Promised water infrastructure investment comes only in drips

Most customers don’t consider what lies beneath the Great Lakes Water Authority’s service area, until it doesn’t work anymore. Besides well-known fiascos like the Flint crisis, the GLWA’s mains are estimated to leak almost a third of its water before it ever reaches a faucet. (Photo courtesy of SEMCOG)

The lead-laced drinking water that led to tragic consequences in Flint was supposed to serve as a wake-up call for Michigan and the nation, a warning that our neglected, aging infrastructure could not only result in dramatic interruptions in basic municipal services, but might prove hazardous or deadly for residents.

After the full extent of the crisis began to surface in September 2015, Gov. Rick Snyder formed a commission to examine Michigan’s neglected infrastructure and proposed a state fund to upgrade its so-called hidden infrastructure, including pipes that in some places were up to 100 years old.

But among the first opportunities to demonstrate a new path forward, as embodied by the new Great Lakes Water Authority in southeast Michigan, presents a murky picture.

The GLWA represented a historic separation between the city of Detroit and the suburbs after 180 years of Detroit handling all municipal sewer and water services for the sprawling southeast Michigan region.

The six-member GLWA board (four from the suburbs, two from Detroit) spent 17 months making logistical and financial plans, including a 5-year budget for infrastructure improvements. What they produced was an outline that, on the surface, will allot $54 million a year more on improvements than what the depleted Detroit Water and Sewerage Department had projected to spend.

A $54 million increase sounds substantial, but it’s not much against a problem that could require an investment of $14-$26 billion more in GLWA communities over the next two decades, according to research compiled by the Southeast Michigan Council of Governments (SEMCOG). In fact, prior to a September budget amendment, the projected boost in new investments was half that much.

Two years ago, SEMCOG reported that leaders across the region had barely made a dent in a burgeoning infrastructure crisis, which was first outlined in a 2001 estimate by the council, indicating that when interest, inflation, cost overruns and other factors are considered, up to $104 billion in investments were needed by 2030.

In recent months, suburban officials said they were rescuing a DWSD regional system plagued by financial “fiascos” that led to a loss of $1.5 billion over eight years. GLWA advocates also said that Detroit had been falling behind in prudent infrastructure fixes.

Now, the GLWA hopes to take a different approach, engaging in new cost-saving methods and efficiencies that will reduce the need for expensive underground construction projects. Downsizing the entire sewer/water network is the goal.

Yet, at the current rate, it could be decades before the GLWA reaches the industry standard, as its most aging equipment – thousands of underground pipes, pump stations, valves and reservoirs -- is modernized. This massive waterworks system includes the largest sewage treatment plant in North America, five drinking water plants and hundreds of thousands of component parts. With a reach of more than 1,000 square miles, it serves 4 million water and sewer customers in more than 120 communities. That represents 39 percent of the Michigan population and makes the GLWA one of the largest regional sewer/water systems in the nation.

That means residents will continue to contend with flooded streets and basements during heavy rains, the result of an archaic drainage system; sewage spills and overflows into area waterways, including Lake St. Clair; and other manifestations of the neglect of the system, including waste, via leakage, of its central resource – water – approaching one-third of its treated output.

Guaranteed funding, but for what?

In the September 2014 announcement of a tentative pact to form the GLWA – within the second paragraph of a four-page statement – officials boasted that “the agreement also guarantees funding to rebuild the system’s aging water infrastructure.”

But after two years, the outlook for improvement is dim. According to Mike Nystrom, executive director of the Michigan Infrastructure and Transportation Association (MITA), an advocacy group for construction contractors, at the current rate it might take dozens of years to sufficiently upgrade infrastructure in Metro Detroit and across the state.

“It is incremental baby steps, that’s for sure. We haven’t seen a large leap toward improvements,” Nystrom said.

A large leap may be a bridge too far. Brian Baker, a sometimes dissenting voice on the GLWA board, said the new regional authority inherited the DWSD system’s substantial debts and limited resources to improve sewer/water infrastructure.

“The condition of DWSD was not structurally or financially sound when the GLWA assumed control. Debt payments consume half of all water department revenues, which leaves very little for much-needed capital improvements in the system,” said Baker, finance officer for the city of Sterling Heights.

It’s not just southeast Michigan’s problem. On the water side of the equation alone, a study released in April by MITA estimated that the entire state needs to invest up to $15 billion in additional drinking water infrastructure projects over two decades, nearly $1 billion a year, to catch up.

Much of that outdated and faulty infrastructure lies within the GLWA service area, which stretches from the Downriver area of Monroe and Wayne counties, south of Detroit, through the northern and western suburbs up to Flint. In addition to the GLWA’s faltering progress on a wider scale, cities, townships and villages are struggling to catch up with their communities’ needs.

In their 2013 report card on the nation’s infrastructure, the American Society of Civil Engineers gave Michigan water systems a “D” grade and the sewer networks a C, mostly due to “crucial funding challenges” that lead to further degradation. (To be sure, the rest of the country isn’t in much better shape; overall, the U.S. earned only a D+.)

Yet, GLWA officials claim their share of Michigan’s overall problem is rather small compared to that of Detroit and other municipalities, which bear a big burden due to inadequate service pipes to individual homes and buildings. The GLWA is mainly responsible for far-reaching transmission lines, pipes with a diameter of 24 inches or more.

Some 60-70 percent of all pipes in southeast Michigan were built prior to 1970. More than a quarter were installed in the 1930s or earlier.

A system for a different future

The GLWA emphasis on cost savings includes basic efficiencies and refinancing past bond issues, plus a dramatic move to shut down outdated portions of the network without interrupting services.

The authority hopes to close one, eventually maybe two, of the system’s five water treatment plants. Due to population loss and a general decline of water use via conservation, the sewer/water facilities are under capacity and can be shrunken substantially to a more manageable network of pipes and pumps, according to officials.

GLWA’s CEO, Sue McCormick, said the agency is pursuing a process of “selectively investing” in infrastructure rather than maintaining a system planned for decades-old population projections that did not come to pass.

“It’s a 180-degree change in strategy compared to the past,” McCormick said “But … we’re absolutely committed to making all the investments that are needed.”

‘Same old Detroit bull’

After decades of contentious relations between Detroit and its suburbs, relentless criticism of the Detroit water department was the driving force behind numerous suburban efforts to take over the southeast Michigan system.

When the 2013-15 negotiations over the GLWA took a bad turn, Oakland County Executive L. Brooks Patterson threatened to walk out and form an Oakland-only system. Again, when the process hit a significant snag, Patterson said he was “disgusted” and added “It’s the same old bull that got Detroit in trouble. I want to help Detroit, but I don’t want to become Detroit in that way of doing business.”

But as the process moved forward, suburban officials confidently predicted that they could manage the sprawling system much more efficiently than the city, including a herculean effort to rebuild a network of nearly 1,000 miles of regional sewer/water lines that had been neglected for decades.

During the bargaining, media coverage focused on the hardball politics, with the suburbs fighting to gain majority control. Infrastructure needs were barely mentioned.

Then came the Flint debacle. With city residents forced to rely on bottled water for drinking, bathing and cooking, that changed the focus. Two polls conducted last spring showed that the public suddenly viewed infrastructure as the top problem facing the state and the Detroit area.

But as the intense public spotlight on the Flint water crisis slowly receded, the GLWA focus in recent months returned to keeping sewer and water bills in check.

After decades of DWSD neglect, Baker, the Macomb County representative on the GLWA board, said that effectively dealing with limited finances while addressing outdated infrastructure across the region may be “like turning the Titanic around.”

That April MITA report warned that the longer action is delayed, the more expensive repairs and maintenance become, and the more elaborate the scope and cost of future replacement projects.

Out of sight, out of mind – until it fails

Failing underground infrastructure, while not as apparent as roadway potholes and crumbling bridges, presents numerous hardships for the public.

The MITA study, compiled by the Public Sector Consultants research group in Lansing, summarized the situation this way: “Failure to adequately plan for and sufficiently fund critical water infrastructure in Michigan can lead to major crises affecting tens of thousands, if not millions, of the state’s residents.”

In southeast Michigan, among the nagging problems in the GLWA sector that present a widespread public impact are: numerous leaks in water mains; flooded streets during heavy rains; routine water main breaks and boil-water alerts; sinkholes and raw sewage spills that result from pipe breaks; and sewer overflows into rivers, lakes and streams.

Nonetheless, GLWA board Chairman Bob Daddow said the authority has made good progress by ensuring that all federal clean-water permits are in place. As a result, said Daddow, Oakland County deputy executive, sewer investments will begin declining by 2020. The finance plan calls for a reduction in sewer projects of about two-thirds from 2019-21.

In addition, Patterson boasted earlier this month that putting “Oakland County practices” to work will save $309 million for the GLWA over 20 years due to a municipal bond refinancing.

Money literally down the drain

The GLWA’s attempt to turn things around still faces several logjams: a politically driven 4 percent cap on annual revenue increases; fixed costs that swallow up 90 percent of the overall budget; a long-term downward trend in water usage due to residential and industrial conservation; lingering DWSD debts and unpaid bills; and the upcoming loss of Flint and Genesee County as major customers.

But no deficiency may be more headache-inducing for officials than the leaky pipes. Water mains throughout the GLWA service area have become so inefficient due to cracks and failing seams that about 30 percent of all drinking water pumped on a daily basis leaks into the soil, failing to reach the faucets of customers, according to the GLWA board. Within the city of Detroit, that figure rises to about 40 percent. The added expense is paid by GLWA customers on a local, not regional, basis.

The decline in state and federal assistance for sewer/water projects over the past two decades makes the funding gap even more ominous.

However, officials at all levels unexpectedly may have found a life raft to stay above their political worries. Public pressure for a 21st century waterworks system may be receding quickly, as the Flint crisis fades into the past. A new poll by Lansing-based EPIC-MRA found that just 5 percent of Michigan voters now list infrastructure as a top problem facing the state. And a just-completed online SEMCOG survey, an unscientific poll, revealed that most respondents believe southeast Michigan sewer and water infrastructure is in good shape.