Tuesday, May 26, 2015

Water deal on the line

The deal to create a regional water authority for southeastern Michigan is in trouble, according to published news reports. The City of Detroit's bankruptcy plan called for such an authority to be created no later than June 14. Macomb County Executive Mark Hackel doesn't appear inclined to go along with it.

If Hackel doesn't like the deal, that's between him and the people of Macomb County. I'm okay with this deal falling apart.

If there is no deal on a regional water authority then there is nothing to prevent the City of Detroit to retain ownership of that portion of water system that is within its city limits but sell the suburban portion of it. Such a sale would not only remove the water system's debt from the City's books, it would likely also leave us with more than $1 billion in cash.

The cash from such a sale could then be used to pay down some of the other debt that Detroiters carry - either debt from the City of Detroit itself or from the Detroit Public Schools. Either way, paying down our debts would enable us to lower our property taxes.

And lower property taxes - either as reduction in debt service levied by the City of Detroit or a reduction in what the Detroit Public Schools levy - would be welcome in a city like Detroit which has the highest taxes in Michigan.

If Hackel isn't happy with the regional water deal, that's between him and the people of Macomb County. I simply hope that Mayor Mike Duggan, Councilman Gabe Leland, and the other members of the City Council use this opening as a chance to advance the interests of our residents.

Let the deal fall through, if Hackel continues to object.

Sell the portion of our water system that is in the suburbs to any number of private investors.

Use the proceeds from such a sale to pay down debts - for either the City of Detroit or the Detroit Public Schools.

Once the debt is paid down, lower the debt service levy on Detroiter's property taxes.

The choice is clear. The only question that remains is: what will Detroit's leadership do?
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