Since 1835, Detroit has established one of the most successful public water and sewerage systems in the

nation, maintaining an excellent track record of supplying uncontaminated water to residents and to over 120
communities wholesale. However, the DWSD has been under the control of a either federal judge or an emergency
manager since 1977. Throughout the reigns of these judges, the hiring of private contractors to tend to the
systems infrastructure and fnancial decisions has continued to tax the system physically and fnancially.
On the same day that the DWSD announced they would ramp up their residential water shutof program to 3000
customers per day, Kevyn Orr, Detroits non-elected overseerer appointed by Gov. Rick Snyder, issued a request for
information from potential private operators. Meanwhile, Orr is using the Chapter 9 fling to shroud the process in
secrecy.
Today, DWSD is spending about $428 million a year to pay of its existing debt. About 45 percent of the
departments annual budget is spent on debt service. Furthermore, water rates are already padded to compensate
for system water loss, including the unprecedented amount of water fowing in abandoned homes. According
to DWSD, high-interest loans accounts for much of the water departments debt. The answer to DWSDs debt is
cutting services to the most vulnerable--low-income families, the elderly and disabled.
Four banks, JP Morgan Chase, UBS, Loop Financial and Morgan Stanley, got $537 million to pay of interest rate
swaps (swindles) out of the $1 billion in DWSD bonds that was supposed to go for infrastructure repair. The
termination fees were based on the declaring of a fnancial emergency in Detroit, despite the departments fscal
autonomy. The average amount owed was $540 per household, as of April 30, 2014. So, the total amount overdue
by households was only about $45 million. So why the mass-shutofs? The DWSD is enacting a policy of robbing
Peter to pay Paul. This may be a way for the DWSD to clear the books of its bad customer debt to make the
department more attractive to private investors. But privatizing DWSD will only lead to higher rates for consumers,
aggravating the problems that were seeing today.
When 45% of the city struggles to pay their water bills, it becomes clear that this is not just a problem with
delinquent payment, but a broader, systemic issue resulting from decades of policies that put profts before
people.
Three United Nations experts have weighed in on the water shutofs in Detroit. They have called the aggressive
water shut-of campaign an afront to human rights. By denying water service to thousands who cannot aford
water, Detroit is violating the human right to water for many of its residents.
DWSDs shutof policies are destabilizing neighborhoods that have been decimated by the foreclosure crisis and
long-term disinvestment. It is possible that this is an arm of gentrifcation in Detroit. DWSD has hired a contractor,
Homrich Demolition Company to conduct shutofs. While DWSD has repeatedly claimed that they do not put
residential shutofs before commercial shutofs, many local news agencies have reported companies with several
hundred thousands of dollars in overdue bills. Most recently, the DWSD admitted that Homrich is not equipped to
conduct commercial shutofs.
To get involved, set up community support in your neighborhood, or to fnd out information
Visit
www.peopleswaterboard.blogspot.com www.mwro.org www.d-rem.org www.emeac.org
Call:
1-844-42-WATER if you are in danger of a shutof.
HISTORY AND FACTS:
WATER AFFORDABILITY IN DETROIT
A Call to Action!
Implement the 2005
Detroit Water Affordability Program!
DWSDs afordability assistance program, DRWAP, which has gone unfunded since 2012, and was re-
implemented on July 1. The program is funded by voluntary donations. Currently, there is only $1 million in the
fund to help all Detroiters who live at 200% of the poverty line or below have access to water. Other private non-
proft organizations are in place to assist with water afordability. Organizations, such as The Heat and Warmth
Fund and WAVE are helpful in the short term, yet they cannot accommodate all of residents who currently need
afordable water.
History of the 2005 Program
In 2005, Roger Colton, an expert consultant to municipalities on low-income afordability programs for utilities,
presented an extensive Water Afordability Plan (WAP) for the Detroit Water and Sewerage Department (DWSD).
Mr. Colton spent several weeks reviewing DWSD operations; and speaking with DWSD and City of Detroit
ofcials, local attorneys, residents of the city and community groups to establish a program that addressed the
consumer protection and business needs of DWSD customers and stakeholders.
Proposal Summary
Beyond the impacts on low-income customers, water/sewer bills that are unafordable to low-income Detroit
residents pose a business problem for the Detroit Water and Sewerage Department (DWSD). Increased fnancial
costs to the DWSD result from increased credit and collection expenses arising from the need to chase bill
payments, and increased working capital expenses associated with higher arrears can not be addressed by mass
shutofs. The proposal lays out empirically tested ways to bring water rates down to the EPA-recommended range
of 2.5%-3.5% of household income.
This proposal contains three sets of recommendations to address these social and business problems associated
with the unafordability of water/sewer bills. The proposal recommends:
1. Adoption of a rate afordability program, consisting of a rate discount component, an arrearage management
component and a water conservation component.
2. Adoption of designated fundamental consumer protections involving late fees, service disconnections, and
payment plans; and
3. Adoption of designated collections initiatives directed toward customers having an ability-to-pay.
The combined efect of these three sets of recommendations will not only be to address the unafordability
problems facing low-income Detroit water/sewer customers, but also to rationalize the overall collections eforts
undertaken by DWSD.
Each set of recommendations should be adopted.
For more information
Read the Los Angeles Times article, Thousands go without water s Detroit cuts service for nonpayment. June 28,
2014 (www.latimes.com/nation/la-na-detroit-water-20140629-story.html).
In the story, Roger Colton argues that cities wont get the money they want by simply shutting of services.
Instead, he says, utilities should require residents to pay a percentage of their income to the water department
for service.
Read the full 2005 Water Afordability Program proposal to DWSD at http://michiganwro.blogspot.com/p/water-
afordability-program.html