By Kyle Davidson, Michigan Advance
A wide swath of community advocates, utility operators and environmental groups showed up in support of a six-bill water affordability package, testifying on Tuesday before the Michigan Senate Committee on Housing and Human Services.
With the cost of water adjusted for inflation nearly doubling since 1980, lawmakers have introduced Senate Bills 549–554 in a bid to create a statewide water affordability program and prevent shutoffs.
The House Natural Resources, Environment, Tourism and Outdoor Recreation Committee took testimony on a similar package at its last meeting on Oct. 26.
State Sen. Stephanie Chang (D-Detroit), said establishing the affordability program would help give customers certainty on the monthly cost of their water bills, protect the most vulnerable from shut offs and provide certainty to water providers having difficulty collecting payments, which will allow them to plan for future infrastructure needs.
The program would cap water bills at 2% of the average household income in a water provider’s service for households at up to 135% of the federal poverty level. For households in between 136% and 200% of the federal poverty level, bills would be capped at 3% of the average household income in the area.
The bill also allows for flexibility for companies that already have a water affordability program, or would like to start their own, Chang said.
People enrolling in the program would also be eligible for up to $1,500 in forgiveness of overdue water bills in the first year, $1,500 in their second year and more if there is an extreme need, Chang said. Enrolled households would also be eligible for up to $2,500 in plumbing repairs.
Additionally, the program includes a recertification process, so a person whose income increases above the program’s thresholds would no longer be part of the program, Chang said.
The program would be funded by a $2 fee on each retail water meter, which will be included on a customer’s monthly water bill, with the potential to increase that fee to $3 if needed. Additional contributions to the fund would also be allowed, said Sen. Rosemary Bayer (D-Keego Harbor), who sponsored the bill managing the program’s funding.
There would be no fee for individuals using unmetered or community wells.
In addition to creating a low-income water affordability program, the package includes protections against water shutoffs for customers who have not paid their water bills, including requirements that customers are contacted at least four times through a variety of methods prior to a shutoff, and are provided with information on resources to help, including the water affordability program, and contact information on how to enroll in that program, Chang said.
The package also includes policies to allow tenants to request their water or sewer bills to be transferred to their name.
This would not only ensure tenants see and receive their water bill, but would protect them, said Sen. Mary Cavanagh (D-Redford Twp.), another one of the sponsors who worked on the package.
Another set of bills in the package would reduce the penalties for someone reconnecting their water after shut off from a five-year felony to a civil infraction.
While the bill received praise from many of the stakeholders at the meeting, some offered additional recommendations on how the bills could better serve individuals who are the most vulnerable to a shut off.
Monica Lewis-Patrick, president and CEO of We the People of Detroit, said she would like to see the program decoupled from its funding to ensure it can continue to operate even if household water assistance funding is drained.
Chang defended the fund, saying that forcing the program to continue without funding would result in water providers raising rates on customers in order to fund the program.
“Our only concern is if the funding goes away, then we know that protections go away. And we’re deeply concerned about losing those necessary protections for many residents across the state of Michigan,” Lewis-Patrick said.
Kristy Meyer, campaign director for the Water Equals Life Coalition, also raised concerns about the customers who are at the low-ends of each of the program’s eligibility tiers, who still may not be able to pay their water bills.
Additionally, should the program not have enough funding to provide a discounted water bill, Meyer asked for the bills to include protections against water shutoffs for people enrolled or with an active application in the program, as well as protections from having unpaid bills added to their certified to their property taxes if they continue to make a good faith effort to pay their bill, and are paying a regular affordable amount toward their bill.
Gary Brown, director of the Detroit Water and Sewerage Department (DWSD) and member of the Great Lakes Water Authority board of directors, offered his support of the bill from a business perspective.
Most municipal water systems are funded solely by their own revenue, unlike other departments which receive revenue from property taxes. As a result these providers must determine the revenue requirements to upgrade infrastructure, with state law requiring all utilities to remove lead service lines, Brown said.
“If we collect from every customer, we can provide optimal service. But the reality is we face budget challenges due to uncollected revenue, and there is a direct impact on public health,” Brown said.
For customers who do not pay their bill, water debts can be placed as liens on a person’s property, sending it to foreclosure. Providers can also file lawsuits against the customer, or shut off their water. While these are strong incentives to pay for customers who are able, they are ineffective for collecting revenue from customers who do not have the ability to pay their entire bill, Brown said.
As a result, water utilities raise their rates to make up for the loss, exacerbating the issue for low-income customers, Brown said.
“Based on our experience with the DWSD lifeline plan. If you give the low income customer a bill they can afford, they will pay. They will contribute to the cost of operational and infrastructure needs,” Brown said, referencing DWSD’s own income-based water affordability plan.
However, no utility can cover the cost of an affordability plan using its own local customer base, Brown said.
“We must all contribute to ensuring the public health and safety of water and wastewater systems statewide,” Brown said.
“We do not expect the electric and gas utilities to forego upgrades to their system due to uncollected revenue. Those utilities have received subsidies for decades.… This legislation puts Michigan on the map as the first state in the nation to understand access to water is as vital as gas and electrical services, and should be deemed more vital as a public health requirement,” Brown said.
While a number of speakers could not provide testimony due to time constraints, Sen. Jeff Irwin (D-Ann Arbor), who chairs the committee, said he hoped that the committee would be able to meet again in the coming week to do more work on the legislation, encouraging interested parties to submit written testimony on the bills.
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