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Free Riders, the United Nations, “Affordable” Water and the Daily Show

18 Nov 2014

waterEt tu, Jon Stewart?  I was dismayed to read of the United Nations’ visit and evaluation of Detroit’s recent, well publicized water shut-off initiative.  I suspect that it’s a waste of time; interesting, but a waste.   First of all, the federal bankruptcy judge supervising the Detroit Bankruptcy refused to rule against the City on its now-revised shut-off program.  I am not certain what authority the UN has in Detroit (I suspect none), it is possible that the UN could assert that the United States has violated some treaty.  It is interesting that the UN human rights declaration does not discuss water.  A commentary to that declaration does state that  “the human right to water entitles everyone to sufficient, safe, acceptable, physically accessible and affordable water for personal and domestic uses“ and notes that it can be a violation when arbitrary or unjustified disconnections occur or when there are discriminatory or unaffordable increases in water tariffs.

that the shut-offs fell disproportionately on the poor while ignoring those businesses with the ability to pay seems backward and should have been the protesters’ focus

It is the word “affordable” that is crucial here.  The UN documents do not state that government provided water must be free.  In fact, as I noted in my earlier blog post and as the New York times noted previously, not letting market forces set water prices can lead to, in some cases, dramatically bad outcomes.  Water in Detroit cannot be provided for free without a dramatic shift in how we pay for municipal services (i.e., raising taxes).  At present, a significant segment of the population has been taking water for free and leaving the rest of us to pay for it.  This is a classic “free rider” problem and it has led to exactly the sorts of problems that economists predict – an inability to provide the good (in this case water and sewer service) at a reasonable cost.  The bottom line, getting the water to drinkable state (see this video which estimates that it takes $9 Million/year) isn’t free nor is the cost of maintaining the delivery system. So, if we want to have a world class system (vs this sort of jury-rigging), we need to find a way to pay for it.

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Detroit’s Carbon Footprint – now what?

18 Nov 2014

Not a carbon footprint

Not a carbon footprint

A couple of years ago, my son was watching a cartoon where one character discussed his villainous carbon foot print (a giant foot).  This showed me both how widespread the use of the term “carbon footprint” had become and how little anyone seems to know what to do with or about that information.  A group at the University of Michigan recently released findings calculating the City of Detroit’s cumulative carbon footprint and presented their report to Mayor Duggan’s office.

Not surprisingly, the study reported that some 66% of the City’s emissions come from stationary sources including residential and commercial buildings and another 30% result from transportation. Those are known to be large sources of emissions.

What I found interesting is that 41% of the city’s total emissions are produced in just 4 of the City’s 33 ZIP codes – primarily from the City’s southwest, midtown and downtown areas. Citywide, greenhouse gas emissions totaled 10.6 million metric tons of CO2 equivalents in 2011 and 2012. According to the report, if you drove from Detroit to Ann Arbor 60 times, your car would emit roughly one metric ton of CO2.  Also interesting is that, on a per capita basis, Detroit’s 2012 emissions are below average when compared to data previously collected from 13 other U.S. and Canadian cities. Detroit’s per capita emissions ranked 9th-lowest among that group—below Cleveland, Denver, Pittsburgh, Ann Arbor and Washington, D.C.  Per capita emissions were lower in Baltimore, Boston, Minneapolis, Chicago, Philadelphia, Toronto, Seattle and New York City. That one always surprises, but New York with its many tall buildings is surprisingly efficient on a per-capita basis. The report shows that electricity use contributed 45% to 2012 citywide emissions, in large part because of DTE Energy’s fuel mix, which includes 76% coal.

Now that we know where the City’s “low hanging fruit” of CO2 emissions can be found, the City may be able to work on assisting its property owners and businesses to reduce those emissions, which typically go hand-in-hand with cost savings.  That’s often the best way to sell such changes – not based on an environmental change, but based on an economic one.  One more thing for Mayor Duggan’s team to work on.

CSI Part II – MDEQ rolls out brownfield tax increment financing proposal – five major changes you should know about

11 Nov 2014

moneyAs you may recall from this spring, I was asked to serve on MDEQ’s initiative to  review and improve the “patchwork quilt” of statutes and rules regarding brownfield redevelopment incentives, grants and loans.  A CSI II group (of which, in full disclosure, I chaired the Legislative Committee) met regularly over the Spring and Summer and MDEQ has announced two meetings (see the attached flyer) to roll out the proposed changes. These changes have not yet been introduced in the Legislature and thus, are currently only an MDEQ internal recommendation. The hope is that these changes will be introduced shortly.

if passed, these proposed changes should streamline, simplify and speed up the process for loan, grant and TIF approvals to enable projects to get started faster than ever before while supporting a greater range of eligible activities than previously available.

There was some tension between those championing redevelopment and those focusing on environmental remediation but ultimately, there was agreement on a set of changes and clarification of the rules and statutes to clarify the process for obtaining loans, grants and tax increment financing for brownfield redevelopment.  The five most significant changes include: (more…)

The votes are in – now comes the hard part

13 Oct 2014

Photo Credit: Christine Cousins, www.christinecousins.com

Photo Credit: Christine Cousins, www.christinecousins.com

Each of the major players (Detroit and Wayne, Oakland and Macomb counties) have now all approved joining the newly formed Great Lakes Water and Sewer Authority; so, we’re good to go and everything is fine, right?  Well, not so fast.  All the votes mean so far is that the Authority exists and that it has four members under the terms of a Memorandum of Agreement and Articles of Incorporation.  Frankly, there wasn’t much doubt that it would be approved and the only question was Macomb.  Once Detroit and Wayne approved it (which was fairly certain), if Oakland or Macomb didn’t, the governor would appoint their representatives and  they could be charged more than those who joined. Landlocked Oakland was a “gimme.” Macomb, with access to Lake St. Clair could have opted to develop its own system – as others have done. (more…)

New Detroit Water and Sewer Deal Announced – harmony reigns — for now.

9 Sep 2014

Photo Credit: Christine Cousins, www.christinecousins.com

Photo Credit: Christine Cousins, www.christinecousins.com

I have blogged previously about the DWSD, arguing that a regional deal makes sense.  I’ve also blogged about rumors that the Emergency Manager was threatening to privatize the system and concerns about funds needed for infrastructure might go into the City of Detroit’s general fund to help the City get out of bankruptcy.  A reported 40 year regionalization deal is now on the table.

if rates look to climb beyond 4% a year – it may be back to a very uncertain drawing board.

There are a number of interesting points in the reported deal, which needs to be approved by October 10th:

1. A regional authority – the Great Lakes Water Authority (GLWA) will be created to operate the regional water and sewer system. The GLWA will have 6 members: 2 appointed by the Mayor of Detroit, 1 each by Wayne, Oakland, and Macomb Counties, and 1 by the Governor. 5 of 6 votes will required for major issues.

2.  Detroit will own and control its own water and sewer system – making it similar to every other community in the system. (more…)

Lake Erie – so is it Ohio’s fault?

22 Aug 2014

t1_11246_1533_LakeErie_143_250mThe recent shutdown of Toledo’s water system due to an algal toxin in the water caught everyone’s attention.  Our friends at Dragun note that the Toledo water problem was triggered by some odd weather, but the algal source problem remains out there.   The MDEQ announced this month a five point plan to protect the lake: (more…)

What is a 100 year rain anyway?

14 Aug 2014

Anonymous_two_red_diceAfter the recent flooding, news reporters came out and pronounced Monday a “100 year rainstorm.”  What does that mean anyway?  Is this mere hyperbole, like “trial of the century”?

The term has a specific impact for both insurance purposes and for planning.  Your flood risk determines whether you should buy (or whether you are eligible for) flood insurance.  And I assume that, as to sewer backup insurance (there is such a thing), it also affects your rates.  So, given that we’ve had rain storms in Detroit of over 4 inches 4 times over the last 100 years, what is a 100 year storm?

A 100 year rain storm (like a 100 year floodplain) does not mean that it happens only once every hundred years but rather that, statistically, planners believe that there is only a 1% chance of it happening in any one year.  Think about rolling a die.  If you roll a 3 four times in a row (assuming the die is fair), when you roll it a 5th time, its chances of coming up a 3 (or any other digit) is still 1 in 6 or 16.7%.  Weather is a bit more subjective and variable than rolling a die or flipping a coin but the same concept applies. (more…)