Flint, MI—McLaren Hospital’s contribution to the Flint water crisis settlement may go from $20 million to nothing.
The Flint City Council Sept. 13 did not approve a resolution that would allow McLaren Hospital to reduce their contributions to the water lawsuit settlement.
Without council’s approval to stay in the settlement for less money, McLaren may exercise their walk-away rights, leaving the original $641.25 million water settlement $20 million short.
The settlement, announced in August of last year, would resolve all litigation related to the water crisis against the State of Michigan, the City of Flint, Rowe Engineering, and McLaren Hospital.
The State of Michigan is contributing $600 million, the City of Flint is contributing $20 million, Rowe Engineering is contributing $1.25 million, and McLaren Hospital was set to contribute $20 million.
McLaren, specifically, has the right to walk away from the settlement agreement only if people who allege exposure to Legionella at McLaren Flint Hospital do not register for the settlement. Since a majority of those people did not register for the settlement, McLaren therefore has the legal right to leave the settlement, according to the settlement agreement.
But, a resolution came before the council for McLaren to reduce their contributions to the settlement rather than walking away entirely. This is something that the other settlement parties have agreed to already “quite some time ago,” said Assistant City Attorney William Kim during a council meeting on Sept. 13.
At a committee meeting on Sept. 8, the council was first presented with the resolution that would allow McLaren to remain a part of the settlement, but reduce their contributions from $20 million to $5 million.
Attorney Rich Berg, who represents the City of Flint as an entity in the settlement, urged the council to vote to approve the resolution at that meeting.
“It’s $5 million more than would be there if McLaren walks away, which they have the right to do,” Berg said. “So the end result is, voting in favor of this amendment means there is more money available for the citizens than if you vote against it. Voting against the amendment means you’re taking $5 million away from the citizens.”
The council voted to send the resolution to the regular council meeting, but multiple members expressed their dissatisfaction with it then, and again at the meeting on Sept. 13.
Councilwoman Monica Galloway asked if the city could face any kind of legal issues by not approving the resolution, and Attorney Kim said he didn’t believe so.
“We don’t believe that we are directly exposing the city to liability, however, several of these parties have expressed that they would be extremely unhappy,” Kim said.
Galloway called this an “intimidation tactic.”
“What about the fact that the residents of this community are extremely unhappy about the dollar amount that is being offered to subsidize anything that has happened to us in the last seven years?,” Galloway said. “Does anybody care about how extremely disappointed or angry we are about what is in place before us?”
Councilwoman Eva Worthing urged her colleagues to vote based on facts, and not emotions.
“No one is saying that we don’t care about those who were affected by this water crisis, but you can either vote yes and help the residents the most, or you can vote no, and you’re not helping them at all,” Worthing said.
The council voted 5-4 to “drop” the resolution, which is a little different than voting not to approve it.
When the council votes to drop a resolution, it is removed from the agenda, and cannot come back to the council for 30 days. In theory, this could come back after 30 days for the council to vote again, but for now, McLaren did not get the approval that it needed to stay in the settlement with reduced contributions.
Without that approval, McLaren has two options: stay in the settlement with $20 million, or walk away entirely.