I think a lot of people are jumping to the conclusion that the decision to switch water systems was motivated by greedy politicians looking to cash in by privatizing the system or something like that.
As someone who lives in a community served by the Detroit Water Department, I would argue that the residents of Flint had been complaining to their city council and mayor for years about their escalating water bills, and wanted an alternative. This was essentially a bottom up decision, not a top down one. Democracy at work. City officials then failed to do any due diligence, and the water department was clearly incapable of treating their own water despite calling in consultants. The state and the feds failed to properly oversee what the city was doing.
For a little backstory, the Detroit Water Department is severely dysfunctional. Sure the water is safe to drink, but the organization is a bloated and poorly run monopoly. The DWD was under federal supervision for 36 years ending in 2013. An audit by an outside agency found that 81% of their employees were unnecessary, many in do-nothing jobs after being appointed as favors from the former mayor and city council. The union was so deeply embedded and so reactionary that management could not even change job titles - they still had a "horseshoer" on payroll, but no horses. Seniority was more important than education/qualifications/experience and you could bump someone out of their job if you had been there longer.
The DWD estimates at least 10% of the water they treat is lost through leaks, broken hydrants, and scrapped plumbing. They collect maybe half of the money due from city residents. They are so far behind replacing century-old obsolete water mains that it would take them 250 years to catch up at the rate they are fixing them. Add to this their grossly swollen payroll, and the department simply jacks up rates by 7-10% a year to cover the tab. And cities pay it because they have to.
I think every city or municipality that is a customer of DWD has explored the idea of building and operating their own system to get away from the runaway costs. The massive startup investment required usually quashes those dreams.