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November 27 2019

New Lead And Copper Rules Survive Challenge

The Michigan Court of Claims recently dismissed a lawsuit challenging the 2018 changes to the Michigan Lead and Copper Rules (“MLCR”). As a result, public water supplies across the State will need to adhere to approaching deadlines imposed by the rules.

The new changes to the MLCR were proposed by Governor Snyder and the Department of Environmental Quality (now EGLE) in 2018 to further restrict the presence of lead and copper in Michigan’s drinking water after the Flint Water Crisis. The most significant change was the implementation of a new lead action level at 12 ppb, compared to the 15 ppb under the prior rules and existing federal regulations. The new MLCR also require complete replacement of lead service lines over a period of 20 years, including the portions of service lines on private property. When the changes to the MLCR took effect in June of 2018, they became the most restrictive set of rules in the nation and are projected to cost local governments across the State a total of $2.5 billion to implement.

In late 2018, several public water supplies, including the Great Lakes Water Authority, the City of Detroit and the City of Livonia filed a lawsuit challenging the MLCR in the Michigan Court of Claims. Plaintiffs argued that because most service lines—from the building to the property—are private, EGLE had gone beyond the scope of its authority. The plaintiffs also argued that—by requiring “free” replacement of private service lines—they are being required to give away something of value without consideration, which constitutes an impermissible lending of credit under the Michigan Constitution.

This past August, the Court rejected all of the plaintiffs’ arguments and upheld the new MLCR. The Court recognized the significant financial and logistics burden placed on water systems under the rules, but held that those burdens are outweighed by the state interest in safe drinking water. The Court found that the Safe Drinking Water Act grants EGLE the authority to regulate waterworks systems of public water supplies. The Court further found that the Safe Drinking Water Act’s scope only excludes waterworks systems consisting solely of customer site piping and not to systems containing mixed public and private service lines. In other words, the Court found that “so long as the system is not entirely privately owned, it is plainly within the ambit of [EGLE]’s regulatory authority.” The Court held that the rules do not constitute a lending of credit, and even if they did, the rules fall into an exception that permits municipalities to extend credit where lending is “provided by law and for any public purpose.” In the opinion, the Court pointed to the fact that a municipality can spread replacement costs by imposing the costs on all users of the water supply. Thus, by placing the cost on users and by receiving the benefit of less lead contamination in their waterworks system, the municipality is not giving something away for “free.” For similar reasons, the rules do not violate the Revenue Bond Act.

As a result of the Court’s decision, townships and other local units of government with public water supplies are expected to follow the new rules and all of the pending deadlines and requirements contained therein including the following:

  1. All public water supplies must prepare and submit a preliminary Distribution System Materials Inventory (“DSMI”) to the State by January 1, 2020. The preliminary DSMI must consist of an assessment of distribution materials based on the water supply’s existing information. A final comprehensive DSMI with methodology verification is due to the State by January 1, 2025.
  2. Beginning in 2021 (the year after the preliminary DSMI is complete), public water supplies with lead service lines must replace all such service lines at an average rate of five percent per year, not to exceed 20 years. The rules require a water supply to replace every lead service line in a water system, including any portion of a service line that is privately owned, at the supply’s expense. Additionally, partial lead service line replacement is now prohibited except in cases of emergency repair.

With respect to service line replacements, public water supplies will need to notify private property owners affected by any planned service line replacement and obtain written permission to replace the portion of the service line under their property (i.e., from the curb to the house). However, the rules provide that property owners are permitted to opt-out by refusing the replacement. If a property owner refuses to give permission, then the supply may not replace that private service line.

We will continue to monitor the new MLCR’s effect on municipalities and any new litigation challenging the rules. In the meantime, if you would like assistance with preparing notices and permits for service line replacements or have any questions relating to the MLCRs and their affect on your community, please contact a Mika Meyers’ municipal attorney for guidance.