FLINT, MI – The Michigan Strategic Fund (MSF) board today approved the authorization of private activity bond financing as part of the Flint water settlement.
The settlement was agreed to last year by the State parties and the plaintiffs’ legal counsel following more than 18 months of negotiations. It received preliminary approval by the court earlier this year.
Through that negotiated settlement agreement, and subsequent bipartisan legislation, the MSF was identified to facilitate the transaction and issue the bonds that will finance the settlement over a 30-year period. The newly-created Flint Water Advocacy Fund will borrow the settlement funds through the MSF and transfer the funds to the settlement administrator, per the agreement.
The State of Michigan will be responsible for the settlement payments of approximately $35 million a year for up to 30 years—an obligation that will be included as part of the annual appropriations process. As is the case with all bond inducements or authorizations, there is no financial risk or financial exposure to the Michigan Economic Development Corporation (MEDC) or MSF.
Attorney General Nessel and Gov. Gretchen Whitmer in August announced a $600 million preliminary agreement to settle the lawsuits filed against the State after the City of Flint switched its public water supply to the Flint River in 2014.
“Providing relief for the people of Flint has been a top priority for me since taking office and I’m encouraged to see this step taken in the settlement process,” Nessel said. “This agreement serves as a new chapter in our state’s history—one focused on the healing process for the city of Flint, its children, and its future.”
Defendants joining the settlement since August include the City of Flint, which is providing $20 million through its insurer, and McLaren Regional Medical Center and Rowe Professional Services Co., which are contributing $20 million and $1.25 million, respectively.
More information on the settlement can be found online.