...pay more for water; and more, and more, and more

A gross inequity exists in plans to disentangle Detroit from debt, in part by reorganizing the Detroit Water and Sewerage Department (DWSD).

As owner of DWSD, the City of Detroit is responsible for capital investments, including major improvements and replacements.  If that responsibility were being met, then perhaps the city would be justified in requiring lease payments from ratepayers as part of the conversion of DWSD to a regional authority.

But the city doesn’t have the cash or credit to rebuild DWSD, the city’s (purported) capital asset.

It appears to me that Emergency Manager Orr and other city leaders want to rely on the ratepayers’ credit worthiness to pay for capital improvements and replacements (as if the ratepayers were the owners), as well as requiring ratepayers to make lease payments to the city (as if they were renters).  Bear in mind that the system was never intended to be a cash cow for the City of Detroit. Rates were not supposed to include a profit margin.

Let’s face it, DWSD's infrastructure is old and worn out, with negative or negligible value.  No sooner is one cluster of belt presses, incinerators or water mains replaced than another breaks down.  Nick Carey of Reuters on December 16, 2013 quoted an Oakland County official, who said he had seen estimates of $20 billion to upgrade the system in coming years. 

The only value in this whole scenario is the revenue stream flowing from city (20%) and suburban (80%) ratepayers.

It’s one thing to require that ratepayers take over the responsibility to rebuild DWSD.  It’s something entirely different to also require that they make lease payments to the city for the “privilege” of assuming ownership responsibilities.