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TIMELINE: The story of Detroit’s water

Freedom Fridays draw Detroiters weekly to protest water shutoffs. COURTESY PHOTO

Freedom Fridays draw Detroiters weekly to protest water shutoffs. COURTESY PHOTO

By Russ Bellant, Lila Cabbil, Sarah Coffey, Melissa Damaschke, Shea Howell, Kate Levy, Sylvia Orduno
Special to the Michigan Citizen 

This timeline is a work in progress, and an evolving research tool for individuals and communities working to establish and maintain equitable public water systems in Detroit and worldwide. This published piece has been excerpted from a longer piece, and does not represent the full history of Detroit’s Water and Sewerage Department. The goal of this excerpt is to contextualize the threats of privatization to the water system, which are likely imminent through the bankruptcy process, and to add context to Michigan Welfare Rights Organizations’ Water Affordability Plan.

For paper copies of the full timeline, or to contribute information, please contact Kate Levy at kateelizabethlevy@gmail.com.

For electronic access to the entire work-in-progress including sources, visit: www.docs.google.com/document/d/1HgB5xG-UUDGD3Ge9sfusnwq-kVAFdoNrOoiHi3gPYy8/edit?usp=sharing .

1701: Following the establishment of the City of Detroit, the supply of drinking water in Detroit and its surroundings evolved from individuals collecting water daily from the river in leather buckets, to horse-driven pumps distributing river water to homes through a small network of hollowed-out wooden logs.

1824: Governor Lewis Cass authorizes Peter Berthelet of Montreal to erect a pump at the foot of Randolph Street. Berthelet was granted a 99-year lease on the land under the condition that all residents may “take and draw water for their use and convenience.” Berthelet’s pump was in service until 1835, at which point it was “removed by order of the Common Council.”

1825: The city’s Common Council grants the “sole and exclusive right of watering the city of Detroit,” to Bethuel Farrand of New York State. Shortly after he initiates the venture, Ferrand transfers ownership of these rights to Rufus Wells. Wells’ names his operation “The Hydraulic Company,” and is granted a charter by the Common Council to supply the city with water until 1850.

1835-1836: Dissatisfied with Wells’ performance as the sole water provider, the City of Detroit’s electorate authorizes the sale of $50,000 in bonds to purchase The Hydraulic Company’s land and infrastructure. The city’s dissatisfaction with this private entity is related to poor water quality, inadequate supply and financial inefficiency.

1835-1851: The City of Detroit spends $175,898 taxpayer dollars to build a water infrastructure and to purchase land to sustain the infrastructure.

1853: The State of Michigan establishes a board of water commissioners under Public Act 90 of 1853.

1871: The State Legislature tries unsuccessfully to take over the Detroit water board by appointing new commissioners to a Public Works Department. Municipal Commissioners refuse to vacate their seats and offices, and in a split decision the State Supreme Court refuses to support the takeover, prohibiting the appointment of individuals to the Board of Water Commissioners by State Legislature.

 1873: The State Legislature authorizes the Detroit Board of Water Commissioners to levy a direct tax and build infrastructure outside of the city.

1900: The city of River Rouge becomes the first municipality outside of Detroit to receive service from the Detroit water system (Detroit Water and Sewerage Department: The First 300 Years).

1955: During a regional debate over whether DWSD should extend services further into the suburbs, DWSD’s manager, Laurence Lenhardt refuses to extend service to any more municipalities outside of the 45 already receiving water and sewerage from DWSD. Lenhardt warns financing suburban growth could take away Detroit’s resources, industry and residents.

Albert Cobo PHOTO COURTESY WALTER P. REUTHER LIBRARY

Albert Cobo PHOTO COURTESY WALTER P. REUTHER LIBRARY

Late 1955-1957: Detroit Mayor Albert Cobo, the National Sanitation Foundation, the Detroit Board of Commissioners and the Detroit Regional Planning commission support a regional water system, despite Lenhardt’s assertions. When Wayne County runs out of funds and faces numerous financial difficulties, Detroit comes to the rescue and purchases the system from Wayne County.

1960s: Macomb County Public Works Director Thomas Walsh acknowledges Macomb and Oakland County do not want to take on the debt and responsibility of building their own systems, and asks Detroit for help in building sewerage systems after officials halt new suburban developments for lack of proper sanitation systems.

1963: The Michigan Constitution is redrafted and enacted. Article VII, Section 25 states that “No city or village shall … grant any public utility franchise which is not subject to revocation at the will of the city or village, unless the proposition shall first have been approved by three-fifths of the electors voting thereon. No city or village may sell any public utility unless the proposition shall first have been approved by a majority of the electors voting thereon, or a greater number if the charter shall so provide.” This prohibits regionalization or sale of the Detroit Water and Sewerage Department without the consent of three-fifths of city voters.

1965: 1965 DWSD acquires the incomplete Southwest Water Treatment Plant in Allen Park, initially constructed with Wayne County millage funding. As construction founders, DWSD takes it off of Wayne County’s hands and integrates it into DWSD..

1974: The Environmental Protection Agency passes the Safe Drinking Water Act, and establishes its own guideline for water affordability: Access to water and sewerage should cost no more than 2.5 percent of a family’s income.

1977: The EPA sues Detroit for dumping toxic chemicals into the Detroit River, and Detroit enters a 37-

Over the 35 years the DWSD is under Federal Judge John Feikens’ control, the finances become bleaker, and the department enters into predatory interest rate swap agreements. COURTESY PHOTO

Over the 35 years the DWSD is under Federal Judge John Feikens’ control, the finances become bleaker, and the department enters into predatory interest rate swap agreements. COURTESY PHOTO

year period where a federal judge oversees its Water and Sewerage Department. When the department finally emerges, the city is under Emergency Management. The main catalyst of the DWSD’s violation is sewerage overflow. Suburban wholesale customer communities intervene in the case and fight to minimize their financial responsibility for funding the system. With no recourse, and no ability to fine these companies for activity that is already illegal, the DWSD infrastructure suffers. Over the 35 years the DWSD is under Federal Judge John Feikens’ control, the finances become bleaker, and the department enters into predatory interest rate swap agreements. Judge Feikens orders 83 percent of the cost for any combined sewer improvements must be covered by Detroit residents and the remaining 17 percent covered by suburban wholesale customers.

 1980: Detroit develops a wholesale rate model to increase accuracy for suburban water customers, who pay their municipalities to purchase the water from DWSD as wholesale customers. The model, perfected by Black and Veatch, an international engineering firm that performs water rate services nationally, studied the system’s performance for a period of years to perfect the rate structure. The rates account for distance from the pumping station, elevation changes among the customers, and peak hour/peak day demands. This system is still in place today and each spring, the DWSD conducts forums on new rates established by this system for suburban municipalities’ public officials.

Feikens made raciall

Feikens made racially-derogatory comments about Coleman Young’s (pictured) ability to administer the water department. COURTESY PHOTO.

1984: The Detroit Free Press publishes an article in which Judge Feikens makes racially-derogatory comments about Mayor Coleman Young’s ability to administer the water department. The city moves to disqualify Feikens as the federal overseer of the department, on the grounds the judge’s statements to the press “have been viewed by members of the public as showing his bias or prejudice against the mayor and other city officials. The complaint also exposed non-judicial negotiations with private contractors, despite his criticisms of Young’s selection of contractors. The next year, the city’s motion is denied.

1993: State Senator David Honigman introduces Senate Bill 85 at the request of Oakland County Drain Commissioner George Kuhn. The bill proposes to create an elaborate, suburban-controlled regional water authority. The bill quickly falters after Kuhn’s factual fallacies are exposed, but similar bills are reintroduced in 1995, 1997, 1999, 2001-2002 (see below), with more allies from Wayne and Macomb counties joining in, notably Warren Mayor Mark Steenberg and Livonia Mayor Jack Kirksey.

2000s: After half of a century of disinvestment and deindustrialization, Detroiters face 40,000 water shutoffs per year for unpaid bills, and pay between 3.1 percent and 21 percent of their incomes for water and sewerage service. (Detroit Water Affordability Plan, 2005. Prepared by Roger Colton, 2005.

2002: Republican Leon Drolet introduces House Bill 5788, which would require each regional water and sewerage system, such as the DWSD, be incorporated as a regional authority, and be administered, operated and controlled equally by each municipality, village or township involved, regardless of previous financial investment in system development and maintenance outside of paying normal wholesale rates.

Warren’s city attorney disrupts the mayor of Detroit’s press conference with a theatrical serving of a lawsuit against Detroit Water and Sewerage Department. The lawsuit, the second of its kind from Warren, complains of unexplained rate hikes, despite the fact each year DWSD provides to wholesale customers detailed independent audits of their capital improvement programs as related to rates, and despite the fact that Warren does not offer the same courtesy to its retail customers. During the same year, Warren charges customers 125 percent more than DWSD wholesale rates, for which they offer many contradictory reasons throughout the course of the HB 5788 hearings, and the lawsuit hearings.

HB 5788 is never passed.

Meanwhile, Judge Feikens contacts a senior federal judge in Chicago who recommends a private search firm to find a director for the Detroit Water and Sewerage Department. Through this means Victor Mercado is hired, whose previous work experience included 12 years for the private water companies including Thames Water, United Water Company, and Jamaica Water Supply Company (DWSD In the Flow Newsletter, Summer 2002. Feikens becomes an employee of the Federal Court, not the City of Detroit. This contract is extended in 2006 through 2009.

Feikens then claims authority over the entire department and began approving contracts without City Council knowledge, including a $150 million meter contract.

2004-05: The Michigan Welfare Rights Organization, represented by Michigan Poverty Law and Michigan Legal Services, commissions economist Roger Colton to write the first draft of a Water Affordability Plan. A well-researched plan that looked to other cities who adhered to the EPA’s Clean Water Act 2.5 percent income guidelines (see above), the plan sets forth a feasible business model to enable customers to pay no more than 3 percent of their yearly income on water and sewerage bills. This was to be accomplished by charging all City of Detroit retail customers a fixed, affordable meters rate. The plan also ensures the department’s increasing solvency by enabling more people to pay their bills on time. Colton projected the plan would generate $13 million in its first year of operation.

2005: Judge Feikens and the Board of Water Commissioners authorize a $150 million water meters contract projected to cost every Detroit ratepayer $22 a year for 30 years.

2006: Detroit City Council and the Board of Water Commissioners approves the Water Affordability Plan, and the Victor Mercado agrees to budget $5 million to go towards the plan. DWSD and the City’s legal department begin to discuss ways to implement the plan. (City of Detroit Office of the Auditor General memorandum Re: Detroit Residential

In June, one week before the plan is scheduled to be implemented, MWRO puts out a call to members to write letters to Victor Mercado to execute a memorandum of understanding with the third party of his choice to implement the plan, as he has not demonstrated any progress in doing so with the authors of the plan.

1974 Safe Drinking Water Act establishes its own guideline for water affordability: Access to water and sewerage should cost no more than 2.5 percent of a family’s income.

 2007: Victor Mercado finally attends a City Council meeting in January and in response, Roger Colton victor mercadosubmits a revised Water Affordability Plan. Coined “Detroit Residential Water Assistance Plan” (DRWAP), Colton’s pared-down, but specific plan suggests a program that lasts a minimum of five years, and offers a credit to individuals based on their yearly water bill and their income. Affordable percentages of income ranged between 3 percent and 4 percent, depending on income bracket, up to 150 percent of the Federal Poverty Level.

DWSD enters into a memorandum of understanding with the Detroit Department of Human Services.

The Detroit Department of Human Services re-structures Colton’s plan, and dismantles Colton’s sustainable income-based credit system that would achieve the EPA-recommended affordability levels. Instead, the plan spreads its resources to those living at 200 percent of the federal poverty level, limits its reach to only those facing impending shutoffs, and only earmarks eight months for the program’s initial life-span.

During DWSD rate increase hearings, city council agrees to swap the originally agreed upon $5 million funding to be filtered into DRWAP from various non-rate revenue sources to a lower rate increase. In exchange for $2.5 million in extra funding, all DWSD customers were saved from an across-the board increase of 9.4 percent. Rates were instead increased by 7.4 percent, and DWSD was now responsible for generating only $2.5 million for DRWAP.

The DWSD begins an initiative to install “smart meters” on all occupied homes. (DWSD Fall 2008 newsletter) While these meters are meant to eliminate estimated bills, customers still report false bills, and other residents report being billed for previous residents’ under-estimated payments Few initiatives are made to install these meters on vacant homes with water leaks in basements.

2008: By May, DRWAP has only enrolled 843 customers, and spent $1 million of the $2.5 million seed money on these accounts.

In June, the memorandum of understanding between the Department of Human Services and DWSD expires. Although DWSD decides to budget for another year of the program, the MOU is never extended, and the two parties operate under an expired document. Opt-in donations made through DWSD billing become the sole source of funding for the DRWAP program in the heat of the nation’s foreclosure crisis. No money is budgeted for DRWAP for the fiscal year of 2009-2010. 2009: 2,047 customers have been enrolled in DRWAP, and the turn-over of customers who default on their agreements is high.

The People’s Water Board Coalition is founded. The coalition asserts water is held in the public trust, is a human right and should be affordable to all. The organization bridges conservation ethics with the values of income equality and advocates for access, protection and conservation of water. The group, still active, organizes against water privatization, hosts conferences and water-conscious tours of the city, educates communities about rain barrels and alternative storm-water receptacle sites and provides educational material on conservation tactics. Importantly, the coalition also shadows the Board of Water Commissioners and DWSD for transparency and accountability. The coalition has also been at the forefront of the fight against water shutoffs. Original founding members include the Rosa Parks Institute, Sierra Club, East Michigan Environmental Action Council, Michigan Emergency Committee against War and Injustice, Detroit Black Community Food Security Network, Michigan Welfare Rights Organization, Detroit Green Party and AFSCME Local 207.

2010: City Council commissions an auditor general to report back on DRWAP, the accounts holding funds for DRWAP and the DWSD’s agreement with DHS. The auditor reports an alarming number of mis-steps and breaches of contracts on both sides.

After 33 years, Judge Feikens leaves the bench, and the DWSD case from 1977 is re-assigned to U.S. District Court Judge Sean Cox, who was appointed to the bench by President George W. Bush.

2011: Judge Sean Cox orders a new regionalized governance structure for DWSD, requiring a super-majority vote of water commissioners — including at least one suburban community representative — for all major decisions. This means that the suburbs have an unprecedented say in the day to day operations of the water department. Growing tension between suburbs and the city over the Kilpatrick scandals and suburban municipal governments tacking on hidden inflations to water rates prime the suburbs to seek regional control.

Water shutoffs continue with dwindling options for water affordability assistance.

2012: DWSD cuts catalyze a AFSCME Local 207 strike after workers receive a 10 percent pay cut and are threatened with 80 percent job losses to be replaced by private contractors. Judge Cox orders workers back to their jobs.

2013: The 1977 EPA case is finally closed on March 27, and control of the Detroit Water and Sewerage Department would have gone back into city control, if Michigan Governor Rick Snyder had not appointed Kevyn Orr as the city’s emergency manager two days prior, on March 25. Control of the Detroit Water and Sewerage Department lands directly in Kevyn Orr’s hands

The Detroit Department of Human Services is eliminated, and human service programs for Detroit are handed over to the Wayne Metropolitan Community Action Agency, an organization that is not required to spend as much on Detroit services. With no agency left to execute DRWAP, water affordability programs trickle to a complete stop.

In April, Detroit enters into a two-year, $5.6 million contract with Homrich, a demolition company, to carry out 70,000 shutoffs in 730 days. This is sponsored by Rodney Johnson of Grosse Pointe. This amount is slightly more than the amount DWSD promised in 2006 as seed money to execute the water affordability program in 2006.

2014: The DWSD’s 2014 budget for water operation and maintenance costs is $149 million and sewerage is $217 million. Its budget for “debt service” (bond loan payments and exorbitant interest rates on the loans) is $182 million for water and $237 for sewerage. The DWSD claims that “bad debt” from customers in 2014 amounts to $90 million, and nearly one-third of these accounts are high-dollar commercial and municipal accounts.

The DWSD announces a spring and summer water shutoff quota for citizens 45 days and over $150 delinquent with their payments. The department boasts that it will cut water to 3,000 households per week.

Water rights activists argue shutoffs to impoverished families are directly servicing bank fees, and instead of shutting off low-income families, the emergency manager should re-negotiate bank fees.

Water rights advocates also argue corporate accounts should be prioritized over residential shutoffs, and should perhaps pay a deposit for service, as this will generate more revenue much more quickly than shutting off the water of residents

The water department claims both commercial and residential shutoffs will be put on hold if the responsible party disputes their bill. The ability for residents to dispute their bills is extremely limited, due to lack of access to the knowledge, resources and advance warning needed to file a dispute.

In June, with no affordability plan in place for residents who can’t afford their water bills, the Detroit City Council approves a rate hike of 9 percent to residential customers and receives a 5 percent salary raise from the emergency manager.

After regional negotiations fail and attempts to create a new regional water and sewer entity with Oakland and Macomb Counties in the context of bankruptcy fall through, Emergency Manager Kevyn Orr solicits bids to privatize the department.

Federal Judge Cox (see 2010-2013, above) is appointed to mediate a new settlement through the bankruptcy. Those confidential mediation proceedings continue at this time.

On July 9, ex-City Council President Sheila Cockrel, is featured on WDIV’s Flashpoint, and in upholding traditional Detroit values from 1701 (see 1701, above), claims “People can go down to the river and pick up a bucket of water. That’s your right.”

On July 21, in the presence of Bankruptcy Judge Rhodes, the deputy director of the Detroit Water and Sewerage Department agrees to halt shut-offs for 15 days. Despite this promise, the department allows Homrich contractors to pursue “illegal turn-ons” and commercial customers full force, and the department shuts off an entire apartment buildings because they fall under the commercial category of customers.

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