What Does the Water Deal Mean For Rate Payers?

Stephen Henderson talks with Macomb County Executive Mark Hackel about the new Great Lakes Water Authority deal, his role in it, and what he thinks could have been done better.

Last week, under federal mediation, the Great Lakes Water Authority voted five-to-one to approve a $50 million annual lease for the next 40 years.  The contract also includes nearly $50 million a year for pension costs and to fund customers who are unable to pay their water bills.  Hackel was the lone dissenter in the vote. 

Some of the main points that emerge from their conversation are:

• Poor communication:  Hackel says he was unable to communicate with the municipalities in Macomb County that their buy water from Detroit, and was unable to verify information between parties.  The negotiation was conducted under a federal gag order, so he could not speak to constituents or outside parties about it.  He feels that this was an “absurd” way to conduct a business transaction, and says that it plays into distrust between citizens and the government.  
• Little justification:  Hackel says that the $50 million amount is arbitrary, and that it could have been a different number just as easily.  He says that it was based on assumptions made from unvetted information, and that this was another communication problem. 
• Unfair tactics:  Hackel talks about the pension part of the deal.  He says that pensioners were given one week to decide, and were effectively threatened into agreeing.
• Consequences for rate payers:  Hackel says that this deal will result in higher costs for all rate payers, because of the arbitrary additional cost of the loan.  He says that he cares about all rate payers, not just his constituents in Macomb County. 
• Water Crisis:  Stephen asks why we do not handle water differently.  He points out that if someone does not pay their property taxes, their children are still allowed to attend public school, and asks why we treat water as a commodity instead of as another necessity and primary function of local government.  Hackel says that he does not have an answer, but that this is a question that we should be dealing with, rather than making decisions that could heighten problems by raising water rates.  

Click the audio link above to hear the full conversation.