Economy

Flint Ignored A Memo On How To Make Water Cheaper. Now Its Residents Are Paying The Price.

CREDIT: Bryce Covert

FLINT, MICHIGAN — Stephanie and Joseph Morales are upstanding members of the Unitarian Universalist church and the parents of nine young children. But they haven’t paid their water bills for nearly two years.

The Flint residents, whose children range from ages three to 17, stopped drinking their tap water pretty much immediately after the city switched the source from Detroit to the Flint River in April 2014, causing widespread contamination from lead and other chemicals. The taste was off, and there was a day when they drew a bath and all the water came out brown. “We noticed right away,” Joseph said.

That prompted them to start buying and using bottled water to drink and cook with. But it was a costly undertaking — they started shelling out somewhere between $50 and $100 a month to get enough for their family. “We tried making sure that we got it on sale whenever we could,” Stephanie said.

That extra cost came on top of the steep bills they were already paying for the tap water they couldn’t use — somewhere in the $120 to $140 range a month. So they stopped responding to the bills last summer. “I found it ridiculous to pay,” Joseph said. “I’m trying to find the money to buy bottled water… so you know what, I’m not going to pay my water bill. If they want to come and shut it off, okay, we’ll just deal with it.”

“It’s also about paying for poison,” Stephanie added.

Stephanie and Joseph Morales, in the back, with other members of the Universalist Unitarian church

Stephanie and Joseph Morales, in the back, with other members of the Universalist Unitarian church

CREDIT: Bryce Covert

The Morales’s bills are about in line with an analysis from 2014 finding that residents pay $140 a month on average, far higher than other surrounding areas and about eight times higher than the national average.

Those rates were already a burden for many residents, leading many low-income families — Flint’s poverty rate is above 40 percent — to stop paying altogether and prompting lawsuits over shutoff notices. But now that people know the water was unsafe to drink going back potentially as far as spring of 2014, they’re wondering why they should have to keep paying such exorbitant bills for water they can’t even use.

That problem — nonpayment of water bills — will only serve to starve the city of the revenue it could very much use to help cover the enormous cost of ripping out the city’s entire water system, which many believe has been irreparably compromised, and replacing it with new pipes.

Expensive Poison

The city had warning of this burgeoning financial crisis as early as the spring of 2015, when it requested a memo on how to make water rates more affordable from Fisher, Sheehan & Colton, a consulting group that developed a model to calculate the gap between home energy bills and how much a family could actually afford to pay. Had the city followed the advice of that memo, it could at least have avoided the financial pileup, if not the lead contamination crisis.

There are a number of cities across the country that need to be replacing old pipelines, including Flint. But that costs money, and money can be tight. The problem is even worse, though, in places where water bills are impossibly high.

“Cities like Flint become financially constrained, who then don’t make the investments that they should to assure clean water,” said Roger Colton of Fisher, Sheehan & Colton, who wrote the memo to the city about how to make rates affordable. “One of the reasons they don’t have the money is because their customers can’t afford to pay their rates.”

Colton’s analysis found that bills are unaffordable — consuming more than 2 percent of a household’s income, the common threshold that experts use — for most household sizes and even for many income levels in the city. “Water in Flint is indeed unaffordable, pretty universally,” he said.

costofflintwatersmall

CREDIT: Dylan Petrohilos

Unaffordable water bills hurt revenue collection in two ways: first, a customer who can’t afford a $140 bill knows that putting a smaller amount toward it won’t keep him from getting his service shut off anyway, so he doesn’t pay anything and uses that money for other necessities like food or medicine. But that means the city isn’t collecting the smaller amount he might otherwise be able to pay. Then collection costs go up when the city has to chase down a larger number of delinquent households, eating into those same reserves.

Colton’s suggestions fit into three categories: institute a water affordability plan that would cap bills at a percentage of income for qualifying households, get rid of late fees or at least tie them to the actual cost of the bill, and reform the deferred payment plans so that they’re more affordable and customers aren’t getting charged a past due amount.

“If somebody is behind because they can’t afford to pay, it makes no sense whatsoever to respond to that by increasing their bill,” he said.

“In order to get the money to run the system you have to bill those costs to customers,” he added. “But in order to collect those bills, you have to make those bills affordable. If you break the loop, then the whole thing falls apart.” More affordable bills, and therefore more revenue for the city, might not have been enough to cover the upkeep of the pipes and avoid the crisis to begin with, but it could have been a start. It could also have meant that the city didn’t need to think about saving money, the given reason for switching the water source in the first place.

The city did not respond to a request for comment as to why it never acted on the recommendations in his memo. “They said thanks, and I never heard back from them,” he said.

A Human Right

State lawmakers are now pushing ahead with solutions to both the contamination crisis as well as water affordability, which hasn’t been limited to Flint — Detroit has been rocked by waves of shutoffs that have deprived many low-income households of water. A package of 11 bills introduced in the state House in November and December would address a wide range of issues, including ensuring that bills are affordable for low-income residents, instituting shutoff protections for categories of protected people, as well as stricter guidelines for the Department of Environmental Quality and other water authorities for compliance with the Environmental Protection Agency. “Safe, affordable, clean, accessible water should be a human right,” said Rep. Stephanie Chang (D), one of the lawmakers who worked on the package. “That is what the bills aim to do.”

She noted that most of the bills have bipartisan cosponsorship. Now they wait to be scheduled for a committee hearing.

The billing issue has also caught the attention of Michigan leadership. On Monday, state Attorney General Bill Schuette called it an “outrage” that Flint residents are being billed for contaminated water, saying, “If you can’t drink the bad water you shouldn’t pay for it.” He said his office is looking into what it might take to provide financial relief.

The issue has also been rolled into the legal action brought against the city and state in the wake of the crisis. The largest class action lawsuit brought so far alleges that plaintiffs have suffered “irreparable harm” from being threatened with shutoff notices when they didn’t pay bills for “toxic and harmful water,” and in many instances water was in fact disconnected.

“The shutoffs seem to be the line at which we thought it was going way too far,” explained Kathryn Bruner James, an attorney with Goodman & Hurwitz, P.C. who is representing the plaintiffs in the class action lawsuit.

While shutoff notices were halted until this past November due to a lawsuit over a rapid and potentially unconstitutional rate increase the city enacted, they began going back out after the winter holidays. “It’s my understanding that at least 1,500 or 1,800 shutoff notices went out last week, if not more,” James said. The attorneys will also consider potential harm caused by the high water bills and seek compensation and reimbursement for all of these issues.

And there’s another financial challenge that’s come to light as the attorneys speak with the more than 1,300 people who have called about the lawsuit: home damage wrought by the corrosive water. Families have had to rip out and replace pipelines. Meanwhile, property values are likely declining given the intense national scrutiny on the disaster.

“The property damage has been fairly significant,” James said. “Some people, through lead leaching into their pipes and other corrosive qualities of the Flint water, have actually permanently damaged their plumbing in their homes, had to get new hot water tanks, and all kinds of other problems.”

‘This Is Breaking Us’

Melissa Mays, who is the lead plaintiff in the class action lawsuit, hasn’t just experienced what she says is a number of health problems related to drinking Flint tap water: seizures, autoimmune disorders, kidney stones, even changing hair color. She’s also experienced the financial aspects of the crisis. She says she and her husband have had to buy three hot water heaters over the last 14 months, spending $500 each time — one because it was filled with sediment from the water, another that caught fire because of all the chemicals.

Meanwhile, she’s still paying water bills that come in at $200 to $300 a month — sometimes reaching as high as $500 — even though she stopped drinking the water in September of 2014 and has more recently stopped even letting her kids shower in it. “Our bill is $200 a month minimum for water we’re not using,” she said. But, she adds, “You have to [pay] because if not they’ll shut off your water, cap your sewer, condemn your home, and take it and take your kids.” The state child protective services includes a lack of running water as a sign of physical neglect, although it says it wouldn’t remove children from a home just for that reason.

Mays is also spending a huge amount of money on bottled water — $200 to $300 a month — given that she, her husband, her three sons, and her three pets use it to drink, cook, and bathe. The National Guard has been helping to distribute free water, but the family hadn’t gotten a drop-off until Friday. Mays doesn’t want to take any from needy families who go to fire stations to collect it. “I’m not going to take it from somebody who can’t afford to buy it, so I’ll just suck it up,” she said.

Still, the financial strain has been immense. “All the damage, plus the medical care, my husband has two jobs, I’m now on sick leave from mine,” she said. “This is breaking us.”

Stephanie and Joseph Morales are also still paying for bottled water, particularly as they say many water stations check IDs and only give out a 24-pack of water bottles per household, regardless of the size. “If you’re cooking and cleaning and drinking with a 24-pack with 11 people…it’s nearly impossible,” Stephanie said.

As of last week they hadn’t received another shutoff notice since they resumed. But they won’t pay their bills, and they also feel they should be reimbursed for the bills they did pay while contaminated water was flowing through their pipes.

“They knew this was poison,” Stephanie said. “Anywhere else, a grocery store, a restaurant, you buy knowingly poisoned food, you can sue them you can get your money back, and you can get a refund. You can’t do that with the water.”