Detroit advances $1.4B five-year capital plan as lead line replacements drain construction cash

Detroit advances $1.4B five-year capital plan as lead line replacements drain construction cashThe Detroit Water and Sewerage Department is preparing to finalize a $1.4 billion capital improvement program for FY27-31, with plans to issue new bonds in Spring 2027 to sustain aggressive lead service line and water main replacements.

The proposed $1.4 billion CIP includes $658 million for the Water Fund and $778 million for the Sewer Fund over five years.

Approximately 73.3% of the five-year budget is dedicated to water main and sewer line replacement projects.

DWSD plans to issue new bonds in Spring 2027 after spending $30 million in construction cash on lead service line replacements.

The FY27 capital budget alone totals $231.7 million.

The Detroit Water and Sewerage Department (DWSD) is advancing a $1.4 billion Capital Improvement Plan (CIP) for fiscal years 2027 through 2031, heavily prioritizing the overhaul of the city's aging underground infrastructure. According to a preliminary draft presented by Chief Financial Officer Istikhar Rahman to the Capital Improvement Subcommittee, the five-year program will allocate $658 million to the Water Fund and $778 million to the Sewer Fund. For the upcoming FY27 alone, the capital budget is set at $231.7 million, split between $108.2 million for water and $123.5 million for sewer projects. Pipeline replacement dominates the utility's medium-term strategy. Rahman noted that approximately 73.3% of the five-year budget is reserved for water main and sewer line replacement projects. The plan also commits $104 million specifically to lead service line replacements and $182 million to stormwater infrastructure projects. The aggressive pace of lead service line replacements has already impacted the utility's balance sheet. During a financial update for December 2025, Rahman reported that water construction cash has been depleting since mid-2025. DWSD utilized approximately $30 million of its construction cash for lead service line replacements, resulting in a depletion of bond money. To ensure continued funding for bond-eligible water and sewer projects, DWSD has completed planning to issue new bonds in the spring of 2027. The utility believes its current funds will carry it through the end of FY27 before the new market issuance is required. In addition to future bonds, the CIP will rely on State Revolving Fund (SRF) loans, internal improvement funds, and grants. The draft plan outlines $211 million in SRF funding for water main projects, with $65 million of that explicitly committed to lead service line replacements. On the wastewater side, the utility is leveraging $124 million in HUD Community Development Block Grant money, funneled through the City of Detroit, to fund alley sewer repair projects. The final proposed five-year CIP is scheduled to be presented to the full Board of Water Commissioners for approval on April 15, 2026.