The City of Detroit has decided to shut off water for customers of the Water and Sewage department who haven’t paid their bills for access and usage of the city’s water. Activists and citizens of Detroit have expressed disappointment and outrage over the city’s handling of the water utility department, and U.N. officials have even gone so far as to condemn the city for the shut-offs.
Here’s what happened.
Before the shutoffs occurred, the Detroit water and sewage department faced debts and uncollected payment upwards of $90 million. A substantial amount of that pre-shut off debt stems from the department’s lax attempts to collect payment from customers. In hopes of reversing the dismal financial situation, city officials turned to the old-fashioned tactic of shutting the water off, in hopes that this would encourage citizens to pay for their water usage.
The results were mixed; over half of the 17,000 citizens who had their water shut off subsequently paid their bills and had their water restored, (this is according to city officials), while citizens who really couldn’t afford the bills met the shutoffs with outrage.
More recently following the U.N.’s condemnation of the water shut-offs, the city of Detroit released a statement outlining modifications to their initial and more stringent shut-off strategy.
Changes contained in the modification include desisting holds on properties facing foreclosures who can’t meet the financial obligations of paying water utilities on time, setting up payment plans with struggling with their payments and additional funds and resources for citizens who need assistance paying their water bill, namely – The Detroit Water Fund, which includes nearly $2 million devoted solely to the cause.
This issue is simple to a certain degree, there is no doubt that it is a demonstrable consequence of misaligned of priorities, both on behalf of the city government and (some) of the citizens of Detroit. After filing for the largest municipal bankruptcy in U.S. history, Detroit was blinded by an overwhelming amount of duties to get out of bankruptcy.
One of the biggest concerns with the bankruptcy filing had to do with pensions of city government employees and retirees; many of which saw their pensions take cuts for the sake of digging the city out of the $18 Billion debt accrued. The second largest concern was their water and sewage department’s financial state, which contained over $6 Billion of the bankruptcy debt alone.
Now let’s be clear here, the fact the Detroit fell into such bankruptcy and problems with its Water and Sewage Department to such an extreme extent is a transparent sign of failure to the constituency that is the citizens of Detroit. The fact that pensions had to take cuts in the first place for current and retired employees speaks in volumes about the fiscal irresponsibility that the city had in allowing those events to transpire that far.
What really makes matters worse is looking into how Detroit initially handled the water situation. After deciding to restructure the financial integrity of the water and sewage department, the city realized that delinquent customers continued to abstain from paying their bills and shifted the costs onto dependable customers.
If that wasn’t enough to spark outrage, after shutting off the water to more than 14,000 homes, the city took longer than two months to even begin shutting off water access to 36 delinquent commercial businesses- 12 of which contained delinquencies totaling more than $100,000. The city responded to criticisms from citizens claiming the commercial businesses were gaining favoritism over the households affected by stating,
“The contractor couldn’t shut them off…They’re not equipped to shut off a larger industry like a Ford Field or what have you.”
As if that excuses two months of delayed action.
The irresponsibility of the City government is mostly to blame for this situation, however some of the delinquent citizens must be held accountable too, after all; the citizens who paid immediately after having their water shut off demonstrated that the water bill wasn’t so much a priority as it was an inconvenience.
This irresponsibility is also illustrated by customers who could have initially afforded to pay their water bills, but chose not to for whatever reason and waited for their water to be shut off or for their debts to accumulate to untamable amounts.
Shifting the blame to the city for not collecting sooner is easy to do because yes, the city is responsible for collecting the payment that it seeks- but why did it take so long for these customers to take care of their financial obligations or voice their concerns over their bills?
After the City’s meeting with U.N. officials, Chief Staff Alexis Wiley noted a perceived narrowness by their perspective in a statement:
“Hundreds of cities in Michigan and thousands nationwide shut off water to people who do not pay. It is a standard practice among utilities. Yet for some reason, the UN is focusing only on Detroit, apparently to the exclusion of all others.”
The way that the city handled the Water and Sewage department’s financial crisis was deplorable, and the citizens were merely following example set forth by their so-called community leaders who took oaths of responsibility and failed them in providing it through the practice of their policies.
But that’s not to say things aren’t capable of being steered on to the right track.
The city does seem to be making strides in atoning for its sins, just yesterday it reappointed retirement investment committees to oversee future developments in pension funding. This latest move is one of the essential last steps in resolving Detroit’s bankruptcy filing, and will lead the city to its way of eventually curing the blight that has been its national image.