U.S. News

07.26.14

Detroit Shuts Off Water to Residents but Not to Businesses Who Owe Millions

More than 15,000 households have had their taps turned off for being past due. Yet the bankrupt city hasn’t touched 40 businesses who owe $9.5 million in total.

DETROIT — In Detroit, even the most basic necessity cannot be taken for granted.

Some 15,000 residential customers have lost water service, and tens of thousands more are in danger of losing it, thanks to past due bills. But businesses owing hundreds of thousands of dollars have not been disconnected, Detroit Water and Sewerage Department records show.

According to a department list, the top 40 commercial and industrial accounts have past-due accounts totaling $9.5 million. That list includes apartment complexes, the Chrysler Group, real estate agencies, a laundromat and even a cemetery.

Meanwhile, stories of residential shutoffs abound. Tangela Harris been doing her best to keep up, but when she was no longer able to work she had trouble stretching her monthly $780 in disability benefits to pay the water bill. So her water service was disconnected. Harris has since come up with $1,100 to have services restored but is having trouble keeping her $180 monthly payment to the water department. On top of that, her home has entered foreclosure because Detroit water bills are rolled into property taxes.

“They can say my house is condemned and take it,” said Harris, 38, a community organizer. “People think we’re not prioritizing, but it’s not that simple when you’re under the poverty level. It’s a different mindset.”

In March, the Detroit Water and Sewerage Department announced it was going after deliquent accounts in earnest after a reprieve this past winter. The city is in bankruptcy, after all, and looking for revenue where it can. In March, about half the department’s customers had outstanding balances, meaning they are at least 60 days past due or more than $150 behind. That amounted to $118 million in charges. Through June 30, service was severed to 15,200 customers, and about 92,000 remain in shutoff status.

The $9.5 million owed by non-residents would amount to $625 for each severed customer and $103 for those in shutoff status.

So far, most businesses have been exempt. At the beginning of July, the department issued 10-day shutoff notices to 250 commercial customers. Despite repeated requests, the department was unable to say how many of those, if any, have had their services discontinued. Vargo Golf Co., an Oakland County-based golf course management firm, owes $478,000, while a business called Russell Industrial Associations is more than $181,000 behind.

The $9.5 million owed by non-residents would amount to $625 for each severed customer.

The No. 1 scofflaw isn’t a business but the State of Michigan, which the department said owes more than $5 million. Dave Murray, deputy press secretary for Gov. Rick Snyder (who is sheparding Detroit through the largest municipal bankruptcy in U.S. history) said the bills have been disputed for the last five years over a possible broken water main near the old state fairgrounds in the city limits, which was mothballed several years ago.

“The attorney general’s office has entered into discussions with the City of Detroit, and it would be inappropriate to comment on ongoing negotiations,” Murray said.

Detroit Emergency Manager Bill Nowling said that, particularly among businesses, conflicting accounts of what is owed are not unusual. “What happens is that they dispute them, and there’s a process for regulating disputes. It doesn’t mean they won’t get shut off,” he said.

Kevyn Orr, Detroit’s emergency financial manager, has generally defended the shutoffs, saying payment arrangements can be made. He’s also said many customers have since paid up and have had services restored.

Valerie Blakely hopes she’ll be cut some slack. The Detroit mother of five said she had couldn’t both keep her house warm during one of the worst winters in Michigan history and pay her water bill. When workers recently showed up to disconnect services, she blocked them. They then proceeded to turn off services to nearly every house on her block, she said.

“My neighbors were standing out in the street, unable to cook or do their dishes,” she said, adding that she has about three weeks to pay up, or face another visit by an agency contracted to shut off water.

Rome Adams works for Go Detroit, a community organization that delivers free bottles of water to customers affected by the water department’s crackdown. He said he’s seen pitiful living conditions.

“I feel like they should go after the businesses first, because most of them can afford to pay better than the people,” he said, shaking his head.

More than 500 people rallied in downtown Detroit last week against the disconnections, calling them humanitarian violations. Since then, the department has suspended shutoffs for about two weeks. A caravan from Windsor, Ontario across the river recently delivered a couple of hundred gallons to needy customers.

“This is bad,” Rome said.