Michigan Allocates $20 Million to Relieve Customer Water Debts

The state is using federal CARES Act funding to help residents pay off past-due water bills that accrued during the pandemic.

Sunset in Detroit. The city will receive $9.7 million from Michigan’s CARES Act funds to forgive customer water debts that accrued during the pandemic. Photo © J. Carl Ganter / Circle of Blue

By Brett Walton, Circle of Blue

Michigan residents who are behind on their water bills will soon be getting some relief.

The Michigan Department of Health and Human Services will distribute more than $20 million to 116 water utilities, through an intermediary, to cover water bill debt that their customers accrued since March 1 when the pandemic emergency began.

The debt-relief measure draws from Michigan’s share of federal CARES Act funding. The $2.2 trillion emergency package that Congress passed in late March included $150 billion in aid to state governments.

Though the number of customers with overdue water bills is rising because of the pandemic, many states have not found it easy to use CARES Act funds to assist these people. The U.S. Treasury Department guidance says that the money cannot be used to cover government revenue shortfalls. That’s partly the reason that Vermont’s program for utility bill assistance that taps CARES Act funds is open only to customers of investor-owned utilities. Customers of municipal water departments are excluded from the $8 million program. North Carolina’s bill assistance program with CARES Act funds is available to renters but not homeowners.

Other states are interpreting the guidance more broadly. The Michigan Legislature decided in July that assistance to customers of municipal water utilities was acceptable. Lawmakers authorized $25 million of the state’s CARES Act funds for relieving the financial burden of unpaid water bills that were a result of the pandemic. The goal was to keep water flowing to households during a public health emergency.

Lawmakers stipulated that residents had to meet certain criteria to qualify for debt forgiveness: residents had to be eligible for food assistance benefits and their past-due balances had to have accrued after March 1. Customer debts that existed before the pandemic were not eligible for forgiveness.

The Department of Health and Human Services worked with community groups and utilities to identify residents who met the criteria. As of October 8, they found $20.2 million in payments that could be made, according to Bob Wheaton, a department spokesperson. Payments will be funneled to utilities through the community groups. Utilities will then notify customers.

The remainder of the debt-relief funds that lawmakers approved is not intended to sit idle. Wheaton said that utilities and community agencies will continue with local outreach efforts to find others who may be eligible.

“We have an opportunity to work directly with low-income households with the remaining funds to manually determine eligibility using a walk-in process until the funds are depleted,” Wheaton wrote to Circle of Blue in an email.

Debt-relief payments are capped at $700 per customer account for water and $700 for sewer. Some items in the legislation that authorized the funds will not be carried out. Wheaton said that after the direct payments there will not be enough money left over for a 25 percent discount on water and sewer bills for eligible customers through the end of the year.

The largest amount of funding will go to the Detroit Water and Sewerage Department. The utility that serves the state’s largest city will receive $9.7 million. Other utilities that will receive more than $1 million include Flint ($1.9 million) and Saginaw ($1.2 million). Some of the distributions are tiny – Chassell Township, home to fewer than 1,800 people, will receive $229.85.

The debt-relief funds are one of several ways that Michigan lawmakers have responded to household water needs during the pandemic. In March, Gov. Gretchen Whitmer ordered water utilities to restore water service to homes where it had been disconnected because of overdue bills, and she prohibited utilities from disconnecting water service. Whitmer’s executive orders, however, were invalidated by the Michigan Supreme Court on October 12.

The Department of Health and Human Services is also using coronavirus funding to repair faulty plumbing, water wells, and septic systems. That funding is available through December 30.

Brett Walton

Brett writes about agriculture, energy, infrastructure, and the politics and economics of water in the United States. He also writes the Federal Water Tap, Circle of Blue’s weekly digest of U.S. government water news. He is the winner of two Society of Environmental Journalists reporting awards, one of the top honors in American environmental journalism: first place for explanatory reporting for a series on septic system pollution in the United States(2016) and third place for beat reporting in a small market (2014). He received the Sierra Club’s Distinguished Service Award in 2018. Brett lives in Seattle, where he hikes the mountains and bakes pies. Contact Brett Walton