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‘Water isn’t free’

Despite errors, contradictions, DWSD continues water shutoffs

By Phreddy Wischusen and Zenobia Jeffries
The Michigan Citizen

DETROIT — While the Detroit Water and Sewerage Department has pursued an increasingly aggressive payment collection/water shutoff campaign over the past few months, media reports have alleged Detroit residents weren’t the only ones behind on their bills. Billionaire stadium owner Mike Ilitch’s company Olympia Development was reportedly also delinquent.

Last week, with shutoff protests gaining international attention and a U.N. reprimand of the shutoff policy, DWSD released a list of other corporations and entities who owed, including the Michigan Science Center.

Broken fire hydrant gushes while Homrich employees shut off water to houses. PHREDDY WISCHUSEN PHOTOS

Broken fire hydrant gushes while Homrich employees shut off water to houses. PHREDDY WISCHUSEN PHOTOS

DWSD, however, admits it was wrong about some of them.

“I talked with Olympia Development… after we sent out our list, and I checked with our collections department and confirmed they only had a current bill owing on their properties,” said Bill Johnson from the DWSD Public Affairs Group.

As for the MSC, “it appeared they were 90 days in arrears, but on closer examination of our records … it appears the Michigan Science Center is current.” Johnson blamed the confusion on received payments not being posted properly to the correct accounts.

When asked whether similar errors could result in mistaken shutoffs to Detroit residences, Johnson replied, “Possibly, but I don’t know if that’s the case. I don’t know of any accounts that are being shut off without notice.”

Bill Johnson

Bill Johnson

Johnson says DWSD investigated a media report of a woman who says her water was turned off without notice, after not receiving a bill for a year. Johnson says DWSD maintenance crews examined her meter multiple times over the year, so he is confident the department had the correct billing address, because it was matched to the meter.

“She said she never had a bill, and yet she knew she was using water all this time,” Johnson said. “And then when she went to pay the bill, she had a $700 bill, but only had $150 to pay on the bill. So … she couldn’t get her water turned back on because she didn’t have the deposit necessary.”

Johnson’s statement directly contradicts DWSD Deputy Director Darryl Latimer’s claim before U.S. Bankruptcy Judge Steven Rhodes, July 15, that water service can be restored to Detroit residents without a minimum percentage or deposit. (See Bankruptcy judge wants solutions in water crisis).

Johnson says DWSD doesn’t want to cut off the water to anyone.

“If people are having affordability issues and can’t pay, it is incumbent upon them to come into one of our payment centers and let us know that they are having affordability issues…” he told the Michigan Citizen.

Johnson says DWSD will stop any shutoff action if there is a “legitimate” concern. But, they must take action before their water is shut off.

“If your bill is $1000, you can’t come in with $25 and say, ‘Look, put me on a payment plan,’” he says. “You got to come up with a percentage of the bill in order to qualify for a payment plan.”

GRAPH COURTESY JUSTIN WEDES

GRAPH COURTESY JUSTIN WEDES

Detroit Mayor Mike Duggan and the Detroit City Council have taken no action to end the shutoffs or create an alternative plan. Mayor Duggan noted his administration is under emergency management and believes the shutoffs were handled badly, according to media reports. Last week, Emergency Manager Kevyn Orr awarded the mayor and Council with 5 percent pay increases.

Activists have called for a moratorium on the shutoffs and the implementation of the water affordability plan (see: www.fsconline.com/downloads/Papers/2005%2001%20Detroit%20Water.pdf) drafted and submitted to the DWSD in 2005.

Kristen Hamel, a Detroit resident and homeowner, spoke before the court July 15.

Hamel acknowledged a recent news report in her comments that referred to the water shutoffs as “a necessary part of Detroit’s restructuring.”

“The real agenda is to make the water department more attractive for privatization,” Hamel believes. “While the poorest Detroiters have their water cut off for owing $150, JPMorgan Chase, UBS, Loop Financial and Morgan Stanley were paid $537 million in termination fees on interest rate swaps out of $1 billion in bonds issued from 2010-2013.”

The bonds were earmarked to fund DWSD needed repairs. Former Mayor Dave Bing redirected the bond money to satisfy the banks instead of making the repairs.

The shutoffs aren’t a question of people not paying, says Atty. Jerry Goldberg of Moratorium NOW.

“It’s part of the restructuring of Detroit. It deliberately sets the stage for privatization.”

DSWD Board of Water Commissioner Conrad Mallet, Jr. says he would not support a moratorium on water shutoffs.

Conrad Mallet, Jr.

Conrad Mallet, Jr.

Mallet, who is the DMC’s chief administrative officer, and is also on the board of directors of the Lear Corporation and Kelly Services, says he supports the drive to cause customers to pay their bills, but believes the rate system should be redesigned so people are charged for “vital utilities” based on their ability to pay.

He says the current rate structure is an inhibiting factor in the drive to get people to pay their bills and “lessens the ability to get 100 percent of users to pay their fair share.”

The seven-member board will meet with DWSD and consultants in late August or early September to discuss overall rate design, according to Mallet.

“My hope is the commissioners come up with a different structure and the rates are not increased and people’s water is not shut off,” Mallet said in a telephone interview.

Last week, the Detroit Free Press reported Mallet was not paying taxes on his Palmer Woods home. The residence had tax exempt staus because Mallet purchased it from Rev. Jim Holley’s Little Rock Baptist Church.

Acknowledging City Council recently approved a water rate increase of 8.7 percent amid the shutoffs and thousands of people have had their water turned off, Mallet said this:

“I don’t doubt that it’s hard, but, unfortunately, the water is not free.”

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