Judge rules delinquents must pay water bills in bankrupt Detroit

A federal judge on Monday told thousands of Detroit residents that they must pay their delinquent bills or face having their water shut off because the bankrupt city needs the money.

After two days of hearings, U.S. Bankruptcy Judge Steven Rhodes rejected a request for a new moratorium on enforcing the shut-off orders.

Advocates for those who could lose their water said they intend to appeal.

Rhodes is the federal judge who has been dealing with the long-running bankruptcy proceedings involving the city, which is seeking help under Chapter 9 of the bankruptcy law to reorganize its finances.

“Chapter 9 strictly limits the courts’ power in a bankruptcy case,” Rhodes said as he read a ruling Monday morning, according to local media reports.

The judge acknowledged that the lack of water would create problems for residents, but added that he did not have authority to force the city to keep the water flowing.

“The last thing [Detroit] needs is this hit to its revenues,” the judge also said.

In July 2013, Detroit sought bankruptcy protection in what became the largest such municipal proceeding in U.S. history.

The water issue has become the symbol of the dire service cuts the city was prepared to impose on its residents to get its head back above water.

The city estimated that at the peak of the problem, 150,000 customers were delinquent in their water payments.

Among the techniques it employed was to extended customer service hours and establishing a plan to get charitable institutions to pay some of the bills.

The city also allowed some customers to pay only 10%, down from 30% in some cases, of the balances to help clear its financial books.

Currently 25,000 customers are enrolled in a water payment plan, up from 17,000 earlier. The city announced recently that it had shut off water to about 24,000 customers this year and was adding about 400 a day.

The judge’s ruling leaves thousands of people at risk of losing their water.

“No one ever said the water had to be free,” Alice Jennings, a lawyer representing the plaintiffs who sought the most recent moratorium, told reporters after Rhodes’ ruling.

She said she was disappointed and would seek an appeal. “Our position is the water had to be affordable. We’re still looking for affordable water.”

Rhodes also noted that Detroit and Wayne, Oakland and Macomb counties are in the process of approving a new Great Lakes Water Authority under which Detroit would maintain ownership of the region’s infrastructure but would lease the pipes to the suburbs for $50 million a year.

The move is designed to bring in cash for repairs to the aging systems.

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