June 14 report to the city's creditors, Orr proposed
leasing the department to a new Metropolitan Area Water and
Sewer Authority that would be controlled by the department's
Oakland County's Patterson said that at this point, Michigan
Governor Rick Snyder and the state legislature should step in to
resolve the issue of a regional water authority.
"For something so big and important that affects more than
four million people, this calls for the state to step in," he
said. "This is more than we can do as a county."
The department has about $1.2 billion earmarked for repairs
to the system's aging infrastructure. Though the city has
stopped paying certain debts, it has kept current on more than
$5 billion in water and sewer bonds that Orr has determined are
Several private equity firms have also shown interest in
purchasing the department from Detroit if they could raise water
rates, Kenneth Buckfire, an investment banker hired by the city
to advise its restructuring, said Thursday during court
testimony as part of the eligibility trial to determine whether
Detroit can restructure its debts in bankruptcy court.