Legal experts: Detroit can reduce water rates for needy

The City of Detroit's opposition to cutting water rates for poor people is based on a misunderstanding of state law and threatens access to affordable water, a coalition of lawyers and activists said today.

Not only is an income-based rate structure legal, they say, it would generate more revenue for the Detroit water department and address public health concerns raised by mass water shutoffs in Detroit.

“It is important that the city and those responsible for providing water to the people of this city are not allowed to hide behind a falsehood, behind an analysis which is not grounded in law and which is not true," said Mark Fancher of the National Conference of Black Lawyers.

The National Conference of Black Lawyers today announced its position on the legality of a water affordability plan at a news conference at the ACLU of Michigan offices on Woodward Avenue. Peter Hammer, director of Wayne State University's Damon J. Keith Center for Civil Rights, and lawyers from the National Lawyers Guild Detroit/Michigan Chapter and Detroiters Resisting Emergency Management also voiced support for an income-based water rate plan.

They said a water affordability plan would be consistent with the Detroit Water and Sewerage Department's past practice of adjusting rates for various other reasons, such as declining revenues and the need to pay for infrastructure improvements. Studies have suggested that income-based water rate plans set rates for the needy at 3% of their household income.

Advocates of an income-based plan have compared it with an existing discount available to low-income Detroit seniors on their solid waste disposal fee.

"The water affordability plan is not only legal, it is the only right thing to do," said Julie Hurwitz, a Detroit attorney who spoke on behalf of the National Lawyers Guild's local chapter. "It is in the public interest to ensure that not only affordable water but safe water be provided to our community.”

But the Detroit law department and the water department have taken a different posture. Officials have said an income-based plan would be susceptible to a legal challenge based on a 1998 Michigan Supreme Court decision against a Lansing storm water charge. In that case, the court decided the fee was a tax and therefore subject to a vote under the Headlee Amendment to the state constitution.

“The state Supreme Court as well as the Headlee Amendment dictates law that basically says rates have to be based on the cost of service, they cannot be based on the person’s ability to pay," water department director Gary Brown said.

Brown said an income-based affordability plan could cost the city millions if the plan fails in court.

The push for an income-based water rate structure comes ahead of a new report expected in the coming weeks by the city's Blue Ribbon Panel on Affordability, which was tasked last year by the City Council with studying the issue. Brown said he expects the report to recommend ways to assist  residents living in poverty.

Water rights activists and others have called on city leaders to implement a water affordability plan that uses people's income as a basis for their water rate in response to a more aggressive water shutoff effort in recent years. The city cracked down on delinquent water customers in 2014, cutting service to tens of thousands of residents. Uncollected water bills continued to add up last year, when the debt accumulated to about $50 million.

Detroit could face a water crisis similar to Flint, which is dealing with lead-contaminated water, if rates are not made to be more affordable so shutoffs can be avoided, said Monica Lewis-Patrick, of We the People of Detroit, a community group to improve residents' quality of life. She called on Mayor Mike Duggan to implement a water affordability plan.

“If he doesn’t want to go the way of the governor, he would implement a water affordability plan,” Lewis-Patrick said.

The Detroit Water and Sewerage Department now operates under the new regional Great Lakes Water Authority. The authority, a byproduct of Detroit's bankruptcy, will pay Detroit $50 million annually in lease payments. It also gives the suburbs, where 75% of the customers now live, more say in the management of the department they've criticized for years.

The deal that created the authority includes $4.5 million annually to help poor residents across the region pay their water bills.

Contact Joe Guillen: 313-222-6678 or jguillen@freepress.com. Follow him on Twitter @joeguillen.