A new Senate package on water affordability aims to establish a $2 up-charge to all customers’ water bills in order to support households that are at risk of water shutoffs. There is no long term sustainable funding source for water bills at the federal level, so advocates said that state legislation like this is particularly important.
To learn more about this bill package and how it might impact water affordability in Michigan, Stateside spoke with Senator Stephanie Chang, one of the sponsors of this package, Jim Nash, Oakland County Water Resources Commissioner, and Gary Brown, director of the Detroit Water and Sewerage Department.
What led up to the development of this bill package?
Water affordability efforts have been on these elected and appointed officials’ minds for some time now.
“When I took office in 2015, we knew that water affordability and water shutoffs were a big issue in Detroit,” Chang said. “During the COVID pandemic, we quickly learned just how much water affordability is truly a statewide issue. Because in 2020, [the Michigan Department of Health & Human Services] then was able to collect data across the state, and we found out that over 317,000 Michiganders were behind on their water bills.”
Chang said that through the course of eight or nine months in 2023, she met with other professionals from environmental groups and water providers alike to develop legislation to address these challenges. Brown also said that he has been working to create solutions to water affordability since 2014 after massive water shut offs in Detroit.
What are the main components of this package?
Chang said there are three main components to this package, with the first being the affordability program. The proposed affordability program would mean that people who are at 200% of the federal poverty level or below would not have a water bill that is more than 3% of their total household income.
Chang said the package includes arrearage forgiveness of $1,500 in the first year, with the option for more loan forgiveness in future years. She also said that plumbing repairs would be included in this package.
“That's something that we heard loud and clear from both advocates and providers of how important it was that we actually fix those leaky pipes to make sure that the water that people are paying for actually ends up coming out of their tap,” Chang said.
The second main component of this package is the funding mechanism for this affordability program.
“What we know is that, Michiganders on the whole actually support the concept of ‘let's all pay a very small $2 per meter monthly fee,’” Chang said.
This model is similar to what is already done with energy bills, in which customers collectively pay a small charge on their monthly bill to support the needs of other customers.
The final objective in this package is to protect critical care customers from water shutoffs. Chang said critical care customers are customers who need water for things like a health condition or a medical device.
“For everyone else, we would require several notices to make sure that folks are getting notified prior to shut off. All with the goal of ‘let's actually get you all the information you need in order to get into the affordability program, with the hope that we won't need to shut off your water.’”
What is the difference between a water residential assistance program (WRAP) and what’s being proposed now?
Brown said that, while having a water residential assistance program is “better than nothing,” a WRAP is “not robust enough” to adequately address existing challenges to paying water bills in Detroit. For Brown, the main issue with a WRAP is that it “does not take into account the customer’s ability to pay.”
Wayne County currently has a program called the Lifeline Plan, which pays off water-related debts and gives customers a flat rate as low as $18 for water, sewage, and draining services once they qualify for the program. The problem, Brown said, is that this program has limited funding.
“We have 28,000 residential homes in our program, but we don't have long term sustainable funding. It can't be done through rates,” Brown said. “You can't increase rates to the point that you're going to make water even more unaffordable for more people. So you have to have outside dollars to do that, and that's what this legislation does.”
How would this package be applied?
Brown said that the “beauty of this legislation” is that “it allows communities and water utilities to craft a program within the parameters of the legislation that fits their needs.” Having a dynamic model such as this prevents rates from being taken out of the context of the places they are applied to.
“You don't want to place people that can't pay a water bill on the tax rolls. That's going to subject their homes to foreclosure, which will exasperate the foreclosure rates in cities like Detroit and all around the state. Those are the tools that utilities are using now.”
Brown said that this $2 charge on monthly bills is a “more humane way” to address water bills.
Nash spoke to how this package would be applied in smaller communities. He said that this kind of legislation particularly impacts small systems, as ratepayers often have to pay a larger proportion of any project that their city takes up.
“We're trying to make sure that everything we're doing is properly funded and everyone is served, and this especially affects small communities,” Nash said. “If we're not doing this for the folks that have the hardest time paying, everybody ends up paying more in the long run.”
What kind of traction is this package getting in the legislature?
Chang said she and her colleagues have been engaging in conversation with legislators from both parties about how this package could work in their district, and is hopeful about this package receiving bipartisan support.
“One of the things that I'm very optimistic about is that [with] both Democrats and Republicans, there are many, many colleagues who understand that this is an issue in their district. There actually are a number of colleagues on the Republican side who are very interested in this issue.”
To learn more about the state of water affordability in Michigan, listen to the Stateside podcast.
GUESTS ON THIS EPISODE:
- Gary Brown, director of the Detroit Water and Sewerage Department
- Stephanie Chang, state senator for District 3
- Jim Nash, Oakland County Water Resources commissioner
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