History of the 2005 Program
In 2005, Roger Colton, an expert consultant to municipalities on low-income affordability programs for utilities, presented a 44 page Water Affordability Program (WAP) for the Detroit Water and Sewerage Department (DWSD). The WAP proposal was presented to the DWSD and Detroit City Council on behalf of Michigan Poverty Law Program, Michigan Legal Services and their clients, including Michigan Welfare Rights Organization. Mr. Colton spent several weeks reviewing DWSD operations; and speaking with DWSD and City of Detroit officials, local attorneys, residents of the city and community groups to establish a program that addressed the consumer protection and business needs of DWSD customers and stakeholders.
Unaffordable water/sewer bills pose substantial problems to low-income Detroit residents. Not only do unaffordable bills impede the ability of low-income customers to make their water/sewer payments, but such bills also impose substantial physical, emotional and social hardships even on low-income customers that make their payments.
Beyond the impacts on low-income customers, water/sewer bills that are unaffordable to low-income Detroit residents pose a business problem for the Detroit Water and Sewerage Department (DWSD). Increased financial costs to the DWSD result from increased credit and collection expenses arising from the need to “chase” bill payments; increased working capital expenses associated with higher arrears, and increased bad debt/uncollectible expenses associated with long-term nonpayment. This proposal contains three sets of recommendations to address these social and business problems associated with the unaffordability of water/sewer bills. The proposal recommends:
- Adoption of a rate affordability program, consisting of a rate discount component, an arrearage
management component and a water conservation component.
- Adoption of designated fundamental consumer protections involving late fees, service disconnections, and payment plans; and
- Adoption of designated collections initiatives directed toward customers having an ability-to-pay.
The combined effect of these three sets of recommendations will not only be to address the unaffordability problems facing low-income Detroit water/sewer customers, but also to rationalize the overall collections efforts undertaken by DWSD.
Each set of recommendations should be adopted.
For more information
• Read the Los Angeles Times article, “Thousands go without water as Detroit cuts service for nonpayment.” June 28, 2014 (www.latimes.com/nation/la-na-detroit-water-20140629-story.html). In the story, Roger Colton argues that cities won’t get the money they want by simply shutting off services. Instead, he says, utilities should require residents to pay a percentage of their income to the water department for service.
• Read the full 2005 Water Affordability Program proposal to DWSD at