Flint Seeking Water Infrastructure Loan

TUESDAY, JUNE 28, 2022


The City of Flint in Michigan is planning to request nearly $12 million for the Drinking Water State Revolving Fund to complete the next round of upgrades on its water supply infrastructure. The loan, intended to help water suppliers meet the safe requirements of the Safe Drinking Water Act, will go towards the City’s Cedar Reservoir and Pumping Station.

The Cedar Reservoir holds excess water that the city can tap into if there is a disruption in the system, such as a major water main break or a problem distributing water from the Great Lakes Water Authority.

“We don't even know if we will make the grade, but we have to do an application,” Michael Brown, Director of the city’s Department of Public Works, told the Flint City Council last week. “That's a 20 million gallon facility. We can only put about 18 million in it before it starts spilling water in different places because of some cracks, etc.”

According to reports, the council approved a resolution that would allow the city to move forward in applying for the loan. However, several council members expressed concern that a loan could send high water rates higher.

Councilman Quincy Murphy of the 3rd Ward noted that it was similar to the water crisis money, but “they’re going to end up having to give it back to us to pay for the water bill.” Councilman Dennis Pfieffer of the 8th Ward reportedly theorized a water shutoff moratorium played a role in the lack of funding for the repairs.

“Why should the people who pay have to now take on a $12 million loan, because of all this,” he said. “It's not fair.”

Brown reassured the council and public that “our water is safe to drink, now,” but said the repairs are long overdue.

“It’ll improve the quality of water in that once we get the new main taken care of, then there shouldn't be any main breaks on there for the next 30 to 50 years easily,” he added. “So that improves quality, because it keeps pressure in the lines.”

Drinking Water State Revolving Fund

Earlier this year, the U.S. Environmental Protection Agency issued a memorandum for $43 billion in water infrastructure through the bipartisan infrastructure law to deliver clean water and replace lead pipes, especially in disadvantaged communities.

The memo, "Implementation of the Clean Water and Drinking Water State Revolving Fund Provisions of the Bipartisan Infrastructure Law," was issued March 8 and will act as a guide for state, local and Tribal partners to work collaboratively. It also outlines requirements and recommendations for the Drinking Water and Clean Water State Revolving Funds (SRFs).

According to the EPA’s release, the majority of water infrastructure funding from the bipartisan infrastructure law will go towards this funding. The memo provides information on guidelines on how the EPA will award and administer these grants.

The memo fact sheet outlines the key priorities for the SRF grants:

  • Provide flexibility to meet local water needs;
  • Increase investment in disadvantaged communities;
  • Make rapid progress on lead service line replacement;
  • Address PFAS and emerging contaminants;
  • Support resilience and one water innovation;
  • Support American workers and renew the water workforce;
  • Cultivate domestic manufacturing;
  • Fully enforce civil rights; and
  • Refine state SRFs to build the pipeline of projects.

The agency states that it will be working with state co-regulators, Tribal partners and stakeholders on next steps. Additionally, it will provide training and technical assistance to support the development of intended use plans that identify priority projects for SRF funding, with a goal of expeditiously investing in the communities.

History of the Water Crisis

Flint’s drinking water crisis began in April 2014, when the city chose to switch its water source from Detroit’s water supply to the Flint River as an interim solution while a pipeline to carry water from Lake Huron to the communities while the newly formed Karegnondi Water Authority was being built.

Water from the Flint River was not treated with corrosion-control agents, and reportedly began to corrode the city’s aging pipes. Drinking water in many homes was contaminated with lead, leading to a deadly outbreak of Legionnaires’ disease, and causing a public health crisis.

The state did not publicly acknowledge the possibility of lead contamination in Flint until September 2015; the city switched back to pretreated water from Detroit in October 2015.

By January 2016, the National Guard and state police started delivering bottles of water door-to-door. By this point, the crisis was estimated to cost more than $1.5 billion to fix, and already had reports of 43 people having found elevated levels of lead in their blood.

In September, a $9 billion water infrastructure bill was passed in the U.S. Senate, with hundreds of millions allocated for improvements in Flint, as well as other cities with potential drinking-water contamination hazards. When broken down, the bill allocated $4.5 billion for 29 Army Corps of Engineers projects and $4.8 billion for work on water infrastructure nationwide.

More specifically, the bill opened $100 million in federal funds for grants to help states deal with emergency situations related to drinking water; at the time, Flint was the only municipality fitting the criteria for the grants.

Another $70 million was allocated for subsidized loans to help with infrastructure projects, bringing the total funds available for those loans to $700 million, freeing up $20 million to forgive loans to communities dealing with major public health crises related to drinking water.

By March 2017, Flint’s former Mayor Karen Weaver wrote a letter to the EPA indicating that it would take a few more years for the city to be up and running with its on-water treatment facility, a goal set for August 2019.  The letter had been a response to the state announcing that at the end of January and beginning in March, they would no longer provide subsides for Flint residents to help pay their water bills, after recent testing showed that lead levels were returned to federal standards.

Roughly three years later, in December 2020, state officials announced that through a total of $120 million in federal and state funding, more than 9,700 lead service lines were replaced in Flint, with less than 500 service lines remaining to be checked.

Those inspections were slated to be carried out by the end of the month.

Kurt Thiede, former administrator of the U.S. Environmental Protection Agency’s Region 5, reported that the city was almost finished completing actions required under an emergency order the EPA issued in 2016. The order included the completion of a study on proper treatments to prevent water pipe corrosion and the regular sampling of water from homes that still have lead service lines

“The drinking water system in Flint, I think it can be said, is in better shape now than it’s ever been,” Thiede said.

In addition to these updates, Mayor Sheldon Neeley also pointed out that construction for a new chemical treatment system building and backup water source pipeline were still in progress and was slated to reach completion sometime this year.

Settlements & Funding

In April 2019, the Michigan Department of Environmental Quality announced that the city would be receiving $77.7 million in federal funding.

As part of a $140 million loan set to be allocated to East Lansing and Monroe counties in Flint, the funds are the remaining portion of a $120 million loan granted to the city in 2017.

At the time, the department said that moving forward, East Lansing would receive a $51.7 million loan that includes $2.1 million in “principal forgiveness funds” in order to make improvements to the collection system, build a new pump station and upgrade the Water Resource Recovery Facility.

Monroe County will also receive $10.2 million for upgrades and repairs necessary for the Bedford Township Wastewater Treatment Plant. The fund is also planned to be used for lineal sewer pipe rehabilitation.

In August of last year, the state of Michigan reached a $600 million settlement with Flint residents for the state’s role in the city’s water crisis. A summary of the deal shows that nearly 80% of the funds would go to children and minors.

The settlement is one of the largest in the state’s history; it’s more than the $546 million that the state has paid out in settlements over the past 10 years. The settlement was agreed to after 18 months of negotiations. Preliminary specifications include:

  • 80% of the net settlement fund will be spent on claims of children who were minors when first exposed to the Flint River water, with a large majority of that amount to be paid for claims of children age 6 and younger;
  • 2% will go to special education services in Genesee County;
  • 18% of the net settlement funds are to be spent on claims of adults and for property damage; and
  • 1% will go toward claims for business losses.

After the settlement receives final approvals, the state will have contributed more than $1 billion to the relief and recovery efforts, according to the Attorney General’s office.

Defendants in this agreement included those who were part of the state government with the problems occurred, including former Gov. Rick Snyder; however, it did not extend to private entities involved.

At the time of the settlement’s approval, law firm Cohen Milstein Sellers & Toll reported that separate litigation was still ongoing against the EPA and other defendants, including two private engineering firms charged with professional negligence—Veolia North America (Veolia) and Lockwood, Andrews & Newnam (LAN).

At the end of last month, the Flint City Council signed off on its portion of the $641 million settlement, with the city’s insurer kicking in $20 million as part of a deal to settle lawsuits against Flint, the state of Michigan and other parties.

A judge is considering whether to grant preliminary approval.

Investigations

Through an internal investigation that concluded in October 2016, the EPA was reported to not have acted fast enough in its efforts to warn the residents of Flint about the lead contamination in its drinking water.

EPA Inspector General Arthur Elkins said that EPA Region 5, which includes Michigan and other states in the Upper Midwest, “had the authority and sufficient information” to issue an emergency order in the Flint contamination matter as early as June 2015. However, the agency’s emergency order wasn’t issued until January 2016.

The report inspired much jurisdictional confusion, which required a review of state versus federal responsibility. In reference to the Safe Drinking Water Act Section 1431, the inspector general’s office concluded that the EPA did have the power to issue such an order if a state’s action on the issue was deemed insufficient.

In February 2018, a Genesee County water expert testified that he had issued a warning to not open the Flint Water Treatment plant, saying it was not yet properly equipped to produce clean water, and those on staff were not experienced enough to run the operation.

Genesee County Drain Commissioner’s Division Director John O’Brien noted that he, among other officials, tried to raise these concerns with city officials in early 2014. At the time, the facility wasn’t capable of producing drinkable water prior to the switch to the Flint River, noted The Detroit News.

In August 2018, another testimony was released by EPA official Miguel Del Toral, who blew the whistle on the lead-contamination crisis, stating that he told Michigan Department of Environmental Quality regulators in February 2015 that without anticorrosive treatment, the city’s drinking water would present a public-health threat.

The testimony that the federal agency brought up the lead issue more than six months before the state acknowledged the problem publicly came during a preliminary hearing for four former state officials facing felony charges related to the crisis.

A total of 13 state and local officials have faced charges that they ignored warnings and covered up potential contamination. Prosecutors have also alleged that local officials knew the water treatment plant that was being brought online to treat Flint’s water was insufficient, but that they went forward with the plan anyway.

At the beginning of last year, it was confirmed that former Michigan Gov. Rick Snyder, along with his health director and other ex-officials from his administration, were expected to face charges for their roles in the Flint water crisis.

   

Tagged categories: Funding; Government; Government contracts; Health & Safety; Health and safety; NA; North America; Ongoing projects; Pipeline; Pipes; potable water; Program/Project Management; Reservoir; Water/Wastewater

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