Sarah RahalThe Detroit News
Detroit — One year after Detroit launched an income-based water affordability plan to prevent shutoffs, participation has been higher than expected and some state lawmakers are proposing similar help statewide to help low-income residents.
Approximately 27,000 households are enrolled in Detroit's Lifeline Plan, which charges qualifying households approximately $18 a month for their water bills. Detroit officials expect participation to grow to 40,000 households by the end of 2024, though some worry about future funding for the program.
"We have approximately 1,400 people every month that have been applying and being accepted into Lifeline for the last six months," said Matthew Phillips, chief of staff and customer service officer for the Detroit Water and Sewerage Department. "We're also covering the gap payment, the difference between the actual bill, which averages $80, and the $18-a-month payment."
Detroit Water and Sewerage Department leaders introduced what they call the Lifeline Plan in August 2022 as a path to help reduce bills for the city's poorest residents. It came two and a half years into a moratorium during COVID-19 on water shutoffs, despite the city facing millions of dollars in water debt.
If residents qualify for SNAP or food assistance, they also qualify for the Lifeline Plan.
Municipalities across the state have struggled with debt from unpaid bills since the start of the pandemic. The largest number of delinquencies include Battle Creek, Flint, Lansing, Warren, Rochester Hills and Saginaw, but Detroit has more customers behind on payments than all of those cities combined.
Last December, more than 60,000 Detroit households had delinquent water debt totaling more than $85 million; not everyone has to repay it. It's now around $50 million.
At the time, Mayor Mike Duggan estimated that 40%, or 100,000 households, in the city would qualify for a monthly water bill of $18. Those who don't already receive assistance but are considered low-income have a monthly bill cap of $43. Moderate-income households are capped at $56 a month.
Since Lifeline launched, nearly 27,000 households have enrolled and 83% qualify for the $18 monthly bill. Another 3,900 households are protected from water shutoffs in the payment plan 10/30/50. Applications from 1,138 households are currently being vetted through Wayne Metropolitan Community Action Agency, said DWSD spokesman Bryan Peckinpaugh.
As of Dec. 19, the water department had used $40 million in federal funds to erase past-due balances on enrolled household accounts, which is approximately 79,240 Detroit residents based on an average household of three people to start them at a zero balance.
"Between paying off the past due arrearages and paying off the gap payment, we're at $40 million in the last 18 months, and that really does exceed the amount of funding that is available," Phillips said. "My day-to-day worry is how are we going to fund this in the future, especially as the number of enrollees is expected to grow."
But Phillips estimates participation in the Lifeline program will grow. He predicts 40,000 households will be enrolled by December 2024, twice that of the initial goal to have 20,000 people over two years. The city has knocked on 50,000 doors to provide residents with enrollment information.
Residential shut-offs
Before the pandemic, the Detroit Water and Sewerage Department interrupted services for nonpayment to between 17,000 and 23,000 households annually. During the COVID-19 moratorium, the departments didn't interrupt residential water services between March 6, 2020, and August 2023.
Detroit resumed water shutoffs this past summer, and DWSD temporarily shut off water to fewer than 1,000 houses with large balances "and likely medium- to high-income earners based on census data," DWSD's Peckinpaugh said.
Households restored services, most within 24 hours, after paying their balance or entering into a payment plan. Households that are higher earners are not eligible for the Lifeline Plan.
The intervention is working, Peckinpaugh said. The city has 220,000 residential accounts and DWSD's water bill collection rate was 92% before the pandemic. Since launching Lifeline, the department's residential collection rate from bills has increased from 77% last year to 84% this year. The city's commercial and industrial accounts are collecting at a rate of 94%.
Service interruption is the only tool DWSD uses to collect unpaid balances for residential accounts. The department has not used property tax roll transfers since 2013. DWSD uses other tools to collect with nonresidential accounts, including a collection agency, property tax roll transfers and civil lawsuits.
"We were the last major city in America to resume residential service interruptions because we put our energy into creating Detroit’s new water affordability program and enrolling eligible households," Peckinpaugh said.
The DWSD Lifeline Plan works with community partner Wayne Metro, which utilizes federal funding through the Low Income Household Water Assistance Program and the Great Lakes Water Authority Water Residential Assistance Program funds allocated for Detroit.
Statewide legislation
A group of state senators, meanwhile, has introduced a series of bills known as the 2023 Water Affordability Package that would create a program similar to Detroit's Lifeline Plan.
It would create a statewide water affordability program, funding mechanism and shut-off protections similar to the Lifeline plan.All have been referred to the House Committee on Housing and Human Services.
Despite being surrounded by one-fifth of the world’s freshwater, residential water rates have become unaffordable for many Michigan families, said state Sen. Stephanie Chang, D-Detroit, one of the legislation's co-sponsors. Since 1980, average water costs adjusted for inflation have increased by 188%. Families in urban areas and less densely populated communities have seen rates rise increase by up to 320%, she said.
According to Department of Health and Human Services data, more than 317,000 Michigan households, or 800,000 residents, were behind on their water bills during the pandemic.
In 2020, the Michigan Legislature included $25 million in CARES Act funding in a supplemental appropriation for a short-term water assistance initiative to help erase past-due balances on customer water bills. There are roughly 1,400 community water systems in Michigan, and only 144 have applied for funding, wrote Cyndi Roper, a policy advocate for the Natural Resources Defense Council.
Of the cities that applied for water assistance, those with the most households in arrears for water debt include Battle Creek (11,000), Flint (14,300), Lansing, (27,000), Warren (11,700), Rochester Hills (9,200), Saginaw (12,800) and Detroit (114,000).
Creating a statewide program similar to Detroit's Lifeline plan has been met with criticism. At least three Macomb County communities have passed resolutions against the proposed legislation. They worry the affordability program will raise rates for all users and say another program already exists to help those in need through the Great Lakes Water Authority.
“I don’t think we need to take more money out of our residents’ pockets to pay for other people’s water bill ― we are doing enough,” Clinton Township Supervisor Bob Cannon said.
Chang said she and officials spent nine months in workgroup meetings before introducing the bills in late October. They've been incorporating additional feedback and meeting with stakeholders across the state with the hope of getting the legislation passed in 2024.
The Great Lakes Water Authority passed a resolution in support of the plan, calling for a statewide income-based plan to limit the cost of residential water and sewer to 3% of a household's income and arrange payment assistance.
Lawmakers also received written testimony from the Natural Resources Defense Council, the American Water Works Association and Michigan Community Action in support of the bills.
"It is very important to highlight that water affordability is not just a problem in Detroit," Chang said. "It is a problem in every corner of this state, which is why we need to pass legislation at the state level."
srahal@detroitnews.com
