Despite Detroit efforts to help, water shutoffs loom

Despite increased efforts last year to help many Detroiters keep up with their water bills, the city is back in frustrating, familiar territory again — getting ready to cut off water to about 28,000 customers.

The shutoffs will begin next month. A city report obtained by the Free Press shows more than 73,000 active residential accounts with $47 million in bills at least two months late.

The documents show the city has been unable to move many customers into good standing. As of last June, there were more than 79,000 delinquent accounts owing $42 million.

Additionally, activists who've attended meetings with city officials say they were told that about 13,000 Detroit customers defaulted in November and December last year on payment plans designed to keep them out of delinquency, a number that city officials don't dispute.

Detroit is under pressure to quickly improve the water department's financial outlook as it continues contentious talks to finalize a deal this summer to create a new regional water authority.

With so many shutoffs looming, the water department could face a repeat of last summer, when its aggressive policy of terminating service to delinquent households drew local and international criticism from those who said it was a denial of a basic human right to clean water.

Gary Brown, Mayor Mike Duggan's group executive for operations, acknowledged that the payment plans have not succeeded in significantly reducing late fees and getting more customers current on their bills. He said the city's focus needs to be on helping low-income residential customers connect with assistance programs and with conservation measures, such as fixing leaky pipes and toilets.

"We're cognizant" that many Detroiters live in poverty, "and we'll do whatever we can to help them resolve those issues," Brown said. "It's not the financial help that's lacking," but rather having a system in place to "ensure they have access to all the services that are out there."

The total pool of money available to help low-income households across southeast Michigan starting this summer would be $6 million, raised through money the water systems will set aside and donations to the Detroit Water Fund.

Mayor Mike Duggan has remained adamant that water service cannot be provided for free without raising rates for all, and that the city has no way to create a system that charges for water based on household income, an idea advocates and some city officials have urged his administration to consider.

The city has tried to make it easier for residents to get on payment plans to get out of shutoff status. Water customers can do so by paying as little as 10% of their overdue bill on top of their regular monthly bill.

But that model of assistance is flawed, according to critics who point to the persistent number of delinquencies and thousands of residents who stand to lose access to water.

"These assistance plans are Band-Aids. They are not a solution," said Lynna Kaucheck, a senior organizer with Food & Water Watch who has closely monitored shutoffs in Detroit. "If you can't afford to be on the assistance plan, it doesn't matter if you know about it."

Trying to catch up

For Jenene Carter, a single mother who has a 12-year-old living with her in northwest Detroit, it has been difficult to keep up with her monthly water bill and also pay back $1,000 she owes from previous bills. She had to come up with a $500 down payment to get onto a payment plan and has so far kept up with it, she said.

"I'm robbing Peter to pay Paul, but I know I've got to do it," Carter, 51, said this week at the House of Help Community Center, a nonprofit Christian ministry in northwest Detroit that provides food and clothing for low-income families along with summer activities for children.

After working for years in the counseling and medical fields, Carter has been on disability since 2007 with disc and nerve problems in her back that at times left her unable to walk.

Rather than focus on providing assistance to customers behind in their bills, activists and some city officials have urged Duggan and the water department to consider a different structure — one that sets rates based on income to ensure they are affordable.

But Duggan has ruled out income-based payment plans, saying that since water department accounts are billed to addresses and not individuals, it's not possible to identify individuals associated with them and verify income.

Brown said Friday that the city is aware the payment plan Duggan announced last August needs to be tweaked to address affordability issues. Brown said he couldn't confirm the exact figures laid out in documents the Free Press reviewed, but he did not dispute their accuracy.

Duggan's office said it will announce adjustments next week to the payment plan program that will allow back-due amounts to be reduced by up to 50% and a 25% reduction in monthly water bills for qualifying low-income households, paid through the Detroit Water Fund, an assistance program administered by the United Way for Southeastern Michigan.

Brown said the water department and the suburbs' fledgling Great Lakes Water Authority will roll out a new program in July that adds dedicated staff to help customers keep up with their bills. Account managers at each agency will be focused on helping customers find additional financial help through social service agencies and assistance with fixing leaking pipes and toilets that can drive up monthly water use as much as 10 times as high as typical households.

Brown said the city has been consulting with DTE Energy, the region's main electric utility, on how it approaches customers who can't afford their bills.

"We've learned some lessons from them, and they have a high success rate of people successfully completing the plan," Brown said.

Further complicating the impending renewal of the residential shutoff program (it goes dormant in the winter because of freezing temperatures) are extremely complex, and sometimes contentious negotiations to finalize the shift to the new Great Lakes Water Authority. The authority, agreed upon with county leaders during the city's municipal bankruptcy last year, is not finalized but it is expected to be up and running by July 1.

The return of the shutoffs and a financial assistance program have been part of closed-door talks to coordinate the transition to the Great Lakes Water Authority.

800 notices per day

A new round of shutoffs is slated to begin in May, first targeting delinquent commercial accounts, theft of water service, and then residential customers who use 10 times the average household account, according to a written summary of a March 9 meeting. The shutoffs will target 28,000 customers.

Before crews are dispatched to shut off service to delinquent customers, the water department will start hanging 800 notices per day on doors of homes in line for a shutoff, deputy water director Darryl Latimer told the Free Press last month. The door hangers, which were not distributed when shutoffs began last year, are part of a more thorough effort to inform customers about ways to avoid losing water service.

"A media campaign will be launched along with an outreach to church leaders," the notes from the March 9 meeting read. "The goal is to change the culture regarding responsibility to pay for service."

The strategy follows through on comments Duggan made when he announced his 10-point plan to address the water delinquency crisis last August. The mayor, having just taken control of the water department's operations from former emergency manager Kevyn Orr, said then that free water is not an option.

Assistance not enough

Addressing Detroiters' commitment to paying water bills is one thing. But the persistent delinquencies, as shown by the recent statistics, have raised questions about whether the current model for financial assistance is working.

The model in place uses subsidies — funded by the water department and external sources such as the United Way — to pay off delinquent bills so customers can enter payment plans and keep their water running. This year's Water Residential Assistance Program (WRAP) will have $4.5 million set aside and is to cover the city and surrounding region, according to a February report from the Detroit City Council's legislative policy division on the transformation to the regional authority.

The report says that $4.5 million is "significantly less" than needed to help Detroiters with their water bills, much less the region as a whole.

"Beyond the underfunding of the proposed WRAP is its very questionable sustainability. Months after the WRAP subsidy, potentially, brings a delinquent account up to date, and the customer agrees to a payment plan, a family that already fell behind on its water bills is highly likely to do so again," the report reads.

The report concludes that Detroit officials should at least consider a different financial assistance mode — one that focuses on setting affordable rates rather than the current model based on helping customers after they've fallen behind on their bills.

Detroit Councilwoman Raquel Castaneda-Lopez said the current model needs to be evaluated to ensure all residents have access to water.

"To minimize and avoid water shutoffs this year, we must conduct a comprehensive assessment of the program and its effectiveness at supporting residents in need," she said. "Whatever plan is adopted by the GLWA, it must take a proactive approach to assist residents before they are in danger of being shut off."

More affordable water

Although Detroit's widespread poverty stands out compared with other large U.S. cities, it is far from the only place where residents struggle to pay water bills.

Water and sewer rates throughout the country have been on the rise as municipal infrastructure ages, demanding expensive repairs. Water and wastewater bills increased by 106% from 1990 to 2006, a 4.6% average increase, according to a National Consumer Law Center report released last year.

Indeed, Detroit's rates have been on the rise. The average combined water and sewer bill increased to $70.67 a month last year, an 8.7% increase from about $65 a month. This July, Detroit water rates are expected to increase 3.4% and sewer rates 16.7% for a total increase of 12.8%.

The Philadelphia Water Department offers a mix of assistance programs, including a 25% discount for eligible seniors and payment plans for delinquent customers. One of Philadelphia's payment plans mirrors Detroit's model requiring a 10% down payment of past due fees. But another payment plan takes into account a ratepayer's disposable income.

A water affordability plan that the Detroit City Council favored in 2006 suggested rates be set annually at 2% of a ratepayer's household income. A benchmark for water affordability is often between 2% and 4% of household income, according to the National Consumer Law Center report.

Detroit's median income, according to the most recent census figures, is $26,325. An affordable water bill, based on the 2% standard, would be about $526. The average Detroit water bill, at $70.67 per month, costs $848 annually.

Brown said the new payment plan option to be rolled out this summer will focus on helping customers become self-sufficient with account managers who help identify troubles that may be driving up customers' water bills and resources that can help them — ranging from funding available through the water agencies and social services organizations to helping customers get into employment assistance programs, for example, for those who've been unable to find work.

Contact Joe Guillen: jguillen@freepress.com or 313-222-6678.

How to get help

■ If you've received a delinquency notice, the water department advises customers to call 313-267-8000 immediately to discuss a payment plan rather than waiting until service is cut off.

■ The Detroit Water Fund, operated by the Detroit Water and Sewerage Department and United Way of Southeastern Michigan, also provides assistance. For information on eligibility, call 313-267-8000. Those interested in donating to the fund or applying online for assistance may do so at www.detroitwaterfund.org.

■ Those with past-due amounts greater than $2,000 may apply for help through Wayne Metropolitan Community Action Agency at 313-388-9799.