The Federal Reserve is preparing to pay $5 billion to help pay for water and sewer systems in Flint, Mich., after a deadly water supply crisis forced the state to shut off taps and ration water.
The Federal Reserve’s decision to pay the state, the first such payment in the United States, comes after Gov.
Rick Snyder and his administration acknowledged that a “significant number” of residents of Flint’s poorest ZIP code were at risk of having their water turned off for weeks after residents switched to the Flint River as a precaution against lead poisoning.
Snyder has acknowledged the city’s water problems, and he has promised to help people affected by the crisis.
But a number of state officials have insisted that the state was too slow to react and blamed the crisis on Gov.
Daylin Leach, a Republican who was not sworn in until December.
A federal judge on Friday ordered Leach to pay more than $1.5 billion in damages to residents of the city of Flint and its surrounding area, but that ruling is not binding on the federal government.
The judge ruled that the governor must pay the amount, which will include a $1 billion payment to a federal trust fund that provides funding to states and cities that are facing financial challenges.
In a statement Friday, the Fed said it has committed to helping Flint “as soon as possible.”
The central bank said it would offer a full range of financial assistance, including loan guarantees, as well as cash grants to cover the costs of providing essential services to residents.
The federal agency said it plans to work with the governor and other officials to develop a long-term strategy to reduce water and other utility costs, including the use of corrosion control treatments.