“More than $20 million” balance found in water fund audit, new city administration claims

Pipe replacement on Copeman Boulevard, July 2017 (Photo by Ed Custer)

By Jan Worth-Nelson

The City of Flint’s water fund has a “fiscal year 2020 balance” of more than $20 million, according to a startling press release issued this afternoon from Communications Director Marjory Raymer.

Municipal finance expert Eric Scorsone, hired by Mayor Sheldon Neeley in the first week of his administration, said it appears “budget estimates and forecasts have been used for years when assessing the status of the Water Fund — without updating the balance based on actual revenue and expenditures.”

The press release skewered the administration of recently defeated Mayor Karen Weaver, stating in a quote from Neeley, “It’s shocking to find out that poor fiscal oversight potentially created such a large discrepancy in actual versus reported dollars in the Water Fund. Our first step will be to confirm those initial findings.”

Raymer stated Scorsone is reviewing the numbers “to ensure they account for all Water Fund obligations.”

Because Scorsone, a Michigan State University economist, was author of one of the financial managers laws and a deputy treasurer supervising the state’s emergency financial managers program, he has been regarded warily by some in Flint.  He also is widely recognized  as one of the state’s top experts in municipal funding.

Noting that the city’s water system includes 586 miles of water mains, most of which are in excess of 70 years old, Raymer said, “The funds will be used to make immediate, and critically needed, improvements to the water system.”

Mayor Neeley addressing the College Cultural Neighborhood Association last week (Photo by Jan Worth-Nelson)

Mayor Neeley had made a promise of an audit of city finances and operations a central plank of his campaign, and ordered the audit soon after taking the oath of office Nov. 11.

He announced Scorsone would join his transition team Nov. 15.

“These dollars will help us move closer to giving the residents of Flint the service they need and deserve, but, unfortunately, it is still just a drop in the bucket of funding we need for our water system,” Neeley said.

“My first reaction when I saw this headline was WOW! Great news,”  EVM political commentator and government expert Paul Rozycki said on reading the press release.  “However, on second thought, let’s see what the final picture is.  It seems too good to be true to find $20 million of genuine new money.”

A longtime water activist and Flint resident was quick to respond, “We could ask Neeley, if there’s a $20 million surplus and we’re all paying $100 water bills, how much will be used for rate relief?”

A 2018 report, called the “Water Distribution Optimization Plan Prioritization”  by consultant Arcadis identified $200 million in needed capital improvements “over and above the work already being done to improve the Flint water system, including the lead pipe replacement program, through both state and federal funding.”

Those improvements, as the press release stated , “are required by the Environmental Protection Agency emergency order issued in January 2016.”

East Village Magazine is attempting to contact former Mayor Weaver for comment.

EVM Editor Jan Worth-Nelson can be reached at janworth1118@gmail.com.




Author: East Village Magazine

A Non-profit, Community News Magazine Since 1976

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