Title
Resolution to Adopt the Detroit Water and Sewerage Department (DWSD) Water System Improvements Project Plan for Fiscal Year (FY) 2027 Drinking Water State Revolving Fund (DWSRF) Funding Consideration
Body
Agenda of: April 22, 2026
Item No.: 2026-113
TO: The Honorable
Board of Directors
Great Lakes Water Authority
FROM: Suzanne R. Coffey, P.E.
Chief Executive Officer
Great Lakes Water Authority
DATE: April 22, 2026
RE: Resolution to Adopt the Detroit Water and Sewerage Department (DWSD) Water System Improvements Project Plan for Fiscal Year (FY) 2027 Drinking Water State Revolving Fund (DWSRF) Funding Consideration
MOTION
Upon recommendation of Nicolette Bateson, Chief Financial Officer/Treasurer, the Board of Directors (Board) of the Great Lakes Water Authority (GLWA) approve the attached resolution to adopt the Detroit Water and Sewerage Department (DWSD) Water System Improvements Project Plan for FY 2027 Drinking Water State Revolving Fund (DWSRF) funding consideration; and authorizes the CEO to take such other action as may be necessary to accomplish the intent of this vote.
BACKGROUND
The Great Lakes Water Authority (GLWA) secures capital improvement financing for the Detroit Water and Sewerage Department (DWSD) in accordance with foundational documents related to the establishment of GLWA. Pursuant to Section 7.2(b) of the Regional Water Supply System Lease between the City of Detroit and GLWA, “The Authority shall cooperate fully with the City in the implementation of this Detroit Capital Improvement Program, including financing through the Authority….”
DWSD has identified the Water System Improvements Project for submittal to the Michigan Department of Environment, Great Lakes, and Energy (EGLE) for FY 2027 DWSRF funding consideration. This project is comprised of five sub-projects focused on replacing water mains and lead service lines in select neighborhoods throughout the city of Detroit as follows.
• Water Main Replacement referenced as WS-757 (Project A), in the South of Six, Rosedale Park, Grandmont #1, Hubbell-Puritan, and Belmont neighborhoods. Estimated project costs: $20 million.
• Water Main Replacement referenced as WS-758 (Project B), in the West Outer Drive, Fiskhorn, Davison-Schoolcraft, Northwest Community, and Chadsey Condon neighborhoods. Estimated project costs: $20 million.
• Three (3) Lead Service Line Replacement Projects in the Grandmont, Springwells, Boynton, and Dexter-Linwood neighborhoods. Estimated project costs: $30 million ($10 million each for 3 lead service line replacement projects).
The impact of this project and the associated sub-projects will be improved customer satisfaction and safe, reliable service delivery of potable water to customers. The total estimated cost of the overall project is $70 million.
The deadline to submit all DWSRF project planning documents to EGLE is June 1, 2026. A public hearing must be held for the impacted area of the project prior to submission. The Water System Improvements Project Plan was presented at a DWSD Public Hearing on February 18, 2026, and adopted by the DWSD Board of Water Commissioners on the same date. Per notification from EGLE, GLWA is not required to hold a separate public hearing for the local project. The project plan and Public Hearing Notice can be viewed on DWSD’s website at: www.detroitmi.gov/dwsd <http://www.detroitmi.gov/dwsd>.
JUSTIFICATION
The Michigan Department of Environment, Great Lakes, and Energy requires the GLWA Board of Directors approve a resolution adopting the DWSD project plan. The resolution must be signed and included with the final project planning documents by the June 1, 2026 deadline. DWSD shall submit the project plan to EGLE with GLWA as the loan applicant if approved for funding.
GLWA concurs with the DWSD Water System Improvements Project Plan adoption and will pursue low interest funding through the DWSRF program. Historically, DWSD has qualified as a significantly overburdened community, allowing it to secure additional priority points, which improves the chance of funding, and to attain the lowest DWSRF interest rate.
While the FY 2027 DWSRF interest rates may not be published until October 2026, significantly overburdened applicants currently qualify for 1.00 percent financing on 20-year, 30-year, and 40-year loans. These loans typically offer substantial interest savings compared to similar open-market revenue bonds. By way of example, a $70 million DWSRF loan provides approximately $47.5 million in potential interest savings over a 30-year term compared to a 4.5% market-based alternative.
Another advantage to the SRF program is interest costs are only incurred on amounts drawn from the loan instead of the entire loan amount. This results in additional debt service savings early in the term of the loan compared to market-based transactions.
BUDGET IMPACT
GLWA will be the loan applicant on DWSRF loans issued on behalf of DWSD, and DWSD will be the DWSRF loan recipient as determined by EGLE. All project costs financed by GLWA, on behalf of DWSD, through the DWSRF program bonds and resulting principal and interest payments on the bonds will be directly allocable to the DWSD local system. Debt service is anticipated to begin on October 1, 2027 for this project and will be included as part of the FY 2028 - FY 2029 biennial budget.
COMMITTEE REVIEW
This matter was presented to the GLWA Audit Committee at its March 27, 2026 meeting. The Audit Committee unanimously recommends that the Great Lakes Water Authority Board of Directors approves the attached Resolution for the Detroit Water and Sewerage Department (DWSD) Water System Improvements Project Plan for FY 2027 Drinking Water State Revolving Fund (DWSRF) funding consideration.
SHARED SERVICES IMPACT
This item does not impact the shared services agreement between GLWA and DWSD.