December 19, 2018
Good Morning! In this morning’s eBlog, we report on the physical and fiscal challenges to a municipality to recover from a state-caused physical and physical crisis?
Out Like Flint? In a city where 41.2 percent of the residents live in poverty, the annual family median income is $26,300, and where utility rates are among the highest in the country, water and sewer bills create an ever-present burden for Flint’s 99,000 residents. Citizens have had to borrow hefty sums to keep their service from being shut off, and sometimes illegally turn the water back on themselves, fearing that Child Protective Services might remove children from a home without working taps and toilets. In Flint, the city’s fiscal crisis preceded, but set the stage for the lead-contamination drinking water crisis that has exposed most of the city’s 9,000 children to the potent neurotoxin, which is linked with reduced IQ, behavioral problems, and kidney damage. The city’s physical and fiscal challenges are intertwined: Flint’s problems include crumbling infrastructure and a dwindling tax base, which have led the city to rely increasingly on its water and sewer revenue to keep its coffers afloat. The moves have helped drive water rates in Flint to the highest in the country, averaging $75.84 a month, according to a report from the nonprofit group Food & Water Watch. Total utility bills, including sewer service, are about twice that.
Now, in the wake of trials and intergovernmental challenges, and stalwart pressure from Flint Mayor Karen Weaver, is making clear her city’s readiness to assume full control of its drinking water system: the City of Flint and the Michigan Department of Environmental Quality have reached an agreement to create a schedule for the state to gradually draw back, especially in the wake of Mayor Karen Weaver’s FAST Start program, which began two years ago in March: crews from area companies have completed excavation at 19,364 homes. As of last April, 10,581 homes had been checked. According to reports from contractors, crews have identified copper service lines at a total of 8,964 homes, 1,567 homes have been identified as having lead and/or galvanized service lines. That means, to date, service lines to 7,795 homes have been identified as lead and/or galvanized and have been replaced, including 1,567 homes found this year. The efforts are a part of Mayor Weaver’s plan to determine if water service lines are made of copper, and replace service lines made of lead and galvanized steel. She has been determined to restore safe, clean drinking water to Flint residents.
The road back to solvency in the wake of the end of a state takeover via the appointment of an imposed emergency manager, who, notwithstanding the state’s role in creating the health crisis, current Chief Financial Officer Hughey Newsome credits with helping the small city to get its financial house in order; nevertheless, CFO Newsome said Flint’s fiscal future remains uncertain, an uncertainty that could potentially be magnified by the city’s drinking water crisis that resulted from a series of decisions made while the city was under state imposed emergency management: “The after-effects of the water crisis–including the dark cloud of the financials–will be here for some time to come…We’re not out of the woods yet, but I don’t think emergency management can help us moving forward.” Indeed, the lead in the city’s drinking water struck just as the city was striving to recover from massive job and population losses following years of disinvestment by General Motors. Nevertheless, the city amended its budget procedures and modified both its pension liabilities and post-retirement health care benefits, managing to stay out of filing for chapter 9 municipal bankruptcy.
By the end of FY2010, the City’s annual deficit had grown to nearly $15 million, according to the state; state officials accused the city’s leaders of failing to stick with its previous deficit elimination plans and going further into the red—a deficit which grew nearly 25% by the following year when the state usurped local authority via the appointment of an emergency manager—one who created a strategic plan, a five-year financial projection, fund balance reserves, including a budget stabilization fund and mandated the funding of post-retirement healthcare and pension benefits. Nevertheless, it seems there are indelible physical and fiscal omens of fiscal distress. Mayor Karen Weaver’s proposed budget for 2018-19 plans for a more than $276,000 general fund surplus; however, those projections point to a more than $1.75 million potential deficit in 2019-2020—a deficit projected to grow to more than $8 million by 2022-23.
The Council began, notwithstanding that deficit, to discuss nearly $1 million in upgrades to Flint’s water pollution control facilities, road construction, and its biennial budget. A key issue, water, remains a central focus: Flint’s existing water pumps, valves and check valves in the east pumping station are old, outdated, and in urgent need of replacement, according to a Flint utility maintenance supervisor John Florshinger, who notes such improvements “will increase reliability and reduce operational and maintenance costs: they are guaranteed not to clog and will prevent sewage backups into basements.” But finding the resources will be a challenge in a city where its reputation gained in the wake of the drinking water crisis has led to falling assessed property values, in no small part attributable to its high crime rate—and the fear for families which might be considering moving to the city, which is experiencing a steady, declining school population, but one of the highest crime rates in the nation for a city of its size.
A key goal, thus, for Flint, is to have all of its lead-tainted service lines replaced by the end of next year—something vital to restoring trust in its leaders—but a massive challenge, which will require excavation of some 18,313 galvanized or lead pipes—an effort for which the finish line is set for late next year—a fiscal and physical challenge which Flint officials have hailed as the most ambitious timeline to replace pipes in the nation (a similar program in the state capitol of Lansing took 12 years).
Science & Governance, & Trust. Despite all, city residents are still advised against using Flint’s tap water even though testing has shown lead levels have receded below federal action standards for about two years: experts have recommended against letting residents resume drinking Flint’s tap water until after all of the corrosion-weakened lead and iron water service lines are replaced. In an intergovernmental fiscal and physical crisis which led Michigan Attorney General Bill Schuette to file criminal charges against members of Gov. Rick Snyder’s administration, including involuntary manslaughter, and water regulators with the state’s Department of Environmental Quality; two state impose emergency managers appointed by Gov. Snyder have also been criminally charged. That is, the city’s water crisis has led to political trust erosion and an increased lack of trust of government officials and even water quality experts that some Flint officials said may take a generation or two to fix.
One of the most critical persons to alleviating the severe threat to the city’s children, Virginia Tech water expert Marc Edwards, described the pipe excavation and replacement as a “monumental achievement for the city of Flint and state of Michigan,” adding: “That said, it is unrealistic to expect that achieving this milestone will win hearts, minds, or trust.” That was a comment with which Mayor Weaver concurred: “Since 2014 the residents have struggled with…not being able to trust the water and the government, understandably.”