LANSING — The City of Flint's financial condition was so dire in 2014 that it threatened the ability of the Karegnondi Water Authority to issue bonds and start construction on a new pipeline to Lake Huron. But the project was rescued through what was described as a "sweetheart" state environmental order pushed by KWA bond attorneys, records show.
Although Flint is responsible for about 35% of the debt related to the $285-million KWA project, a deal struck between the Department of Environmental Quality and the city, which at the time was under the control of a state-appointed emergency manager, meant that none of that cost counted against the city's already squeezed debt limit, according to interviews and e-mails recently released by Gov. Rick Snyder.
The e-mails raise new questions about the state's role in not only allowing — but promoting — the development of the KWA, which cleared the way for Flint splitting with the Detroit Water and Sewerage Department as its supplier of clean Lake Huron drinking water and beginning to draw its water from the Flint River in April 2014. Inadequate treatment of the more corrosive river water resulted in unsafe levels of lead leaching into water pouring from city taps.
Officials used an "administrative consent order," or ACO, between the DEQ and Flint that was put together despite resistance, suspicion and buck-passing from officials inside the DEQ, records show.