Genesee County Hired Sam Riddle to Assist in DWSD Pipeline Negotiations

The Flint Journal reported on May 14, 2010 (here) that Sam Riddle served as a political consultant to the Genesee County Drain Commission for nearly two years, from March, 2007 to November, 2008. Riddle, who faces prison under federal corruption charges, was reportedly paid $2,000 per month, plus expenses. According to John O'Brien, Director of Water and Waste Systems, Riddle's consulting company, Meridian Management Systems, was hired to assist Genesee County in its negotiations with the City of Detroit in connection with  a new 30-year water supply contract. No contract was ever signed. 

Genesee County has since formed a new water authority (the Karegnondi Water Authority) and announced plans to move forward with the installation of a new $600 million water pipeline and water treatment plant. 

Update: On May 20, 2010, the Flint Journal reported (here) that Genesee County's contract with Sam Riddle included services related to its new pipeline.  

Update: On June 4, 2010, the Flint Journal reported (here) that Genesee County paid the now-imprisoned Sam Riddle $44,000 in consulting fees.  However, in response to a FOIA request for documentation concerning the scope and nature of Riddle's consulting services, the Genesee County Drain Commissioner (Jeff Wright) reported having no documentation. Adding now to the mystery of Riddle's role, if any, in Genesee County's (unsuccessful) negotiations with DWSD are reports (here)  that the Jeff Wright was cooperating at the same time with the FBI in its efforts to build a public corruption case against Sam Riddle.  Hmmm. . . Was Genesee County's consulting agreement with Riddle legitimate or part of a sting operation?   

Update: On October 6, 2010, Sam Riddle was sentenced to 37 months in federal prison for his role in the Synagro bribery scandal. 

Plans for New Water System Gain Momentum in Genesee County

Plans for a new water authority and a proposed $600 million pipeline project in Genesee County appear to be gaining momentum, despite some who have declared the project "reckless folly." 

The new Chairman of the Genesee County Board of Commissioners, Jamie Curtis, has come out squarely in favor of the plan advanced last year by Genesee County Drain Commissioner, Jeff Wright. 

"I'm not going to settle for anything less than for us to complete that waterline," Curtis said of the long-talked-about project. “It is priority-one."

 Click here for the rest of the story from the Flint News.

Genesee County Proceeding with Plans for New Water System, Pipeline

Genesee County is reportedly proceeding with plans announced earlier this year, and reported here, to construct a new $600 million water transmission pipeline and water treatment plant.

Under the auspices of the new Karegnondi Water Authority, Genesee County Drain Commissioner Jeff Wright is spearheading this effort, which is aimed at giving Genesee and Sanilac Counties, along with the cities of Lapeer, Imlay City, and Flint more control over their water rates. Mr. Wright has touted significant ($200 million) savings for Genesee County residents, but a recent article in The Davison Index notes that those savings are projected to be "in the long run, after a slight increase over the course of a 25-year bond to pay for the pipeline."

Comment: Unless I'm misreading things, this means the projected savings for Genesee County residents won't materialize for more than a generation. Isn't that like promising a tax cut . . . that doesn't kick in until 2034?

Genesee County Pipeline Declared "Reckless Folly" by Times-Herald Newspaper

In an opinion piece entitled "Pipeline has the look of a boondoggle," The Times-Herald in Port Huron asserts that "Genesee County's proposal to spend $600 million on a water pipeline from Lake Huron is reckless folly."

The Times-Herald takes issue with Genesee County's rationale for the new pipeline, including capacity, cost, and reliability.

• "Capacity is not an issue. The Detroit water line, which went into use about 35 years ago, was built to carry as much as 1.2 billion gallons of water each day. In actuality, demand has been far less."
• While Genesee County has complained that Detroit has doubled its water rates in the past seven years from $9 million to $18 million, "At that rate, how many years would it take to earn back [the] $600 million [Genesee County proposes to spend on a new water line]?
• "It's disturbing that Genesee County officials would complain of service disruptions . . . without mentioning how these were caused by a massive power outage in the [S]ummer of 2003 that affected much of the Midwest and Northeast."
  

Click here to read the rest of this article.

Genesee County Withdrawal Permit Approved

On August 28, 2009, the MDEQ approved Genesee County's request to withdraw upwards of 85 million gallons per day from Lake Huron.

With an approved water withdrawal permit in hand, Genesee County can proceed with its announced plans to construct a new pipeline and water treatment plant under the auspices of the newly-formed "Karegnondi Water Authority." Approval of the withdrawal permit, may also spell doom for DWSD's Flint Loop project, which is designed to extend the DWSD system into Genesee County.

Commentary: On the other hand, having a permit in hand gives Genesee County increased bargaining leverage should it be interested in resuming talks with DWSD over sharing the cost of the Flint Loop. It appears that those discussions were active until about March (as reported here), when Genesee County submitted its water withdrawal permit application.

Right now, it will be 3-5 years of subsurface investigation, design, and construction before Genesee County will see a single gallon of water. Meanwhile, DWSD's Flint Loop project is already to proceed -- the design is complete, and a construction management contract (CS-1492) is already in place. Moreover, DWSD already has water treatment plant (Lake Huron WTP), with a current capacity of 400 million gallons per day, that was designed for expansion, and can accommodate increased water demands in excess of 1 billion gallons per day with additional pumps.

Does Genesee County really think it will save money by spending an estimated $600 million on a separate pipeline, water treatment plant, and related water transmission and distribution infrastructure? Really?

City of Lapeer Agrees to Back New Water Authority

On August 17, 2009, the Lapeer City Commission approved a resolution supporting formation of a new water authority. Approval of the resolution does not commit the City of Lapeer financially to any of the proposed $600 million cost of a new system. The resolution simply gives the City Manager authority to participate in discussions with Genesee County about the proposed Karegnondi Water Authority.

Genesee County Launches Website for New Karegnondi Water Authority

In support of his effort to kick-start a new regional water authority, the Genesee County Drain Commissioner recently launched a new website for the nascent Karegnondi Water Authority -- www.Karegnondi.com. Included on the website is the executive summary of a feasibility study prepared by Wade Trim and Rowe Professional Services.

Genesee County Responds to DWSD's Criticism of Plan for New Water Authority, 85 Million Gallon Withdrawal Request

On July 13, 2009, John F. O'Brien, Genesee County's Director, Division of Water and Waste Services, provided a 10 page, point-by-point response and refutation of DWSD's June 29, 2009 letter, which is critical of the County's plans to form a new water authority.

DWSD Opposes Genesee County Water Plans

Genesee County's ambitious plan to build its own $600 million water system is encountering push back from the Detroit Water and Sewerage Department. No surprise.

In a June 29, 2009 letter (below), Interim-Director Pam Turner lays out DWSD's opposition to Genesee County's plan. Among the objections, DWSD contends Genesee County's proposal violates the evaluation criteria in the Great Lakes Compact, because it fails to address the availability of existing water supply systems (ie., the DWSD system).

In particular, DWSD has already undertaken plans to improve the supply of drinking water to Genesee County.

Both the Flint Loop and North Oakland Transmission projects were designed to increase supply and provide redundancy for Genesee County and the City of Flint. DWSD has already spent $28.6 million designing these two projects, and awarded a construction management contract. Theses projects are "shovel ready," but require the City of Flint to sign a new 30 year contract with DWSD, particularly in light of previously reported declines in water revenue. Removing the City of Flint from the calculation of water rates would increase water rates for the remaining ratepayers at least 6%, according to DWSD's estimate.

Its also appears that Genesee County's plans caught DWSD a bit flat-footed. Ms. Turner complains that when DWSD and Genesee County met on March 10, 2009 to discuss a cost-sharing plan, Genesee County failed to mention that it had already filed its application for a withdrawal permit a month earlier.

However, Genesee County Drain Commissioner, Jeff Wright, has not been secret about his plans for constructing a new water authority, as reported here. Mr. Wright's response to Pam Turner's 8-page letter was outlined in a July 6, 2009 article in the Flint Journal (here).

The MDEQ will receive public comments on Genesee County's withdrawal application until July 15, 2009, and then is expected to make a decision by August 22, 2009. Given DWSD's opposition, a delay in MDEQ's decision is likely.

Genesee County Proposes $600 Million Water Pipeline, New Water Authority

A month after applying to withdraw up to 85 million gallons a day from Lake Huron, Genesee County today laid out an ambitious plan to construct its own water supply system. The projected cost is $600 million.
 
Genesee County Drain Commissioner Jeff Wright told representatives of communities in Genesee, Lapeer and Sanilac counties at a meeting on June 25th that construction on the pipeline project could start by this time next year. He added that the chance to build the pipeline might never come again.

"If we don't take this opportunity -- in 30 years there won't be another opportunity to build this," Wright said. "Interest rates are favorable right now and there are government programs that could help pay" the cost of the borrowing.

The $600-million construction estimate includes the cost of several pumping stations, an inland reservoir in Lapeer County, twin pipelines along part of the route and water treatment facilities in each of the three counties. Wright said the pipeline construction would create more than 500 jobs for three to five years.

The pipeline would be owned by a new Karegnondi Water Authority, which could include the city of Flint, the city of Lapeer, Sanilac County, Lapeer County, Genesee County and St. Clair County.

Communities that agree to join the authority would pay a proportional share of the cost of building the pipeline, according to Wright. He said his goal is to establish the authority within 120 days, complete engineering, design and surveying work in the next nine months, and start construction of the buried pipeline by the time next year.

[Note: Although Oakland contributed $125,000 to a joint study looking at the feasibility of a new regional water authority in 2007, it does not appear that they are ready to join Genesee County as part of the new Karegnondi Water Authority.]

Cheboygan Drain Commissioner May Fight Genesee County Water Withdrawal Request

The Detroit News reports that the Cheboygan County Drain Commissioner, Daniel Lennox, has threatened a lawsuit in response to Genesee County's petition with the MDEQ to withdraw up to 85 million gallons a day from Lake Huron.

The News does not report the legal basis for the threatened lawsuit.

Maybe the Cheboygan County Drain Commissioner, who writes the blog -- "Fire Dennis Lennox" -- has too much time on his hands and should be looking for something else to do.

[Update: A June 11, 2009 editorial in the Flint Journal calls Daniel Lennox's threatened lawsuit "absurd".

"Lennox's wild-eyed claims either demonstrate a fundamental misunderstanding of the [Great Lakes Compact], or, as Genesee County Drain Commissioner Jeff Wright said on Monday, the lawsuit threat is political grandstanding."

If Cheboygan County makes good on its threat, we'll post a story on the factual and legal basis of the lawsuit. ]

Genesee County Applies for Lake Huron Water Permit

Despite recent talks between DWSD and Genesee County about sharing the cost of a future water system improvements, it does not appear that Genesee County has abandoned its interest in a separate water system, as discussed in an earlier posting.

Earlier this week, the Genesee County Drain Commission applied to the Michigan Department of Environmental Quality (MDEQ) to withdraw as much as 85 million gallons of water per day from Lake Huron.

"This (85 million gallon) volume would be adequate to meet the anticipated needs of Lapeer, Genesee and Sanilac counties and the city of Flint for the next several decades," said Jeff Wright, Genesee County's drain commissioner.

DWSD officials are downplaying this development, but it does call into question whether or not DWSD can or will proceed with a major expansion of its transmission capacity into Genesee County. The Flint Loop project, announced last year, would add miles to DWSD’s water transmission capacity northwards into Genesee County. However, decreased water demand has also led to lower water and sewer revenues.

[Update: There will be a 45 day public comment period, through July 15, 2009, on Genesee County's application. There is more information at the MDEQ's website. ]

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DWSD, Genesee County Discuss Sharing Cost of Water System Improvements

Reprinted with Permission from Michigan Construction News

Dragline - Editorial Comment & News Analysis
March 13, 2009
By Guy Snyder

Keeping Things Fair

Good drinking water at a reasonable price has been fundamental for civilization for thousands of years. Arguably water, sewage control, and roads were the underpinnings of the Roman Empire. Unfortunately for the Detroit Water & Sewerage Department there are signs its regional system is beginning to crumble. This week in Flint its representatives worked hard to patch things up but we suspect the numbers aren’t in their favor.

* * *

Drops in the Barrel

Meetings were held this week between Genesee County Drain Commissioner Jeff Wright and officials from the Detroit Water & Sewerage Department. They focused on the future of the county’s drinking water, as well as the city of Flint’s. There’s been considerable displeasure expressed about DW&SD water and sewage rates, especially for its outlying communities. If you recall, even Mr. Wright complained last fall about a then newly instituted 15% price hike.

This time around the DW&SD has come up with a deal. If Genesee County will pay part of the construction cost of additional water supply lines, it will be given “special status.” This would qualify it for a major price cut — possibly as much as 50% — for water.

Yesterday the drain commissioner’s office reported it was still crunching the deal’s numbers. Even if they add up to Genesee County’s favor today, we still think the DW&SD’s critics have been making valid arguments. In the long run it may well be in the county’s best interest to opt out and build a modern water supply system of its own.

In our November 18, 2008, Dragline, we discussed Mr. Wright partnering with John P. McCulloch, water resources commissioner for Oakland County, to create a regional water planning group called the Karegnondi Water Authority. Its mission has been to investigate another water system that would not also serve Genesee and Oakland counties, along with the city of Flint, but Macomb and Lapeer counties as well.

A consultant was hired last fall but not named. It still hasn’t been named. The mystery firm was supposed to have delivered a report a couple of months ago. But we haven’t seen it. Our latest research indicates a final draft is slated for release next week. Okay, we’ll look for it. Surprisingly, the Karengnondi Water Authority has yet to establish a web site. (Does it even have a staff?) Must be the final draft is to appear on Mr. Wright’s web site. Or would it be Mr. McCulloch’s?

Don’t you love governmental transparency?

Even so, back in November the general news media was broadcasting a project estimate of $350 million for the new water supply system. The comments came anonymously from the usual “government sources.” The figure was supposed to cover a water treatment plant, 60 miles of water transmission tunnel and main, and related support facilities. The system would be designed to draw as much as 150 million gallons per day.

Genesee County had already purchased a 230 acre site with a 700 foot long shoreline on Lake Huron, north of Fisher Road, in Sanilac County. The properly had formerly been owned by Detroit Edison.

This week no money has been mentioned about what Genesee County would pay for the DW&SD’s new water supply lines. Still, the cost of the entire proposed system has been pegged at $750 million. Presumably the county would have to pay for the portion that traverses Genesee County. It wouldn’t surprise us, though, if it turned out to be a capital investment close to the entire price of a new, independent system.

If it is, participation by Mr. Wright would require a deeper plunge into Genesee County’s pocket. That’s because the cost of the Karengnondi Water Authority system mentioned above would be split by a minimum of four counties. Perhaps even five ways, if the city of Flint is included.

The decision’s not up to us. But even without looking at the DW&SD’s “offer,” if we were the Genesee County Drain Commissioner we’d be strongly motivated to reject it.

The manner in which the deal’s being presented by the general news media arouses suspicion. What may seem a favorable break on water rates today could disappear after the new DW&SD water lines are finally in the ground. We also suspect Mr. Wright and the city of Flint will find greater respect for their concerns from the Karegnondi Water Authority than they currently do from the Detroit Board of Water Commissioners.

We mentioned last fall’s 15% increase. In late January of this year the water commissioners approved wholesale rate increases averaging 8.9% for water and 2.4% for sewage for its suburban customers, including Mr. Wright. The increases are to take effect on July 1^st if they win the approval of the Detroit City Council. The council was supposed to take them up yesterday but our deadline for this column closed before we could find out if it did.

In case you missed our explanation last fall, Karegnondi was the name the Petan Indians gave to Lake Huron. It was used in the first known comprehensive map of Michigan and its Great Lakes, drawn in 1656 by Nicholas Sanson, the royal geographer of France.

Michigan Construction News is published by Guy Snyder (Snytco, Inc.) every Tuesday and Friday, and provides news about upcoming construction projects, and an editorial called the "Dragline." A summary of each edition is also available to those who subscribe. Michigan Construction News is supported by advertisers and by "Friends of Michigan Construction News." I look forward to reading Guy Snyder's twice-weekly newsletter, and encourage you to read and support this valuable news resource. Click here for more information about becoming a supporter of Michigan Construction News. - Peter Cavanaugh