Detroit unlikely to forgive water debts of poor

Joel Kurth | The Detroit News

An emerging plan to address massive water shut-offs in Detroit likely will stress conservation, convenience and some form of assistance — but not debt forgiveness.

A so-called blue ribbon committee studying water affordability in Detroit met for the final time Tuesday before finalizing a report due in January to the City Council.

Among the questions remaining: Can rates be structured to help the needy without raising them for everyone else? Perhaps not, some panelists said.

“No matter what rate design we implement, someone is going to get hurt,” said Marcus Hudson, chief financial officer for the Detroit Water and Sewerage Department.

The panel of national experts and community leaders was convened this fall following shut-offs that attracted international attention and calls for United Nations intervention. In the past 12 months, some 23,000 accounts were turned off, while nearly a third of the city’s 200,000 customers now are at least 60 days past due.

The average monthly bill in Detroit is about $76 and rates are expected to increase 8 to 10 percent per year. Some 39,000 residents are now on repayment plans of old debts that can easily push monthly charges to $150.

Activists have called for amnesty for those who are behind on bills, stressing widespread poverty in Detroit and chronic billing problems that preceded the shut-offs.

Panelists, though, dismissed the idea as impractical and unfair. Some also took a dim view of proposals to reduce debts in exchange for sticking to repayment plans.

“Debt forgiveness is asking for trouble,” said Julius Ciaccia, CEO of the Northeast Ohio Regional Sewer District.

Detroiters struggle to survive without city water Fayette Coleman talks about her water shutoff and how she collects rain water for her daily use.

Likewise, legal and practical issues make it less likely the plan would tie rates directly to income or values of homes. Instead, the plan could structure rates to reward those who use less water.

Also, the city will hire several collections agents who double as social workers and can direct the needy to work training programs, said Gary Brown, director of the water department.

Other elements of the plan:

■Partnering with DTE Energy on payment kiosks. The energy giant has agreed to retrofit roughly two dozen kiosks in Detroit to accept cash payments for water bills, Brown said.

■Expanding relief efforts for the 40 percent of residents who live below federal poverty levels.

The department has about $1 million in assistance now. In January, roughly another $4.5 million will become available in a program by the Great Lakes Water Authority, a newly created regional system that manages water and sewer service in the three-county system.

■Changing billing systems to make owners of homes responsible for bills. Now, bills are addressed to “resident,” so the city doesn’t know who its customers are or whether they need help.

Last year, 484 tax-foreclosed homes had water bills of more than $5,000, Wayne County records show. This year, the number fell to 263.

jkurth@detroitnews.com

Twitter: @cityhallinsider