FLINT, MI -- Approximately 8,000 Flint residents are back at risk of losing their homes over unpaid water bills after Flint's state-appointed financial board struck down a one-year moratorium on water liens.

At a Receivership Transition Advisory Board meeting on Tuesday, June 27, the board -- appointed by Gov. Rick Snyder to run the city's financial affairs -- struck down a resolution from city council to put a one-year hold on water tax liens.

Calling the water lien ordinance outdated, city council approved the moratorium on the bills in May.

However, all the council's financial decisions must be approved by RTAB before going into effect.

RTAB Chair Frederick Headen said that while he originally intended to approve the moratorium, after city council refrained from approving a long-term water contract with the Great Lakes Authority by June 26, the added costs of a short-term water contract combined with the moratorium created too large of a financial burden on the city of Flint.

"I think the moratorium plus extending the temporary water source contract would have somewhat of a profound impact on the initial water fund to the proximity of $12 million," Headen said. "It's important to view the water lien moratorium not in isolation but in the context of other issues, including budget."

The liens cover two years of delinquent water and sewer billings with a specified balance which residents were instructed to pay no later than May 19 in order avoid the billings being placed on the tax roll. This could ultimately lead to homeowners losing their homes, according to council's resolution.

Before the board voted, interim Flint Chief Financial Officer David Sabuda said that the city could potentially lose $2.3 million if the moratorium stayed in place and residents did not make good on their water bills.

Sabuda said the moratorium is a "significant hit" to the city's budget when you consider the additional $1.9 million Flint will pay to remain on the GLWA short-term water contract until the end of September.

After a heated meeting on Monday, June 26, council voted to extend the short-term contract until September 30. The council has also refused to sign on a proposed 30-year contract with GLWA, which is supported by Snyder and Mayor Karen Weaver.

Council President Kerry Nelson said the water liens were based on "an ordinance that was put in place 53 years ago" and called the move "punishment" on the state's part for the council not approving its water contract.

"It's do it my way on the water deal or be punished," Nelson said. "I'm disturbed and disappointed RTAB would not listen to our citizens and council. This would've helped a lot of people. Mr. Sabuda is a numbers man and can go back to his cushy community, but our citizens are left to suffer."

Ari Adler, a spokesperson for Snyder, said that the "RTAB process is in place to ensure fiscal accountability and stability are maintained as communities recover from prior financial distress."

"Gov. Snyder supports the RTAB process and the difficult work that these boards are doing to protect all Michigan taxpayers," Adler said.

Water shutoff warnings have flooded Flint residents' mailboxes for months. In May, roughly 8,000 received notices warning that they could lose their homes if they do not make good on their water bills.

In March, the city warned 31 residents - as well as two apartment complexes - that the water would be shut off if outstanding bills were not paid immediately.

City spokesperson Kristin Moore could not immediately be reached for comment on the denial of the moratorium.

However, Flint Mayor Karen Weaver previously said she understood the community's concerns over the moratorium but also recognized the financial issues facing the city.

"I have met with our interim city attorney and finance director and they say the city is obligated by local ordinance to follow this procedure, and we must follow the law," Weaver's previous statement said. "As the mayor of Flint and as a Flint resident, I understand the concerns that have been raised and I am working to see if any changes or something can be done to help those affected by this, especially given the extraordinary circumstances we have endured due to the water crisis."

Flint's city council previously postponed discussion on a 30-year contract with GLWA - recommended by Snyder and Weaver - for two weeks from June 23.