Water Cash Flows Out Of Detroit

Bankrupt Detroit is in even more trouble now that neighboring communities are firing the city as their water provider.

"The steady drip of Detroit's financial woes is turning into a gusher as the city braces to lose one of its most reliable sources of revenue: contracts with surrounding communities for the city's water supply," Fox News reported. 

The suburbs have long relied on Detroit to provide water from Lake Huron. Flint, which is breaking away from Detroit on water issues, had a deal with Detroit that had dated back to the '60s, the report said. 

Concerned with Detroit's aging infrastructure, Flint, Genesee County, and other jurisdictions recently decided to cut out the middleman, the Fox report said. They proposed to build a $300 million pipeline to get water out of the lake. 

As the New York Times put it: "The fresh water in Lake Huron is still plentiful, but the customers are having second thoughts about Detroit and its vast, aging water system."

Detroit's financial situation also played a role in the decisions to break away. 

"Some local officials, like those in Genesee County, think they will be better off on their own for economic reasons. Not only do they want to dodge Detroit’s future rate increases, but in an age of climate change, they also hope to harness Lake Huron for what they call the blue economy — investments and jobs in agribusiness, food processing and other industries that use lots of water," the Times reported. 

The developments will take a financial toll on the cash-strapped Motor City. 

"For Detroit, Flint's decision means losing its second-biggest customer and drying out an already-depleted revenue sheet," the report said. "Losing Flint and Genesee is expected to force Detroit to take a $22 million-a-year hit."

Water issues will play a critical role in deciding Detroit's financial future. In fact, "the fate of Detroit’s water department could become the biggest issue holding up a speedy exit from bankruptcy," Michigan Radio, part of the NPR digital network, recently reported.

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