Bankruptcy judge is asked to stop Detroit water shutoffs; city says water can't be free



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Demeeko Williams, left, of the Detroit Water Brigade talks into a megaphone during a rally outside federal courthouse in Detroit, Monday, Sept. 22, 2014. A hearing was held about a lawsuit that seeks to block the Detroit from shutting off water to customers for unpaid bills. Judge Steven Rhodes set aside Detroit’s bankruptcy trial to hear evidence in a controversy that has been boiling all summer. A coalition representing low-income residents is asking him to suspend water shutoffs and restore service to people who have lost it. (AP Photo/Carlos Osorio)


DETROIT — Detroit's water department defended its shutoff policy Monday and warned that free service to people with unpaid bills could be "very devastating" to the bottom line.

Judge Steven Rhodes set aside Detroit's bankruptcy trial to hear evidence in a controversy that has been boiling all summer. A coalition representing low-income residents is asking him to suspend water shutoffs and restore service to people who have lost it.

The water department would be violating Michigan law and breaking agreements with bondholders if forced to supply water and ignore overdue bills, attorney Sonal Mithani said.

The "humanitarian concerns are very compelling" but fairness is critical, too, Mithani said, noting that 60 percent of Detroit residents are paying for water on time.

Opponents essentially are arguing that "every resident has the inherent right to free water," she said.

The water department stepped up shutoffs in March, and about 15,000 customers had service cut from April to June. Criticism and protests followed, even appeals to the United Nations.

Detroit stopped shutoffs for about a month this summer but they resumed in August after Mayor Mike Duggan encouraged people to put down 10 percent and sign up for a payment plan.

"It could potentially be very devastating" to the water department's budget if the city is ordered to stop shutoffs, director Sue McCormick told the judge.

Carol Ann Bogden said the new policy hasn't helped her. She said she bathes in the sink with water purchased at a store since being cut off in July. She owes $1,120 but lost her identification and has been unable to get into a payment plan.

"I cried for a while," Bogden said of her woes.

As of July 31, at least $86 million was owed on accounts overdue for at least 60 days.

An economist, Roger Colton of Belmont, Massachusetts, testified for critics of Detroit's shutoff policy, saying a consumer's income should be a factor in how the city regularly collects water bills.

He predicted that Detroit's payment options will be "unsuccessful and ineffective" in the long run as poor people miss more payments down the road.

John C. Smith said he and his mother could lose water as soon as Tuesday after being cut off for a few months last winter. He owes about $1,100.

His spending habits were questioned by attorney Thomas O'Brien, who asked about his cellphone bill. Smith said his sister pays it.

The hearing will end Tuesday after testimony from water department officials and closing arguments.


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