Flint Agrees to Pay $20 Million in Water Crisis Settlement

Water analysis test kits are seen at a fire station in Flint, Mich., in 2016. (Ryan Garza/Detroit Free Press via AP, File)

FLINT, Mich. (CN) — The Flint City Council voted early Tuesday to approve the city’s $20 million share of a massive $641 million settlement for injury claims stemming from the contaminated water crisis that first poisoned citizens in 2014.

The council members voted last week to hire their own attorney to advise them on the settlement and handle any of their objections with the court. They had also postponed the vote to allow the use of $20 million from an insurance carrier to pay Flint’s portion of the deal, as some members expressed apprehension about leaving some victims behind.

The council had until Dec. 31 to decide, but in a meeting that began Monday night and stretched past midnight, they approved the resolution in a 6-1 vote around 12:30 a.m. Tuesday. Two members abstained.

A group of protesters gathered outside Flint City Hall earlier this month to encourage council members to vote against the measure. Former Mayor Karen Weaver was among them, according to a report from local ABC affiliate WJRT.

Weaver was suspicious about the deal and said the settlement funds did not add up when factoring in attorney fees, pipe replacement costs and the number of residents in the city.

Councilwoman Monica Galloway was also not happy with the deal, according to a Michigan Radio report.

“We had no control over emergency managers,” Galloway said at the meeting, arguing the city should be a plaintiff instead of a defendant in the case. “And yet we sit as a community defending the very emergency managers that were imposed upon us.”

Galloway and councilman Eric Mays abstained from voting while councilwoman Jerri Winfrey-Carter voted against the resolution.

But Councilwoman Santino Guerra said she was satisfied, joining the majority of members in supporting the measure.  

“This is the best decision for the city as a defendant definitely to take,” she said.

Flint still faces more than 100 lawsuits that could strain its finances to a breaking point if they’re not resolved. Mayor Sheldon Neeley said the city could face bankruptcy and she urged the members to vote yes on the settlement.  

City Council President Kate Fields voted in favor of the deal after voicing approval for it prior to the meeting.

“It’s something. It’s better than nothing,” she said.

Fields was hopeful U.S. District Judge Judith Levy, a Barack Obama appointee, would consider additional questions about the claims process and the state’s share of the agreement as part of another resolution approved by the council.

At a preliminary hearing on Monday, Levy said the $641 million agreement is the “most complex settlement I’ve ever seen.”

Attorney Ted Leopold, co-lead counsel for the plaintiffs, told the judge he had “worked harder on this case than any other.” Leopold stressed that while the victims included in the deal would be treated fairly, he acknowledged there could be intense negotiations in future litigation with other groups.

Todd Weglarz, an attorney who represents residents who contracted Legionnaires’ disease caused by low chlorine levels in the municipal water system, expressed concern about the allocation of funds.

“It’s impossible to tell what living victims are going to get,” he said.

Miriam Wolock, appointed by the court as guardian ad litem to review the settlement, methodically went through the details. She said the process to appoint a representative for child victims was consistent with court rules and noted that there was even an “other” provision for children who could not be categorized easily and required representation.

Wolock also said there were “multiple layers of protection” for minor claimants. If they were awarded less than $5,000, the money would be paid to a conservator. If the payment is higher than $5,000, it could go to a special needs trust, a settlement preservation trust or a structured settlement.

“It’s fair and in the best interests” of the victims, she told Levy.

The judge said she would try to have an opinion ready by mid-January but cautioned that it could be delayed by further negotiation. A final decision on the settlement is likely several months away.

One of the largest in state history, the preliminary settlement proposed payments for Flint citizens and businessowners affected by poisoned water from a $600 million fund and promised 80% of the money would be directed to victims who were under 18 years old at the time of the crisis.

Under the terms of the updated settlement, 79.5% of the funds will be apportioned to minor children and a $35 million fund will be established for future minor claimants. Adult victims and property damage claims will account for 18% of the money and less than 1% is allocated for business losses. Another 2% will be used for a dedicated fund to offer special education to those who developed long-term neurological damage from the dirty water.

Last week, Michigan legislators cemented a plan to borrow $600 million to finance the state’s portion of the proposed agreement. Democratic Governor Gretchen Whitmer indicated she approved of the plan that authorizes a loan from a state economic development fund.

The lead contamination crisis began in April 2014 when a state-appointed emergency manager switched the city’s drinking water supply from Lake Huron water treated in Detroit to Flint River water treated at the Flint Water Treatment Plant. Michigan Department of Environmental Quality officials admitted they failed to require corrosion-control chemicals as part of the water treatment process.

Flint switched back to the Detroit water system in October 2015.

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