Respectfully submitted by Lawrence E. Rafferty (rafflaw)-Weekend Contributor
I have been watching the water crisis in Detroit for some time now and I have been amazed that it is not a bigger story. If you haven’t heard, the new city Administrator of the City of Detroit that was appointed by the Governor and his Water Department have been turning off the water of needy citizens in Detroit when their past due bills are as little as $150.00. In a city with over 20% unemployment and countless vacant buildings, it seems like Detroit is slowly being destroyed.
“It may not have been a police crackdown, but what she witnessed was definitely a crackdown of a sort. Since last year, the Detroit Water and Sewerage Department has been turning off water at the homes of customers behind on their bills. The shut-off campaign comes at a time of crisis and hastened recovery for Detroit, which became the largest American city to ever file for bankruptcy last summer. The value of the bonds associated with the water department’s debt comes to $5.7 billion, which constitutes almost one-third of the amount estimated to have pushed Detroit into bankruptcy.
The campaign to crack down on overdue bills—which is aimed at customers who are more than two months behind on their bills or who owe more than $150—has been described by activists and scholars alike as an effort, pushed by the city’s emergency manager, Kevyn Orr, to get rid of the bad debt associated with the water department and prep the public entity for privatization.
In a city where the median household income is less than half the national average, 38 percent of residents live below the poverty line and 23 percent are unemployed, it comes as no surprise that at least 40 percent of customers are delinquent on their bills.
The water shut-offs have taken no prisoners. Since this year’s shut-offs started at the end of March, at least 15,000 Detroit households have had their water turned off. But the campaign, a tactic designed to pressure Detroiters into paying their water bills, began with little or no publicity last year, when 24,000 homes had their water shut off, says Darryl Latimer, the deputy director of the water department.” The Atlantic
Since last year, over 34,000 homes have had their water shut off by the City of Detroit and hardly anyone outside of Michigan has noticed. While I am sure that there are some real scofflaws in some of those 34,000 homes, many more are behind in their water payments because they are already strapped for financial resources. When you see the number of unemployed and the statistic that 38 percent of Detroit residents live below the poverty line, it seems clear that a large percentage of the home shut off from an essential human need, do not have the ability to pay.
Should any city be allowed to cut off water to needy residents for any amount? With the shenanigans that went on to get Detroit into bankruptcy, I guess I should not be surprised at the idea that an essential human need can be denied American citizens over such small amounts of money. Is there any hope for the up to 100,000 citizens impacted by the water shut-off?
Lately some of the citizens of Detroit have been hitting the streets to demonstrate against the cutoffs and some have even resorted to illegally turning the water back on. However, many are trying not to make waves because they fear repercussions if government agencies find out that their water service has been cut off.
“Residents targeted by the shut-off campaign have been reluctant to speak up. Some have stayed quiet because they’ve resorted to illegally hiring plumbers, and others—who are without water and relying on neighbors and friends for drinking water and showers—are afraid child-protective services may intervene, as a lack of running water is grounds for social services to immediately take children out of parents’ care.
Even those without children remain reticent. Some feel tarred by a general notion of shame and culpability for not being able to meet such a bare necessity as water. Last week, a headline in one of the local newspapers, The Detroit News, described delinquent customers as “water scofflaws.”
This stigma is enhanced by the painting of blue lines in front of those houses that have just had their water turned off—lines painted by Homrich’s employees after a job is completed. Streets to the south of Roslyn Walker’s home showed blue line after blue line; among non-vacant houses, shut-off water was the norm.
Monica Lewis-Patrick, a community organizer who has been going door to door with fellow activists in order to raise awareness and distribute water, says she has come across old-age pensioners who—not knowing where to turn after their taps were closed off—have gone without running water for almost a year.” The Atlantic
One of the organizers of the most recent demonstration against the water cutoffs was the National Nurses United. This organization went on the record to decry these shut-offs.
“The union National Nurses United (NNU) was one of the national groups involved in organizing the rally. Nurses from the group told msnbc that the water shut-offs, which have thus far directly affected thousands of residents, present a direct threat to public health.
“Water is one of the most basic human needs that we all require,” said NNU official Bonnie Castillo. “And we know that it will result in a public health emergency. Not only for individual health, but community health, in terms of infectious diseases. Individuals can only live without water for a couple of days.” ‘ Crooks and Liars
Should the water be turned off for any resident, of any city or town in the United States because the resident does not have the financial resources to pay for water? I was taught by the good Benedictine Sisters that it was mandatory to take care of the poor. When American city governments start painting lines to delineate who is paying and who is not paying their water bills, have they gone too far?
How can we consider ourselves a great nation, when we treat all of the poor as scofflaws or lazy? Does Kevyn Orr, the Emergency Manager of the City of Detroit have no shame?
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Walk On The Water
By Charles P. Pierce
July 18, 2014
http://www.esquire.com/blogs/politics/The_Water_March
Excerpt:
DETROIT — The march began at Washington and Larned, just down the block from Cobo Hall, where the Netroots Nation hootenanny was being held. There were nurses, and retired steelworkers with looted pensions, and guys dressed up like Robin Hood. They walked down Larned, chanting their slogans and singing their songs. They were protesting something that very few of them ever thought would be an actual political issue in the United States of America in the 21st Century. They were demanding water.
It is now past cliche to say that you never thought you’d have to relitigate, say, birth control, or child labor, but 30 years of conservative dominance leavened with just a touch here and there of centrist Democratic control, three decades of bad ideas prevailing even when they don’t necessarily win – all of this should have taught us one thing: there was nothing that was produced by a century of progressive policy that was considered to be settled by the people trying to unravel it. (This includes Social Security, which, because of its inherent power, was able to hold off both Republican privatizers and Democratic “reformers,” at least for now.)
But, seriously, water?
We are litigating whether citizens have a right to water?
Here?
Now?
The whole thing sounds preposterous. But, since last spring, some 15,000 Detroit residents, living under a special manager because Governor Rick Snyder decided that democracy was too damn expensive, have had their access to water denied. Most of them were in arrears on their water bills; the cutoff for the cutoff was two months or $150 behind, which is ridiculously low, especially in a city with 23 percent unemployment and with 38 percent of people living below the poverty line. The shutoffs are estimated to be affecting 100,000 people in one way or another.
But the special manager, a jumped-up pol named Kevyn Orr, is seen by most people here as playing a longer game than just knuckling the city’s poor. With the city in bankruptcy, a lot of the people in Detroit are figuring that Orr is trying to get rid of the $5.7 billion in water department debt as a prelude to privatizing the water supply for the city. And, given our experience with private prisons, doesn’t that fill you with optimism?
Still, though, water?
“It’s something you never thought you’d argue about,” said Michelle Conyers, a nurse from Ann Arbor who was marching with all the others. “I mean, water? What are you supposed to drink? How are you supposed to wash? How are you supposed to flush your toilets? It’s almost like someone wants to push this city into being some sort of third-world nation.”
Let Them Eat Pucks
Detroit is still sinking money into a new professional hockey arena, despite its bankruptcy.
By Pat Garofalo
July 25, 2013
http://www.usnews.com/opinion/blogs/pat-garofalo/2013/07/25/detroit-plans-to-pay-for-new-red-wings-hockey-arena-despite-bankruptcy
Excerpt:
When Detroit filed for what is the largest municipal bankruptcy in United States history, one of the items immediately placed on the potential chopping block was pensions for current retirees who had worked for the city. A pension shortfall accounts for $3.5 billion of the city’s $18 billion in debt, and the city’s emergency manager, Kevyn Orr, has called for ” significant” pension cuts.
But even with pensions possibly getting the axe – along with who knows what else in terms of services for the already downtrodden city, or even masterpieces at the Detroit Institute of Art – Detroit still seems ready to shell out hundreds of millions of dollars to help pay for a new arena for the National Hockey League’s Detroit Red Wings. As Crain’s Detroit Business reported:
“The Michigan Strategic Fund today approved a plan to sell private activity bonds to cover the public portion of the construction of a $450 million Detroit Red Wings arena in downtown Detroit.
…
“Detroit’s Downtown Development Authority intends to use $284.5 million in property taxes captured within its 615-acre downtown district to pay off the bonds issued by the state to build the 18,000-seat arena.”
Michigan Republican Gov. Rick Snyder touted the plan as an investment in Detroit’s future, saying the arena “should increase the tax base of the city longer term, and should increase the employment opportunities for Detroiters.” But if that’s what Detroit and Michigan lawmakers are banking on, they are setting themselves up to be sorely disappointed.
“Sports stadiums typically aren’t a good tool for economic development,” Victor Matheson, an economist at Holy Cross and an expert in sports economics, told Travis Waldron and me last year. As Matheson wrote in a study with economist Robert Baade, “Researchers who have gone back and looked at economic data for localities that have hosted mega-events, attracted new franchises, or built new sports facilities have almost invariably found little or no economic benefits from spectator sports.” This is particularly true of a hockey arena that is only in use 41 dates a year (unless the arena’s calendar is filled up with concerts or other events, and assuming there is not another lockout).
Adding insult to injury, the bankrupt city is going to be spending money to build a new arena for a bonafide billionaire. Mike Ilitch – who founded the Little Caesar’s pizza chain and owns both the Red Wings and the Detroit Tigers – and his family have a net worth of $2.7 billion, according to Forbes. The Red Wings are the sixth most valuable NHL franchise. Yet public money is being ponied up to give them a new home.
Will Detroit’s Water be Privatized or Recognized as Commons?
by Halima Cassells
6/29/14
https://www.commondreams.org/view/2014/06/29-1
Excerpt:
When it comes to a person’s fundamental needs being met – nothing is more basic and human, than to share. Right now the people of Detroit are being attacked by an unelected regime that represents the interests of the banks and large corporations. Their latest campaign has been to turn residents’ water off. Approximately 300,000 people shut off from water, because this makes sense in their corporate model. Detroiters sharing with neighbors hits all-time high.
Water is life.
We are all 85% water.
Water is a Human Right.
Happening right now in Detroit, next to the Great Lakes (25% of the fresh water for the world), under the guise of bankruptcy; residents are being targeted and pushed out of their homes and subjected to unreasonable rate hikes, in a bid to ultimately privatize Detroit’s water.
“We are not saying that the services of running water should be free, we are saying it should be affordable and accessible by all, and we have put forth the Water Affordability Plan to that end, which was approved by our city council,” says Priscilla Dziubek, of the Peoples Water Board. This plan is self-funding and graduated much like the tax system where no one pays over a certain percentage of their income on water.
There is also an insidious double standard in the way that people are being treated when compared with corporations. Corporations are not being threatened with shut off, yet many owe thousands. Families are being deprived of water for as little as $150 arrears, regardless of past payment history. This nominal amount can have dire effects. Water shut-offs can lead to major health problems, home foreclosure, and removal of children by the state. The massive scale and rate at which these shut offs are occurring bespeaks an ulterior motive: further debilitation of the people of Detroit and an assertion that the water should be managed and controlled by a private corporation.
Zooming out a little further, this whole mess is just another example of how the country is coming apart from the inside out. While we send billions around the world that primarily aids connected corporate entities, while the ability of average people in the richest country in world to make a graceful life for themselves is challenged more every day. Looks like there are plenty more municipalities on the edge too. This is what happens to empires.
Tim,
It is very sad indeed. Water is necessity of life. Many residents of Detroit have fallen on hard times because they have lost their jobs. I think of elderly people like my mother who was able to live in her own home until she was ninety-two because she got help from my sister and me. Not all elderly people have family to help them. The thought of someone like my mother–or a family with children–having their water turned off while exclusive golf clubs and a hockey arena don’t sickens me. We’re becoming a country that is losing its heart and soul.
There will be blood.
In our world today, everything has a price, even the very basic necessities needed to simply exist. Very sad indeed.
I’m distant from these events, but familiar with the structure.
1) Drinking water SERVICES should NOT be a human right (=free) because they — like electrical services — cost money
2) Detroit has mismanaged many dimensions of life, including poverty, jobs and water management
3) The utility MUST continue to operate, and it needs money for that
4) Past debt may not be customers’ fault, since the utility may have over spent, etc.
5) The poor should get income support to pay for food, rent and water. They should NOT be given free water.
6) The utility *should* go after the biggest customers (govt business) FIRST, as they cost of recovering $1,000 will be MUCH lower.
7) All of this implies a heavy welfare burden but that’s where it should go, not the utility.
Bottom Line: Bigger customers should be chased FIRST. Then the government (and taxpayers) should bail out the poor. ALL customers should pay their water bills, going forward.
— David at aguanomics
Is there a breakdown of the price of water anywhere? How much of the bill are superfluous charges such as tax?
The rain in Spain falls mainly in the plain. Build a cistern system- collect the rain water and use it. Jeso.
Meanwhile Obama has requested 1.32 Billion for illegals
Interesting conumdrum. Not many liberals resisted the argument that it was unfair that people who paid for health care were having to pay higher prices due to the burden imposed by those who received health care without paying for it. Nor do they decry the solution, which is to make it a matter of law to require those people to pay for health care by buying insurance, albeit with government assistance.
But now we cannot say that it is unfair that people who pay for water delivery pay higher prices for that delivery due to people who receive water delivery without paying for it, and we reject a solution which requires those nonpayers to pay for water delivery.
Since both health care and water are necessary for sustenance of life, I fail to understand the difference.
Martin Lukacs wrote:
“Detroit’s Water War: a tap shut-off that could impact 300,000 people
A right-wing state and corporate push to cut off water is economic shock therapy at its most ruthless and racist, but resistance is growing
On the city streets with the Detroit 300 community police force’s armed A-team
~+~
Well, I suppose he got off to a good start, though objectivity certainly went out the window. Statements like that diminish his credibility.
Detroit’s Water War: a tap shut-off that could impact 300,000 people
A right-wing state and corporate push to cut off water is economic shock therapy at its most ruthless and racist, but resistance is growing
On the city streets with the Detroit 300 community police force’s armed A-team
Posted by Martin Lukacs
6/25/14
http://www.theguardian.com/environment/true-north/2014/jun/25/detroits-water-war-a-tap-shut-off-that-could-impact-300000-people
Excerpt:
It was six in the morning when city contractors showed up unannounced at Charity Hicks’ house.
Since spring, up to 3000 Detroit households per week have been getting their water shut-off – for owing as little as $150 or two months in bills. Now it was the turn of Charity’s block – and the contractor wouldn’t stand to wait an hour for her pregnant neighbour to fill up some jugs.
“Where’s your water termination notice?” Charity demanded, after staggering to the contractor’s truck. A widely-respected African-American community leader, she has been at the forefront of campaigns to ensure Detroiters’ right to public, accessible water.
The contractor’s answer was to drive away, knocking Charity over and injuring her leg. Two white policemen soon arrived – not to take her report, but to arrest her. Mocking Charity for questioning the water shut-offs, they brought her to jail, where she spent two days before being released without charge.
Welcome to Detroit’s water war – in which upward of 150,000 customers, late on bills that have increased 119 percent in the last decade, are now threatened with shut-offs. Local activists estimate this could impact nearly half of Detroit’s mostly poor and black population – between 200,000 and 300,000 people.
“There are people who can’t cook, can’t clean, people coming off surgery who can’t wash. This is an affront to human dignity,” Charity said in an interview with Kate Levy. To make matters worse, children risk being taken by welfare authorities from any home without running water.
Denying water to thousands, as a sweltering summer approaches, might be bad enough in itself. But these shut-offs are no mere exercise in cost-recovery.
The official rationale for the water shut-downs – the Detroit Water Department’s need to recoup millions – collapses on inspection. Detroit’s high-end golf club, the Red Wing’s hockey arena, the Ford football stadium, and more than half of the city’s commercial and industrial users are also owing – a sum totalling $30 million. But no contractors have showed up on their doorstep.
The targetting of Detroit families is about something else. It is a ruthless case of the shock doctrine – the exploitation of natural or unnatural shocks of crisis to push through pro-corporate policies that couldn’t happen in any other circumstance.
The first shock was the slow disaster that struck Detroit over the last four decades: the flight of corporations toward cheaper, overseas labour; the movement of white, wealthier Detroiters to the suburbs, draining the city’s tax base; a Wall Street-driven financial crisis that left many homeless or jobless; and the deliberate starving of the city of funds owed them by the Republican state legislature.
On its heels has come a round of economic shock therapy. Taking advantage of the severe decline in revenue from Detroit’s first shock, the media, corporations and right-wing politicians drummed up a crisis of fear about financial debt. This has become the pretext for a swift assault on Detroit’s public resources: an attempt to dismantle its schools, to slash its pensions, and to transfer its parks and art and land into the hands of private corporations.
The public water system, a prized resource worth billions and sitting on the Great Lakes, is now the latest target – and the water shut-offs are a way to make the balance-sheet more attractive in the lead up to its privatization.
As Detroiters like Charity Hicks have taken a stand, they have been met by a third shock: literal blows of police force and violence, intended to dampen any resistance.
How Wall Street — not pensioners — wrecked Detroit
While clueless elites continue to blame “reckless public pensions,” a new report tells a very different story
DAVID SIROTA
11/20/13
http://www.salon.com/2013/11/20/how_wall_street_not_pensioners_wrecked_detroit/
Excerpt:
In its house editorial yesterday, USA Today retold the now-accepted story of Detroit’s bankruptcy. Railing on “reckless public pensions,” the newspaper told its readers that the Motor City is “Exhibit A for municipal irresponsibility” because it allegedly “negotiated generous pensions” that were too lavish. In this fable, the average Detroit pensioner’s $19,000 a year stipend — which many get in lieu of Social Security — is somehow defined not only as excessive, but also as the primary cause of the city’s financial problems. Detroit, thus, becomes a weapon in the larger Plot Against Pensions, as the right holds it up as a cautionary tale supposedly showing that A) police officers, firefighters and sanitation workers are greedy and B) America cannot afford to fulfill negotiated agreements to pay public-sector workers a subsistence retirement benefit.
No doubt, there is a tiny grain of truth in this otherwise inaccurate story. Yes, it is true, Detroit is a cautionary tale for governments about financial management and legacy costs. However, it is not a cautionary tale about allegedly greedy employees living the MTV Cribs life off taxpayers. As an eye-opening new report from a former Goldman Sachs executive documents, it is instead yet another cautionary tale about Wall Street’s too-good-to-be-true schemes that end up being, well, too good to be true.
Commissioned by the think tank Demos, the new report out today from former investment banker Wallace Turbeville shows that contrary to the myths about a bloated municipal government overspending on lavish social services, Detroit’s “overall expenses have declined over the last five years” by $419 million thanks to the city “laying off more than 2,350 workers, cutting worker pay, and reducing future healthcare and future benefit accruals for workers.” Today, Turbeville notes that “Detroit has a significantly smaller workforce per capita than comparable cities.” Yet, those draconian cuts still left the city with an annual $198 million shortfall because of three big problems — none of which has anything to do with supposedly greedy public workers and their allegedly overly “generous” pension benefits.
First and foremost, Detroit suffered from an unprecedented loss of public revenue. As I’ve previously reported, this was brought on by many factors. The most obvious of those were the recession and free-trade-related deindustrialization, both of which decimated the city’s manufacturing job base and drove population out of the city. On top of that, the state of Michigan reduced its revenue sharing with the city.
Second, the city and state spent — and is still spending — big money on wasteful corporate subsidies to politically connected private interests. That includes a reaffirmed commitment to spend $283 million — or more than the city’s entire annual budget shortfall — on a new professional hockey arena. Such profligate expenditures have drained revenues out of city coffers.
But perhaps the least discussed factor is the financing cost associated with a series of Wall Street-engineered debt deals back in 2005 and 2006. These schemes crafted by UBS and Bank of America’s Merrill Lynch were supposed to reduce pension fund obligations by using derivatives to try to “synthetically” convert variable-rate interest instruments into fixed-rate contracts.
A few years ago, these schemes were all the rage, as the financial industry’s Masters of the Universe swooped into places like Detroit, Denver and Jefferson County, Ala., throwing so-called certificates of participation, campaign contributions and graft at school boards and city councils, all with the promise that the interest-rate swaps were the key to financial nirvana. Predictably, it was a jackpot for Wall Street and their bankrolled politicians, but it was the opposite for taxpayers.
In Denver, for instance, then-school superintendent Michael Bennet traded his acquiescence to Wall Street’s swap scheme for Wall Street contributions to his U.S. Senate campaign — all while the interest-rate swap scheme he approved blew a $177 million hole in the city’s school budget. In Alabama, JPMorgan made out like bandits, while the interest-rate swap scheme plunged Jefferson County into both bankruptcy and an epic bribery scandal .
It is a similar story in Detroit, even though you probably haven’t heard about it. What you’ve probably heard is that the city’s “legacy expenses” jumped by $62.8 million between 2008 and 2013 — and you’ve probably heard pundits recklessly assume that “legacy expenses” are the same as retirement benefits. But such an assumption hides what’s really going on.
As Turbeville shows, in the five years leading up to today’s crisis, the city’s pension contribution expenses were essentially flat. Yes, its healthcare contribution expenses increased, but they rose by less than the nationwide annual increase in healthcare expenses, meaning Detroit experienced nothing out of the ordinary on that score. So if benefits didn’t drive the legacy cost increases, what did? As Turbeville documents, it was fees, financing costs and payments incurred by Wall Street’s swap scheme. Those expenses constitute more than 61 percent of the total legacy-cost jump…
To be sure, Detroit’s pension system is not entirely blameless. It has certainly had its share of problems. But as Turbeville concludes: “While [Detroit] emergency manager Kevyn Orr has focused on cutting retiree benefits and reducing the city’s long-term liabilities to address the crisis, an analysis of the city’s finances reveals that his efforts are inappropriate and, in important ways, not rooted in fact. Detroit’s bankruptcy was primarily caused by a severe decline in revenue and exacerbated by complicated Wall Street deals that put its ability to pay its expenses at greater risk.”
Chasing Water
https://www.youtube.com/watch?v=SNlSRyanQg8
Follow-up in 2014
I can already see who’s on what side of the impending WATER WARS…
Yeah, All those crooked Dem politicians doing Federal time for stealing tax dollars had nothing to do w/ it. Detroit, like all major cities but San Diego, is run by Dems. The Dem cities are the canary in the coal mine. One party rule, particularly by the tax and spend party, is a recipe for failure. I pick LA next, but Chicago may beat LA to bankruptcy. We’ll know soon.
I think there has to come a time where individuals have to take responsibility for their lives. It is part of life to provide one’s means. If a utility provides services to a household or a business how solvent will it be if large numbers of subscribers do not pay?
Additionally, I wonder how many of those who are receiving benefits assistance, who are not under social security benefits or disability are actually paying water bills themselves? If they are living in public housing or apartments their landlords are doing this. Surely there are those who reside in single family residences but I would be curious to see how many subscribers are in fact in these distressed financial states and not just those who haven’t paid their bills but could have.
One reason if it was privatization in mind they are going to be more aggressive in reducing their unpaid accounts due to sale of their service because it makes the return on the sale higher and it might help ease their insolvency. I personally am in favor of public utilities and to me it is nearly always worse in the long run to privatize utilities.
The PUD (Public Utility Districts) around our state have programs to assist those who are financially distressed. That is an option I would hope the folks in Detroit had available.
’twas the banks and feckless corporations that killed Detroit.