Michigan Restricted Flint from Switching Water in Loan Deal

The state of Michigan restricted Flint from switching back to Detroit's water source under the terms of a $7 million loan to help transition the city from state management, according to a document released Wednesday.

The April loan agreement, obtained by the state Democratic Party through a public records request, said Flint could not enter an agreement with its former water supplier without approval from the state treasurer. The agreement with Republican Gov. Rick Snyder's administration also prohibited the city, which was having numerous problems with water from the Flint River, from reducing water and sewer rates unless authorized by the state.

"The Snyder administration effectively put a financial gun to the heads of Flint's families by using the emergency manager law to lock the city into taking water from a poisoned source,'' party chairman Brandon Dillon said in a statement.

Roughly six months after limiting Flint's options, the state helped it return to Detroit's water system once it became clear that lead had leached from aging pipes into homes and businesses.

In March 2015, the Flint City Council, which was powerless at the time, voted to "do all things necessary'' to stop using the Flint River and reconnect to Lake Huron water. But state-appointed emergency manager Jerry Ambrose said no, calling it "incomprehensible,'' saying that it would cost the city more than $1 million a month and that "water from Detroit is no safer than Flint water.''

The loan agreement said Flint needed state permission to switch.

Provisions in the loan deal "were included to ensure the city remain on solid financial footing going forward,'' state treasury spokesman Terry Stanton said Wednesday.

Snyder spokesman Ari Adler said that, under the loan agreement, "nothing was prohibited as this latest round of political rhetoric is suggesting.''

A state official notified Snyder's aides in March 2015 of a surge in Legionnaires' disease potentially linked to Flint's water — long before the governor, who said he was not made aware of the outbreak, reported the increase to the public.