Detroit, suburban leaders announce deal to turn water department into a regional agency

A deal has been reached to turn Detroit's water department into a regional agency and cap annual rate increases at 4 percent for the next decade.

Only two of the governing board's six members would be appointed by Detroit, but rate increases would need approval from five. The department provides water to people in eight counties, approximately 40 percent of Michigan's population.

The agreement was announced Tuesday at the federal courthouse, several floors below Detroit's bankruptcy trial.

Judge Steven Rhodes had encouraged city and suburban leaders to use the bankruptcy as an opportunity to overhaul the agency. It would be renamed the Great Lakes Water Authority.

The agreement includes a $4.5 million fund to help people pay bills. Recent waves of shutoffs have caused controversy.