"You and I come by road or rail, but economists travel on infrastructure."
I watched with great interest the news conference that announced the formation of the Great Lakes Water Authority (GLWA) and regionalization of Detroit's water system. By now, anyone with an interest in the Detroit Water and Sewerage Department (DWSD) has spoken about the deal, mostly with favorable reviews. What interests me most about the creation of a regional water system is whether it will be able to address the serious problem of our crumbling infrastructure.
Over the last decade, numerous commentators have discussed the slow decay of our infrastructure (which includes roads, airports, power grid, water and sewer, among other items), which was never intended to operate as long as it has. In addition to the failure to replace many of the outdated systems, there has also been a pattern of deferred maintenance, as local, state and federal governments have continually cut budgets for such things.
According to the city of Detroit: "The majority of the city's water mains are between 70 and 90 years old and failing at a rapid rate. Detroiters have suffered through more than 5,000 water main breaks in just the last three years. Rebuilding one percent (30 miles) of its system each year at a cost of about $25 million would have put the city on par with the national average. However, DWSD has spent no more than $3.4 million in each of the last three years to rebuild its mains."
In 2013, the American Society of Civil Engineers (ASCE) prepared a report entitled, "Report Card for America's Infrastructure." Citing the lack of funding for modernizing our infrastructure and deferred maintenance, the ASCE gave our infrastructure a "D" grade and reached the following conclusion:
"Our infrastructure is the foundation of our economy and our quality of life, and repairing and modernizing it has exponential benefits, including: increasing our gross domestic product, growing household income, protecting jobs and maintaining a strong U.S. position in international markets. Unless we address the backlog of projects and deferred maintenance throughout the country, the cost to each American family will reach $3,100 per year in personal disposable income."
As the focus of this entry is water infrastructure, the ASCE estimated there were 240,000 water main breaks in the United States annually and the cost of replacing all the water pipes (some more than 100 years old) would be more than $1 trillion. With respect to wastewater and stormwater, capital investments were estimated at $298 billion over the next 20 years. It is quite expensive, it seems, to maintain the amenities and lifestyles to which we have become accustomed.
How does this translate to Michigan? Michigan's drinking water needs require $11.8 billion over the next 20 years. Wastewater investments will require $3.7 billion over the next 20 years. Add to that the well-documented case of our crumbling roads and bridges, which many have decided is our No. 1 infrastructure issue, there are significant needs that remain underfunded.
Looking at all of America's infrastructure needs, the ASCE estimated there is an annual investment gap of more than $200 billion annually. Welcome to Third World America.
The task ahead seems daunting, if not prohibitively expensive. The political will to invest what is necessary also seems lacking. But, one bright spot appears to be the regional cooperation exemplified by the deal cut by the city of Detroit and the counties of Macomb, Wayne and Oakland. The $50 million annual lease payment to Detroit is earmarked for infrastructure development, including repairing and rebuilding Detroit's local system, increasing capacity for stormwater events and providing a share of costs to the GLWA's overall infrastructure improvements.
The American economic engine that fueled our prosperity existed in large part because of our advanced infrastructure. As that infrastructure aged, we have neglected to maintain and improve it. Other countries have invested heavily in their infrastructures and are competing with us on our level. While they continue to invest, we fail to invest and divert assets to other priorities.
We can hope that Detroit and the surrounding counties can break out of this bad habit and the regional cooperation exhibited by the Detroit mayor and executives of Macomb, Wayne and Oakland counties will serve as an example of how to do that.
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