GLWA Bond Sale Reflects Oakland County Practices

The $309.1 million in cash savings and $251.8 million in new capital projects generated from the Great Lakes Water Authority (GLWA) $1.3 billion inaugural bond sale highlights how the formation of the authority is helping to bring fiscal responsibility to the water and sewer system, Oakland County Executive L. Brooks Patterson said today.

“When we negotiated the make-up of the GLWA board, we did so with the long-range vision that it would adopt Oakland County’s best fiscal and purchasing practices,” Patterson said. “This bond sale represents a significant savings to GLWA and the capital improvements could generate additional savings in the future.”

The $251.8 million in new capital projects will help replace aging infrastructure, some of which leaks into the ground causing a loss in revenue. As aging infrastructure is replaced, the GLWA will realize further savings in the future.

Under Patterson’s leadership, Oakland County led GLWA negotiations in 2015 to create the current structure of the GLWA board. There are six members of the board – four representing suburban interests and two representing Detroit. There is one each from Oakland, Macomb, and Wayne counties; one from the State of Michigan to represent ratepayers from the other suburban counties touched by the system; and two from the City of Detroit. The current chairperson of GLWA is Deputy Oakland County Executive Robert Daddow.

Major decisions, such as this inaugural bond sale, require a super majority vote of five out of six members. That means that if there is an issue before the GLWA board that is unfair to suburban customers, Oakland County only needs to partner with one other member to block it. General business before the board requires four out of six votes. In other words, Detroit must convince two suburban votes even on general business items.

“The GLWA board is delivering on the promise that it would function in a fiscally-responsible way, produce long-term savings in its budget, and operate as a regional entity for the benefit of all GLWA ratepayers,” Patterson said.

GLWA operates and manages all wholesale water and sewer lines in the suburbs that were previously part of the Detroit Water & Sewerage Department and ‘common-to-all’ assets such as the filtration and water plants, pumping stations and other assets providing joint functions for the benefit of all ratepayers. The City of Detroit is a wholesale customer of the authority like the suburbs. The city operates and manages all water and sewer lines within city limits including being responsible for collections from its own ratepayers.

 

 

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