Detroit offers aid, payment plans on delinquent water bills

CHICAGO Thu Aug 7, 2014 3:40pm EDT

Related Topics

CHICAGO (Reuters) - Detroit offered financial aid, extended payment plans and charity solutions for residents struggling to pay water bills as the bankrupt city wrestles with $90 million in delinquent payments.

The city, which has a high level of poverty and unemployment, drew international criticism in June when it turned off water to 7,210 accounts because of unpaid bills.

Mayor Mike Duggan earlier this week acknowledged the utilities problem had been mishandled and issued a moratorium on shutoffs until Aug. 25 to give account holders opportunities to pay overdue bills.

He announced on Thursday that the city is extending phone and service center hours for payments, and is holding an all-day fair in downtown Detroit on Aug. 23 that will include information from social service agencies.

A new payment plan will allow residents to pay 10 percent of their bill upfront and then make monthly payments for two years to catch up on the past-due amount. The city has also partnered with the United Way charity to administer a special fund that solicits donations online, via the website detroitwaterfund.org, which will help the neediest residents pay their bills.

Duggan said getting households back in good standing with the city is critical to helping the city's overall push to get on solid financial ground as it moves into the trial period of its Chapter 9 bankruptcy, the largest-ever for a U.S. municipality.

He said the average Detroit household was paying 80 percent more for water due to the delinquent accounts. The average water bill for a Detroit household is $58 a month, he said.

He deflected some criticism as unrealistic: "When people say water should be free, I don't know how to filter water from the river and pip it to someone's house at no cost. Right now, other Detroiters are paying for it."

Duggan gained control of Detroit's Water and Sewerage Department in late July after Judge Steven Rhodes of the federal bankruptcy court noted the unwanted international attention. The mayor now has the power to manage the utility and make appointments to its board.

The utility is one of the largest in the United States and provides water to several surrounding municipalities, as well as Detroit, where the majority of the 90,000 remaining delinquent accounts reside.

Reverend Wendell Anthony, president of the Detroit branch of the National Association for the Advancement of Colored People (NAACP), which has been critical of the city's handling of the water crisis, said the plan reflects a "step in the right direction for the city and the community."

"The best water in the world certainly is worth paying for. However, we do think water should be affordable and consistent in other communities," he said.

(Editing by Fiona Ortiz and Lisa Shumaker)

FILED UNDER: