Terms of state loan prevented Flint from reverting to Detroit water

© Rebecca Cook
The city of Flint, Michigan couldn’t rejoin Detroit’s water supply after its own system was contaminated with lead, because the terms of a $7 million loan taken from the state prohibited it.

Michigan Democrats said Wednesday that they obtained records of the loan that Flint took from the state in April 2015, in order to erase the city’s deficit and get out of emergency management.

Despite the fact that there was mounting evidence of serious problems with the quality of Flint’s local water supply, the loan included terms that barred the city from returning to Detroit as the source of the city’s drinking water.

Other terms of the loan included barring the city from lowering rates it charged for water services and stopping its transition to the Karegnondi Water Authority (KWA) supply system. Flint had switched from Detroit water to the Flint River as its primary water source in April 2014 as a temporary measure, before the KWA system to pipe in water from Lake Huron was operational.

The corrosive water from the river caused lead from the Flint’s pipe system to leach into drinking water, exposing children to the toxic substance. By early 2015, residents were protesting the discolored water coming from their taps.

Though the Flint City Council voted to try to return to the Detroit water supply in March 2015, the effort went nowhere, because the city was under the control of the state-appointed emergency manager Jerry Ambrose.

In April, Ambrose signed the $7 million deal that barred the city from switching water supplies without permission from Nick Khouri, the state’s treasurer.

State officials said that the conditions of the loan, which helped the city transition away from emergency management, were intended to ensure financial stability in Flint.

Michigan Democrats have seized the opportunity to use as ammunition against Republican Governor Rick Snyder. State House Minority Leader Tim Greimel called for governor’s resignation at a press conference Wednesday, while Michigan Democratic Party chairman Brandon Dillon said that Treasurer Khouri should "resign or be fired immediately."

READ MORE: ‘How many more Flints out there?’ Scientists concerned over official neglect

Dillon added that the Snyder Administration doomed the city to have an unhealthy water supply.

"The Snyder Administration effectively put a financial gun to the heads of Flint families by using the Emergency Manager agreement to lock the City into taking water from a poisoned source even after alarm bells were going off all over the Snyder Administration that lead and Legionnaire's disease were poisoning families," Dillon said, according to MLive. "It is simply unconscionable."

The city returned to Detroit water in October 2015, when the state legislature appropriated $6 million and Khouri gave the greenlight, waiving the provision that would have blocked the move.