A federal judge breathed life back into the stalled water talks between bankrupt Detroit and suburban counties Thursday with an order for a mediator to help the parties resolve their differences.
Earlier this week, creation of a regional water authority between Detroit and Oakland, Macomb and Wayne counties appeared dead without the order for a federal mediator.
Such a spinoff could give the counties more control they’ve long sought over the the management of the sprawling Detroit Water and Sewerage Department, which serves more than 4 million customers and is one of the country’s largest public utilities, and give Detroit much needed cash to pay off its debts.
Leaders of the suburban counties don’t like a proposal by Detroit emergency manager Kevyn Orr to privatize the utility and lease it to a new authority for $47 million per year over 40 years.
But in his order Thursday, U.S. Bankruptcy Judge Steven Rhodes ordered closed-door negotiations headed by Chief U.S. District Judge Gerald Rosen, the Detroit Free Press reports. Rosen, Detroit’s lead bankruptcy mediator, will be responsible for appointing the water mediator and determining a timeline for negotiations.
“I have a sense that this bankruptcy offers a unique opportunity for the creation of a regional authority and if we do not take advantage of this unique opportunity, that opportunity, in all likelihood, will be lost forever,” Rhodes said Thursday morning.
Wayne County officials welcomed the revival of the water talks, but lawyers for Macomb and Oakland counties, where an alternative system is being explored, balked.
Joseph Fischer, a lawyer for Oakland County, said “revenues must be kept in the system” and should not be diverted to other Detroit services. He also said Detroit hasn’t negotiated in good faith.
“Oakland County respectfully cannot or will not make critical billions of dollars decisions that will impact millions of citizens without the opportunity to perform due diligence,” he said.Heather Lennox, the attorney who is representing Detroit, said that despite a cloud of distrust that has hung over talks, the city still believes a regional water authority is not only in Detroit’s best interests, but in the best interests of ratepayers as well.