Source: Nathan Bomey, Christina Hall and Bill Laitner, Detroit Free Press, April 14, 2014
The City of Detroit has ended negotiations with Wayne, Oakland and Macomb counties over the potential spinoff of the city’s water department as a regional authority, but the city and counties signaled they haven’t ruled out a deal entirely. After Wayne County last week asked Judge Steven Rhodes to appoint a mediator to resolve the dispute between Detroit and the counties, the city asked Rhodes to reject the request. Detroit bankruptcy attorneys said in a court filing that they have ended talks with the counties, leaving the possible privatization of the system as the city’s main focus….
Editorial: What we’d lose by privatizing Detroit’s water system
Source: Detroit Free Press, April 6, 2014
Detroit’s fast track to private water risks high rates, bad service, experts say Oakland County seeks alternatives to ‘monopolistic’ Detroit water and sewer The meltdown over the future of the Detroit Water and Sewerage Department is Exhibit A in southeast Michigan’s epic regional dysfunction. Everyone knows the system has to be “rationalized” in the city’s municipal bankruptcy — not just leveraged as an asset, but changed to manage debt and long-term maintenance better. The solution that Detroit emergency manager Kevyn Orr favors is best for all players: an authority that would give the suburbs a say in the way the system is managed, and give the city much-needed cash for relinquishing its ownership.
Detroit’s fast track to private water risks high rates, bad service, experts say
Source: Brent Snavely, Detroit Free Press, April 6, 2014
Detroit risks higher water and sewer rates, poorer service and a mountain of administrative headaches if it insists on an aggressive timetable for choosing a private company to run the city’s sprawling system, experts told the Free Press. The city, as part of its plan to restructure $18 billion in debt and emerge from bankruptcy, asked private companies in March to provide initial proposals by this week and will ask some from the pool to submit binding bids by June….
Detroit seeking offers for private management of water and sewerage department
Source: Brent Snavely, Detroit Free Press, March 25, 2014
With negotiations with suburban counties deadlocked, the City of Detroit has issued a request for offers from private companies to operate and manage the Detroit Water and Sewerage Department. Detroit emergency manager Kevyn Orr, who is steering the city through the largest municipal bankruptcy in the nation’s history, said the city has a duty to its creditors to explore all options, especially since the city’s proposal for the creation of a regional authority with Oakland, Macomb and Wayne counties is stalled.
Detroit Water, Sewer Bonds Downgraded Deeper Into Junk
Source: Brian Chappatta and Chris Christoff, Bloomberg, March 25, 2014
Detroit’s water and sewer bonds were dropped five levels to CCC from BB- by Standard & Poor’s — its fifth-lowest grade — citing a possible default as the city goes through the largest U.S. municipal bankruptcy. … The city’s water system, which serves about 40 percent of Michigan’s population, accounts for $5.8 billion of Detroit’s debt. Orr has proposed leasing the system to a new regional public authority to help pay for services. Surrounding counties have so far balked. ….
Detroit Threatens to Cut Water Service to Delinquent Customers
Source: John Eligon, New York Times, March 25, 2014
…Although the department said its effort to collect on delinquencies was not related to Detroit’s bankruptcy, the water department has been an issue in the process. The city has been looking to shed some of its $18 billion debt by privatizing some of the system. Kevyn D. Orr, the city’s emergency manager, has proposed folding Detroit’s water department into a regional authority that would handle water service for Wayne County, which includes Detroit, and the wealthier suburban counties of Oakland and Macomb. Those counties have been resistant to the idea in part because of the fear that they will be caught up in Detroit’s delinquencies. Bill Nowling, a spokesman for Mr. Orr, said the water department’s efforts to collect back payments did not affect the city’s push for a regional authority. The authority would give the counties more control in recovering unpaid bills, Mr. Nowling wrote in an email. Besides the effort to create a regional authority, Mr. Orr has also been looking into selling the water department or having an outside company manage it. The city put out a request last Friday seeking bids to buy or manage the department, and Mr. Nowling wrote that interest was strong. …
Detroit Seeks Proposals to Privatize Its Water System
Source: Matthew Dolan, Wall Street Journal, March 25, 2014
This bankrupt city is seeking proposals from private companies to run and potentially buy its regional water and sewer system as talks to lease it to the city’s suburbs have stalled. The move to at least partially privatize one of the nation’s largest water systems comes as the city considers unloading assets to finalize its debt-cutting plan, which is expected to be voted on by creditors this spring. …. Privatizing water and sewer service in southeast Michigan could provide a test case for advocates who argue the private sector would bring greater efficiency and needed improvement to aging systems nationally. Opponents of such privatization efforts fear rate increases and question turning a public entity into a profit-making enterprise….
Detroit water deal not close, Oakland County says
Source: Lauren Abdel-Razzaq, Detroit News, February 11, 2014
Suburban leaders say they’re far from agreeing on joining a regional authority that would run Detroit’s Water and Sewerage Department, despite pressure to reach a deal to facilitate the city’s bankruptcy restructuring. Top aides to Oakland County Executive L. Brooks Patterson made their position clear during a meeting Tuesday night with officials from Macomb and Wayne counties to discuss the proposed authority. Their concerns include forcing suburban customers to bear the brunt of future costs associated with the water and sewer system. Oakland County doesn’t feel it has to make a quick deal with Detroit, deputy executive Gerald Poisson said….
Detroit Suburbs Balk at Spinning Off Water Works to Help City
Source: Chris Christoff and Brian Chappatta, Bloomberg, January 28, 2014
Time is running out for Detroit Emergency Manager Kevyn Orr to persuade suburban leaders and bondholders to help the city wring cash from its water-and-sewer system, a key to resolving its bankruptcy. The Detroit-owned utility serves 127 area communities that now pay for its services. Talks to lease the system to a new regional authority that would generate revenue for municipal services are bedeviled by mistrust and the cost of upgrading a network that serves 40 percent of Michigan’s population across 1,079 square miles (2,795 square kilometers). …
Regional water deal elusive for Detroit emergency manager
Source: Nick Carey, Reuters, December 16, 2013
In bankruptcy and looking for cash, Detroit would like to lease its water utility to raise as much as $9 billion to fund basic services long term, but talks with neighboring suburban counties are stalled. County officials say they are stuck over the price tag and estimates of repair costs, likely delaying plans by Detroit’s emergency manager to deliver a financial restructuring plan early next month. … A key sticking point is the estimate of what it would cost to repair or replace underground pipes and other Detroit Water and Sewerage Department infrastructure. Gerald Poisson, deputy executive for Oakland County – home to 1.2 million DWSD customers – said preliminary financials he had seen estimated it would cost $20 billion to upgrade the system over two decades. Rates would have to quadruple to fund repairs, he said. …