Water and Sewer Can Help Detroit Exit Bankruptcy, Judge Says

Detroit may be crumbing, but the city's water and sewer system just might be a way to help the bankrupt city pay down some of its $18 billion debt.

Federal Judge Steven Rhodes, who is overseeing Detroit's historic bankruptcy case, ordered the city and three neighboring counties on Thursday to mediate over the issue of setting up a regional water authority.

Detroit provides water and sewer services to millions of customers in its home county of Wayne and neighboring Oakland and Macomb counties. Detroit's emergency manager, Kevyn Orr has pushed the concept of leasing the city's water and sewer departments to a regional Great Lakes Water Authority for a hefty annual fee.

Officials in Macomb and Oakland counties have objected, but Rhodes said the idea had merit. "The creation of a regional water authority is not only in the best interest of the city but in the best interest of the customers of the water department," the judge said.

The city's bankruptcy presents a "unique opportunity" for a regional authority that may be otherwise lost forever, Rhodes said.

Detroit had solicited entities interested in bidding to operate and manage the services and received 41 initial responses earlier this month. Rhodes was holding a hearing on Thursday mainly on unresolved objections by Detroit creditors to a key supporting document for the city's debt adjustment plan.

- Reuters