Originally posted at: http://www.aclumich.org/democracywatch/index.php/entry/with-detroit-s-water-payment-plan-a-massive-failure-mayor-duggan-plans-changes

“Last August, after Detroit’s mass water shutoffs had attracted international condemnation, Mayor Mike Duggan implemented a 10-point plan he said would provide significant help.

“It’s taken a lot of effort to get to this point,  but I truly think we’re in a situation now where if you want to pay your bill we’ve made it easier, and if you’re truly in need we’re going to get you to the right place,” Duggan said at the time. “I think for the great majority of people in this town the whole process will get a lot better.”

More than nine months later, here’s what “a lot better” looks like:

Of the city’s 170,493 residential customers, 73,457 were at least 60 days past due as of the end of February. That means that, under the Detroit Water and Sewerage Department’s (DWSD) current guidelines, more than 43 percent of all Detroit homes could face service termination once looming shutoffs resume following an overhaul of Duggan’s 10-point plan.

A key component of Duggan’s plan is a supposedly “affordable” payment system the mayor said would help keep water flowing to delinquent customers by making it easier for them to pay off arrearages. That plan, however, has proven to be an almost complete failure.

According to the most recent numbers provided by Detroit’s Department of Water and Sewerage, 24,743 residential customers are enrolled in a payment plan. Of that number, 24,450 are at least 60 days past due on their payments—meaning that their homes are in danger of losing water service once the city resumes shutoffs.

Stated another way, only 300 of the 24,743 customers put on the mayor’s payment plan were able to keep up with their payments and ensure their water will keep flowing.

“You didn’t need to be a rocket scientist to figure out what the outcome would be,” said Maureen Taylor, chair of the Michigan Welfare Rights Organization. “If people are already unable to pay their bills, how could you expect them to keep up if you add past-due payments on top of that? The plan was fundamentally flawed from the beginning, and we said that.”

In all, more than 31,000 homes had their water service terminated last year. The process came to a near-halt over the winter, when snow and frozen ground make access to shutoff valves difficult.

With the spring thaw, though, the Detroit Department of Water and Sewerage resumed cutting off service to delinquent commercial customers and residences that have illegal hookups—but delayed re-starting the mass shutoffs of residential customers while the mayor’s office reviews its policies and looks for ways to improve its 10-point plan.

Asked about the current program’s failure, Gary Brown – Duggan’s group executive for operations — responded with an email outlining major changes the administration intends to make to the current program. The changes will coincide with the planned implementation of the Great Lakes Water Authority, a new regional body scheduled to take charge of wholesale water and sewer operations for southeast Michigan this summer.

“Beginning July 1st, water customers in the tri-county area will have for the first time a $6 million water assistance when the Great Lakes Water Authority [GLWA] is fully up and running. “

It is not clear where that $6 million figure comes from. To this point, it has consistently been reported that the GLWA would initially $4.5 million available annually to assist low-income customers throughout the entire region.

No study has yet been done to determine what the region’s actual needs are in terms of assistance to low-income customers.

In conjunction with the implementation of the GLWA, Brown said the Duggan administration “will roll out a new plan” modeled directly after DTE’s Low Income Self-Sufficiency Plan (LSP).

That plan, said Brown, “has been highly successful.”

“We are working with 30 different social service agencies to finalize the eligibility criteria for the new program, which will be very similar to DTE.  That process should be completed in the next few weeks.  These agencies also will serve as our partners, to which we can refer customers for additional resources and support for water bills or other needs. “

Brown said the new plan will be based on three components:

·      Predictability:  The city will help established a fixed monthly bill (based on average usage).

·      Incentive to pay:  By reducing their arrearage, the city will make monthly bill payment more manageable.  Payment and assistance plans will take into account the account holder’s income level.

·      Sustainability:  Under this new plan, the city will have account managers to work directly with customers to provide ongoing support and to make referrals to our partner agencies.

Until the GLWA program is up and running, Brown added, the city will be making the following changes:

·      The Detroit Water Fund now will pay up to 50 percent of a customer’s arrearage and 25 percent toward delinquent bills.

·      Customers who default out of the water fund plan still will be able to apply for a payment plan. It used to be that you were required to be in a payment plan to be eligible for water assistance funds.

Taylor said the mayor’s newest proposal is a “step in the right direction” and should lead to improvements, but that it is still insufficient.

What’s really needed, she said, is not an assistance program, which is what the mayor and the GLWA are proposing, but rather a true “affordability” plan that limits the amount residential customers pay based on a percentage of their income. The U.S. Environmental Protection Agency recommends that water rates not exceed 2.5 percent of a customer’s income.

Taylor and her group are among those calling for the city to implement an income-based water affordability plan.

“Water has to be affordable,” Taylor said. “How you make it affordable is that you arrive at a percentage of household income and start from there.”

That’s not going to happen, said Brown.

“It would not be possible for us to take the address based information we have for our accounts and be able to investigate and verify income for each one of those accounts, especially since income levels fluctuate,” he said.

It’s not clear how that statement jibes with his comment that payment and assistance plans will take into account the account holder’s income level.

It is also not clear why cities such as Cleveland and Portland, Ore. can handle having affordability programs based on income, but Detroit can’t.

Meanwhile, two programs that have been established to help people with cash assistance to avoid shutoffs are woefully underfunded.

The Detroit Water Fund Program, a partnership between DWSD and the United Way for Southeastern Michigan, has $1.4 million. People in need of assistance can contact United Way by phoning 2-1-1.

The city’s Detroit Residential Water Assistance Program, a joint venture between DWSD and The Heat and Warmth Fund, after assisting 691 customers, has just $132,078 remaining.

Together the two funds contain just over $1.5 million.

By comparison, residential customers currently owe more than $66.6 million, with $47.3 million at least 60 days past due, according to the most recent report available from DWSD.

Making matters worse, water and sewer bills are slated to rise a combined 12.8 percent if the Detroit City Council approves a rate hike already approved by the DWSD board.

“The city continues to avoid the truth,” said Taylor. “And the truth is that Detroit’s poor people can’t afford to pay what the city wants them to pay.”

Curt Guyette is an investigative reporter for the ACLU of Michigan. His work is funded by a grant from the Ford Foundation.

http://www.aclumich.org/democracywatch/index.php/entry/with-detroit-s-water-payment-plan-a-massive-failure-mayor-duggan-plans-changes