Battle over water system exposes region's rifts JOHN GALLAGHER Free Press Business Writer January 21,

Regional Cooperation This week's latest round of sparring over control of metro Detroit's water system proves again how hard regional cooperation is in southeast Michigan. Regional leaders admit metro Detroit remains behind most major urban areas when it comes to cooperating across city and suburban lines. Solutions to problems like regional transit and the water system continue to elude even well-meaning leaders. "It is a one-step-forward, two-steps-back challenge that we have" when it comes to regionalism, said Paul Tait, executive director of the Southeast Michigan Council of Governments or SEMCOG, a regional planning agency.

Some Successes That said, when the Big Four -- Detroit Mayor Dave Bing, Wayne County Executive Robert Ficano, Oakland County Executive L. Brooks Patterson and newly elected Macomb County Executive Mark Hackel -- meet today for a discussion on regionalism hosted by the Economic Club of Detroit, they can point to at least some successes. The latest and most impressive: a new regional authority that has run the Cobo Center for more than a year. The board spiffed up the convention center, hired a manager, and borrowed $80 million for more improvements.

Cobo, zoo show region can work together As thousands of visitors flock to Cobo Center this week for the annual auto show, the most notable new model on display may be Cobo itself, or at least the new regional authority that runs it. Cobo's new five-member Detroit Regional Convention Facility Authority, which took control of Cobo from the City of Detroit in late 2009, already has paid for improvements to Cobo's internal systems, put a new management firm in place and borrowed $80 million to pay for future improvements. "I think a lot of people expected it to fail, quite frankly," said Larry Alexander, chairman of the Cobo authority. "But I think we can look back and say when you're focused on making business decisions in a logical, professional way... people can get work done.“

Regional problems yet to find solutions Transit: The suburban SMART bus system still operates independently of the city buses operated by the Detroit Department of Transportation. Even worse, Detroit is the only one of more than two dozen major cities to lack a regional transportation authority. Such a board could build and operate a mass- transit system uniting metro Detroit, something many regional planners say is badly needed. Water: The City of Detroit's water department delivers drinking water to about 3 million city and suburban customers. But the suburbs have feuded for years with city officials over water rates and control of the system.

Economics of Cooperation High fixed costs; relatively low marginal costs. AFC ATC, Why? # of consumers $ With small base, the average costs are HIGH With larger base, you decrease average costs, and you increase the demand for the services. D1D1 D2D2 D3D3