Detroiters Need an Income-Based Approach to Water Bills The water crisis in Detroit is not over. In fact, residential shut-offs are poised to continue this spring. To save lives, and to begin to satisfy the city's dire water infrastructure needs, Detroit needs to expand the current assistance programs and enact the Water Affordability Plan (WAP) approved by the City Council in 2006. When tens of thousands of people cannot afford utility rates in a region with large income disparities, it is obvious that an income-based approach to water is the only equitable solution.
Let's back up a bit. A few weeks ago, the Detroit Water and Sewerage Department (DWSD) Board of Commissioners voted to increase water and sewer rates for city residents by a combined 12.8 percent, effective July 1 should the City Council seal the deal.
Mayor Mike Duggan and the DWSD developed a 10-point plan offering certain assistance programs in an attempt to help residents pay their water bills. Yet, some 26,000 residential customers still could face water shut-offs this spring, to begin after the department tackles outstanding commercial accounts and the 8,355 households that "illegally" (in other words, desperately) turned their water back on themselves. DWSD will dole out about 800 shut-off notices per day.
Detroiters need affordable water. Water is essential to life and the United Nations has recognized that access to drinking water and sanitation is a basic human right. It's clear that Mayor Mike Duggan's current assistance programs are wildly insufficient; they don't address the systemic problems -- like unemployment and cyclic poverty -- that are a result of decades of misguided policies, and that inhibit residents from being able to pay their water bills. Put simply they haven't, and won't, stop the shut-offs and imminent public health consequences.
Here is why the Water Affordability Plan trumps Detroit's current assistance programs:
Qualification
Only a customer whose water is already shut off or faces a pending shut-off qualifies for the Detroit Residential Water Assistance Program. Similarly, only people already behind on their water bills qualify for the 10/30/50 payment plan program and assistance from the Detroit Water Fund. Whereas these programs act like a Band-Aid, the WAP is preventative -- qualification isn't contingent on a customer being in payment default. Rather, qualification is determined based on the ratio of a household's income and utility bill. Under the WAP, a customer can receive help before reaching default, and avoid shut-offs and massive make-up payments altogether.
Affordability
The existing water assistance program sets payments on a case-by-case basis. This creates a complicated, time-intensive billing process and requires a unique formula for each household. The 10/30/50 Plan requires at least 10 percent upfront on an outstanding balance and then spreads the rest of the balance over 24 months. It does not actually reduce the amount owed. Assistance from the Detroit Water Fund is strictly limited to: Households enrolled in a payment plan, with balances of $300 to $2,000, without any leaks in their homes, with a new meter installed and with household incomes at or below 150 percent of the federal poverty level. The amount of assistance also maxes out at 25 percent of a household's monthly bill.
However, the WAP uses a "fixed rate approach" which calculates, based on the household's income, an affordable utility rate. This means less administrative and billing headaches and more incentive for the customer to conserve water. Not to mention the security of this approach: The WAP caps water utility payment at 2.5 percent of monthly income -- what the federal government views to be the affordability threshold. This would be a huge relief for Detroit residents, as some families currently spend upwards of 20 percent of their monthly income on water and sewerage.
Accessibility
Under the WAP, a customer would have ample time to apply for and access the program before ever reaching default. In this sense, WAP is more accessible than existing assistance programs. Under the current Detroit Residential Water Assistance Program, qualified residents (those facing shut-offs) have only ten days to either pay the default or to apply for and be approved for a payment plan. This tight timeline, noting the mental and physical stress that comes with not having water, might keep residents from accessing Mayor Duggan's assistance, exacerbating the crisis.
Households can apply for assistance from the Detroit Water Fund at any time if they meet all the criteria, but they receive help only if funding is available. The program depends on donations, which isn't sustainable. And what's worse, a household loses access to the 10/30/50 Plan and the Detroit Water Fund assistance if it falls behind on its monthly payments more than three times. These existing programs clearly do not reflect the economic reality of many Detroiters, who are living hand-to-mouth and whose livelihoods can be compromised by even minor illnesses or car troubles.
It's past time to embrace an income-based approach to water bills that is accessible and preventative. With the upcoming shut-offs and the proposed rate hikes, it's obvious that the current assistance programs aren't working for residents or the city. To keep utility payments, and water, flowing, Detroit needs to swiftly and fully enact the original Water Affordability Plan approved by the City Council in 2006.
Let's back up a bit. A few weeks ago, the Detroit Water and Sewerage Department (DWSD) Board of Commissioners voted to increase water and sewer rates for city residents by a combined 12.8 percent, effective July 1 should the City Council seal the deal.
Mayor Mike Duggan and the DWSD developed a 10-point plan offering certain assistance programs in an attempt to help residents pay their water bills. Yet, some 26,000 residential customers still could face water shut-offs this spring, to begin after the department tackles outstanding commercial accounts and the 8,355 households that "illegally" (in other words, desperately) turned their water back on themselves. DWSD will dole out about 800 shut-off notices per day.
Detroiters need affordable water. Water is essential to life and the United Nations has recognized that access to drinking water and sanitation is a basic human right. It's clear that Mayor Mike Duggan's current assistance programs are wildly insufficient; they don't address the systemic problems -- like unemployment and cyclic poverty -- that are a result of decades of misguided policies, and that inhibit residents from being able to pay their water bills. Put simply they haven't, and won't, stop the shut-offs and imminent public health consequences.
Here is why the Water Affordability Plan trumps Detroit's current assistance programs:
Qualification
Only a customer whose water is already shut off or faces a pending shut-off qualifies for the Detroit Residential Water Assistance Program. Similarly, only people already behind on their water bills qualify for the 10/30/50 payment plan program and assistance from the Detroit Water Fund. Whereas these programs act like a Band-Aid, the WAP is preventative -- qualification isn't contingent on a customer being in payment default. Rather, qualification is determined based on the ratio of a household's income and utility bill. Under the WAP, a customer can receive help before reaching default, and avoid shut-offs and massive make-up payments altogether.
Affordability
The existing water assistance program sets payments on a case-by-case basis. This creates a complicated, time-intensive billing process and requires a unique formula for each household. The 10/30/50 Plan requires at least 10 percent upfront on an outstanding balance and then spreads the rest of the balance over 24 months. It does not actually reduce the amount owed. Assistance from the Detroit Water Fund is strictly limited to: Households enrolled in a payment plan, with balances of $300 to $2,000, without any leaks in their homes, with a new meter installed and with household incomes at or below 150 percent of the federal poverty level. The amount of assistance also maxes out at 25 percent of a household's monthly bill.
However, the WAP uses a "fixed rate approach" which calculates, based on the household's income, an affordable utility rate. This means less administrative and billing headaches and more incentive for the customer to conserve water. Not to mention the security of this approach: The WAP caps water utility payment at 2.5 percent of monthly income -- what the federal government views to be the affordability threshold. This would be a huge relief for Detroit residents, as some families currently spend upwards of 20 percent of their monthly income on water and sewerage.
Accessibility
Under the WAP, a customer would have ample time to apply for and access the program before ever reaching default. In this sense, WAP is more accessible than existing assistance programs. Under the current Detroit Residential Water Assistance Program, qualified residents (those facing shut-offs) have only ten days to either pay the default or to apply for and be approved for a payment plan. This tight timeline, noting the mental and physical stress that comes with not having water, might keep residents from accessing Mayor Duggan's assistance, exacerbating the crisis.
Households can apply for assistance from the Detroit Water Fund at any time if they meet all the criteria, but they receive help only if funding is available. The program depends on donations, which isn't sustainable. And what's worse, a household loses access to the 10/30/50 Plan and the Detroit Water Fund assistance if it falls behind on its monthly payments more than three times. These existing programs clearly do not reflect the economic reality of many Detroiters, who are living hand-to-mouth and whose livelihoods can be compromised by even minor illnesses or car troubles.
It's past time to embrace an income-based approach to water bills that is accessible and preventative. With the upcoming shut-offs and the proposed rate hikes, it's obvious that the current assistance programs aren't working for residents or the city. To keep utility payments, and water, flowing, Detroit needs to swiftly and fully enact the original Water Affordability Plan approved by the City Council in 2006.
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