Kriston Capps is a staff writer for CityLab covering housing, architecture, and politics. He previously worked as a senior editor for Architect magazine.
In Detroit and Baltimore, residents behind on water payments prepare to go without. Why aren’t utilities going after delinquent big companies first?
It’s as sure a sign as any that summer is on its way. The door hangers find their door knobs, the notices show up in the mail, and the utility vans begin making their rounds.
April through October is water shut-off season, when municipal utilities enforce overdue bills by cutting the water to businesses and homes. For cities, it’s an opportunity to make good on millions in delinquent payments. For the United Nations, it’s a crisis that represents a violation of human rights.
For many residents of Baltimore and Detroit, water shut-off season stretches into the dog days of summer. “There are extreme levels of inflexibility with both of these cities,” says Tiffani Ashley Bell, executive director for the Detroit Water Project.
And shut-off season has only just begun.
What Shut-Off Season Means for Detroit
This week, the Detroit Water and Sewerage Department began taking action on thousands of warning notices and hangers delivered so far this season. Homes that owe more than $150 or are 60 days late on their water bills are due to receive shut-offs, unless they’ve paid up or entered into a payment program. These overdue accounts number into the tens of thousands.
This season looks like a repeat of last year, when the Detroit utility launched a “sustained shut-off effort” to bring some 90,000 delinquent accounts up to speed. Thanks to Canada, Detroit’s utility earned the ire of the United Nations, who dispatched human-rights experts to Detroit to monitor the situation. Two U.N. special rapporteurs chastised Detroit for not doing enough to protect the poor and vulnerable during these collections efforts. That hasn’t deterred the utility from resuming collections this year.
For its part, the Detroit Water and Sewerage Department said last year that 60 percent of the customers who receive shut-off notices get their accounts current within 24 hours. And the notices are delivered to addresses, which doesn’t necessarily mean account-holders: Some homes they attempt to collect on are vacant.
But there is some good news for Detroit. The Detroit Water Project—which Bell and Kristy Tillman co-founded as a grassroots charity last year—has collected more than $180,000 in donations to help some 900 families keep the water on.
One donor stepped up in a big way this week. Miller Buckfire, the investment bank for the city, gave $1 million to The Heat and Warmth Fund to help residents with shut-offs. THAW aims to launch its new water program on June 1, according to the Detroit Free Press; the money will assist some 1,500 households. (Call it giving back: Miller Buckfire stands to collect $28 million from Detroit for restructuring its debts during the city’s bankruptcy proceedings.)
What Shut-Off Season Means for Baltimore
Summer shut-off season started with a splash in Baltimore last month. Protesters rallied after the city issued notices to 25,000 customers who owe collectively $40 million in overdue bills. Beyond the large figures, though, shut-off season doesn’t mean the same thing to Charm City as it does to Motor City.
For starters, Detroit’s water utility was caught up in the city’s fraught bankruptcy proceedings. Detroit’s bond obligations related to the water department are the city’s largest form of secured debt. The broad collections sweep was launched, in part, as a hurry-up effort to sweeten the deal in any privatization bids for the utility. (The privatization scheme is still ongoing and still controversial.)
Further, the city of Baltimore appears to be going after customers in Baltimore County—outside Baltimore City. The Baltimore Sun reports that the enforcement of the collections campaign—in which the city has cut the water for some 1,600 customers—has been “starkly uneven” so far. That said, Baltimore is more forgiving than Detroit, according to Bell. There’s now a Baltimore Water Project that lets donors give money to help families meet their delinquent utility bills.
In one respect, shut-off season looks the same no matter where you go: Cities aren’t collecting on delinquent commercial and government account-holders, despite the fact that they owe big time. Sparrows Point, a steel mill, owes Baltimore $7.3 million for water, for example, The Baltimore Sun reports. All told, some 350 commercial accounts owe $15 million to the city.
Last July, the Detroit water utility announced that it would start pursuing delinquent bills for commercial and industrial properties. The announcement excluded some of the biggest and most delinquent account-holders: Ford Field, home of the Detroit Lions, and Joe Louis Arena, home of the Detroit Red Wings.
The utility later reported that these accounts were up to speed—but no matter. At the time, Detroit literally could not collect on commercial accounts. “[T]he department’s contractor to help carry out the shut-offs is equipped to handle only residential properties,” the Detroit Free Press reported. “The department had to make arrangements for its own employees to cut off service for commercial customers.”
What Detroit and Baltimore Could Do Instead
It’s plausible, as a spokesperson for Detroit’s water authority put it, that the water bill “isn’t the first bill people pay, it’s the last bill they pay—after the credit card, after the cell phone, after the cable.”
At the same time, U.N. Special Rapporteur Catarina de Albuquerque is absolutely correct: “It is contrary to human rights to disconnect water from people who simply do not have the means to pay their bills.”
Cities can’t not collect water bills. Yet the collection efforts in Baltimore and Detroit get it exactly backward: They should first be pursuing commercial, governmental, and industrial account-holders up front, not residents. It may prove expensive (in terms of legal fees) to get the big fish—stadiums, for example, that manage to rack up millions in deferred utility payments. But many commercial accounts owe merely (merely!) thousands. These companies are less likely to take utilities to court after cities take them to task.
Second, Baltimore and Detroit need to offer amnesties. Scrubbing some overdue balances could help these cities to positively identify homeowners, improve city records, and begin collecting. The due diligence on collection efforts has to come at some cost to the city; any bills below a certain threshold should be wiped out.
Barring amnesty, some simple flexibility would go a long way. In San Francisco, for example, residents who show proof that a leak has led to higher water bills (and that the leak’s been fixed) can get some portion of their overdue bills forgiven.
“In Baltimore, they want you to come up with 50 percent of what you owe to get on a payment plan,” Bell says. Customers who miss an installment have to put down another big payment to get back on the plan. That’s how people fall off. “It's the same thing in Detroit.”
Finally, cities need to recognize that a one-rate-fits-all approach is destined to fail. Last October, Al Jazeera spoke to Rochelle McCaskill, a Detroit resident who pays $600 of her $672 disability check toward rent—and therefore absolutely cannot afford water. It’s disgraceful to charge McCaskill anything at all. Many other residents face less dire straits, but still may not be able to make regular payments. Cities need to take their customers’ financial situations into account.
Shutting off water to vulnerable residents is worse than inhumane: It’s a potential public-health crisis in the making. But for now, shut-off season isn’t going anywhere in Detroit or Baltimore. For the most part, it’s a necessary evil: Most account-holders do make good on their overdue bills when cities gets serious. But cities could do more to ensure that it isn’t entirely evil.