Critics Don't Want To Admit Flint's Water Crisis Is Due to Stimulus Plan Rather Than Austerity

Job growth in a depressed city was a key motivation behind new pipeline.


Kristi Culpepper, a Kentucky government official who blogs about municipal bond issues and used the colorful twitter handle "Bond Girl" until a reporter exposed her identity, has written a five-page rebuttal of my recent coverage of Flint, Michigan's water crisis. 

Polluted River
David A. Villa via Foter.com / CC BY

I reported that Flint's lead poisoning is the result not of an austerity program pushed on the fiscally strapped city by an emergency manager appointed by Michigan Gov. Rick Snyder but of a stimulus program gone wrong. Various internal documents and an independent study commissioned by the state treasurer Andy Dillon had found that switching from the Detroit Water and Sewage Department (DWSD) to the new water system being developed by Karegnondi Water Authority (KWA) would likely cost Flint more not less.

Culpepper quotes a lengthy excerpt from my piece and concludes: "Maybe one sentence of all that is factually correct." After such a serious accusation, one would expect Culpepper to actually point to the alleged factually inaccuracies. But she doesn't. She simply knits a different narrative from the long and arduous history of the project that doesn't have much to do with the immediate events preceding the decision to switch from DWSD. What's more, she ignores that I'm not the only one using these documents to raise questions about why Flint made the decision to split. After my piece came out, The Detroit News also did a story using the same sources to raise questions about the cost effectiveness of the switch.

Setting that aside, Culpepper finds my "version of events…startling in its naïveté" because she claims:

1) I ignore that DWSD and Detroit "did not play well" with its municipal customers and suburbs. "The local governments involved in the pipeline had been trying for years to negotiate lower rates with Detroit Water and Sewerage and Detroit had flatly refused. Detroit only began to discuss a modified rate structure in earnest once it became a done deal that they were going to lose their wholesale customer base and under pressure from the state.

2) Flint had every reason to be suspicious of DWSD because Detroit, which was itself in bankruptcy and under the supervision of a state-appointed emergency manager, was looking for ways to palm off the operational costs of the system to its suburban customers.

3) I was insisting on the "stimulus" narrative because: "The players in charge at the state level in this story were so criminally indifferent to their duty to ensure public safety that there is no way to defend them at this point. So it is easier to cast them as wanting to create a 'stimulus project' for Flint, because then the governor isn't worth defending as a conservative leader."

I honestly don't get what is being alleged here. The governor is not worth defending if he engaged in stimulus spending but is worth defending if he jeopardized public health? I can't unpack the thought process here so I'm just not going to try.

4) Moving on, Culpepper takes pot shots at Reason's infrastructure coverage in general, noting that instead of pretending that America's infrastructure was in better shape than it is, we should make a "good libertarian argument regarding infrastructure" by arguing for "increased private investment rather than denying that much of America's infrastructure is past its useful life."

Talk about spinning a bizarre narrative! But to take her last point first, Reason has a history of calling for Public Private Partnerships in transportation and public infrastructure, so it doesn't need any lectures about making "good libertarian arguments" about that. In fact, both Reason Foundation Vice President Adrian Moore and I, in the wake of Flint's lead poisoning debacle, have made the case for privatizing water utilities to enhance not just efficiency but also accountability. That's especially important given that victims of government abuse and neglect usually can't actually sue public officials as they can private companies. (I have even called this a "crime"—so much for not criticizing public players who endanger public health!)

Her observation that Flint had every reason to be suspicious about DWSD's offer because of DWSD's previous bad behavior is true but irrelevant. I was on the editorial board of The Detroit News for nearly 10 years, from 1995 to 2005, and observed and wrote about the constant pissing match between DWSD and its suburban customers. As I acknowledged in my piece, DWSD has historically been a dysfunctional and corrupt entity whose difficulty in complying with federal water quality standards had landed it under federal court oversight for 35 years.

However, Sue McCormick, the director of DWSD when Flint's contract renewal negotiations began, was appointed by the court as part of a consent agreement to cleanup DWSD's management and return it to solvency. She was a technocrat, not a politician, and was not part of the corrupt Detroit establishment. She assumed office with the express purpose of mending fences with Detroit's municipal customers. To that end, she wanted to leave no stone unturned to persuade Flint to renew its 30-year contract with DWSD instead of going with KWA. Her bid to Flint included not just cutting water rates in half but also giving Flint a seat on the board to safeguard against unwarranted future hikes. Indeed, she offered not only Flint such representation. She offered a seat on the board to the Great Lakes Water Authority, a consortium of many of DWSD's South East Michigan suburban customers so that they could insulate themselves from future rate hikes.

However, according to DWSD's then-spokesman Bill Johnson (full disclosure: he was my colleague on The Detroit News editorial board), she encountered a complete brick wall with Snyder-appointed Flint Emergency Manager Ed Kurtz and Genesee County Drain Commissioner Jeff Wright. Both made it abundantly clear that they had no desire to negotiate with her. They had their heart set on the new KWA pipeline servicing Flint and rejected her proposal within 24 hours of receiving it, declaring that the decision to break away from Detroit had already been made and "there would be no looking back."

There is no doubt that part of the reason is that they simply couldn't get past the bad blood with DWSD and trust that it wouldn't pull some trick from its hat after McCormick left and jack its rates, as Culpepper suggests. But Culpepper is herself naïve if she thinks that that was all that was driving their decision. Local political leaders love expensive infrastructure projects because that gives them more authority to play kingmakers, hand out contracts, and consolidate their power base.

It also allows them to take credit for boosting jobs and growth—that is, to administer an economic stimulus.

Don't believe me? Here's a 2010 Michigan Live story about what Drain Commissioner Wright, the man who did more than anyone else to sell everyone from the governor on down on the KWA-Flint pipeline, was saying years ago to promote the project:

County officials may have uncovered the most effective selling point yet for building a new water pipeline to Lake Huron at a time of high unemployment: The promise of 1,000 good-paying jobs that will last more than three years.

County Drain Commissioner Jeff Wright has told the Board of Commissioners that building the pipeline won't just save hundreds of millions of dollars water costs during the next three decades but has the potential to jumpstart what's been a gloomy local economy with some of the highest unemployment rates in the state.

Wright said he expects 1,000 jobs to be created for more than three years as a result of the pipeline, including work for pipefitters, plumbers, surveyors and engineers, and he's recommending that a new water authority require local workers get at least 75 percent of those new jobs.

"The bottom line is any contracts should require 75 percent of the workforce comes from here," Wright told the county Board of Commissioners Tuesday. "If we build it, the majority are going to come from here."

I have not been able to verify whether the contracts actually stipulated that the developers use local workforce, something that unions were ecstatic about as Michigan Live noted later in the same story. Either way, it is hard to argue that stimulus and jobs were no part of the political motivation driving this project.

One last thing: Culpepper claims that DWSD terminated its agreement with Flint after the city refused to renew its contract, leaving Flint no choice but to reopen the mothballed local water plant that relied on toxic Flint River water for two years before the new KWA pipeline became operational. But Johnson notes that this is not accurate. He maintains that Flint's old contract had already expired at the time of the negotiations and Flint was obtaining water from DWSD without a contract. He claims McCormick actually sent Flint a letter asking if it wanted to discuss a short-term contract, just as she had done with other Genesee County communities that were also going to eventually switch to KWA. Those communities accepted. But Flint officials rejected the suggestion because they felt that they could reopen the Flint River plant and save money.

That turned out to be only one among many mistakes by government officials at every level, as I argued here.