Flint Threatens Shutoffs, Liens In Effort to Ramp Up Water Payment Collections
Flint leaders are doing everything they can to keep the city’s water fund out of the red.
In an effort to keep the fund solvent, city leaders have voted to extend the water trial period by 60 days and impose water liens against those who haven’t paid their bills, MLive reported. The city will also use funds reallocated through the Great Lakes Water Authority’s Residential Assistance Program.
” … We have to demonstrate that we are managing the water fund properly, which means bringing in the cash to support the water fund,” said Flint’s Chief Financial Officer Hughey Newsome. “At the same time, we also have to be aware there are a number of households that have an income challenge, we have to balance that out.”
While the water fund is projected to have a $4 million surplus by the end of the 2018 fiscal year, Newsome warned the fund could fall into the red over the next five years if collection efforts aren’t where they need to be.
Last year, Flint’s City Council agreed to end a policy imposing tax liens on homes with past due water bills, and have since compromised on a new trial program that would reduce the threshold for households behind on payments. Before, a resident’s water would be shut off if they failed to pay their bills for several months. Service would only be cut back on if they paid 50 percent of their outstanding balance, in addition to their current water bill and fees to have the water turned off and on, according to MLive.
Under the trial payment plan, residents would only be required to pay 10 percent of their overdue balance, plus their current water bill and the $75 fee to turn on or off their water. The new program took effect on March 13 and has already recovered roughly $348,450 of the $3 million owed to the city.
“It’s hard to say whether or not the trial policy itself is being effective,” Newsome said. ” … Based solely on the data we have collected so far, I am not pleased with the recovery rate. It’s been a slight uptick in the recovery rate and collection, but it’s tough to isolate why the uptick has occurred.”
Though the trial period has been semi-effective in helping in sustaining the water fund, the city has continued its water shutoffs. According to MLive, the city went from cutting off 30 water service lines a week to about 300 a week. These are usually residents who’ve been delinquent on their water bills for over seven months.
In addition to the shutoffs, the city will also place water liens on residents’ 2018 tax roll rather than their homes like before.
“It’s not the most popular collection mechanism,” Newsome said. “With that being said, we only have the right to do it with inactive accounts … If we do this and we aggressively shut off and get the relief programs in place, we can determine if this is going to save the water fund. “