Flint Michigan Will Go Bankrupt without Water Agreement

Bankruptcy Attorney

The Mayor of Flint, Michigan has faced a number of administrative troubles over the past few years. The troubles surrounding the city’s water began in 2011. When faced with a general fund deficit, the city council employed cost cutting measures that lead to tainted drinking water that contained lead and other toxins. The city’s water supply was changed from Lake Huron and the Detroit River to the Flint River, but wasn’t treated correctly resulting in lead from aging service lines to leach into the Flint Water Supply. In order to rectify the issue, city officials outlined a 30 year contract with Great Lakes Water Authority. Many officials think that the contract is a bad deal for residents who could see substantial rate increases.

In an effort to ratify the long-term water agreement, Mayor Karen Weaver claimed this week that the city will likely go bankrupt if the deal doesn’t go through. While the debate rages the city is currently sourcing its drinking water from Karegnondi Water Authority and is spending $444,000 dollars on monthly bond payments. If the Great Lakes deal is approved, the authority would issue credits to offset Flint’s water costs.

The battle over approving a water contract landed on the bench of US District Judge David Lawson this month as attorneys for the state asked the judge to enter an order requiring the city to ratify the agreement without regard to the City Council’s objections. It’s unclear when he will issue a ruling.

Only time will tell if Flint is able to rectify it’s water situation long term, or if the issue will exacerbate the other issues that Flint is facing including huge legacy costs, declining property values, a massive deficit, and looming structural deficit. It’s entirely possible that the city could end up having to declare bankruptcy despite the outcome of the water agreement.

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