DETROIT — A contract to disconnect water to delinquent Detroit residents has increased to $12.7 million in three years without City Council approval.
Documents obtained by The Detroit News (http://detne.ws/2dPGZ0J) show that a two-year contract with Homrich Wrecking Inc. for $5.6 million signed in 2013, and extended four times since then, was supposed to resolve the city’s backlog of chronic delinquencies by forcing customers into payment plans.
The shut-offs that began months after the contract was signed led to the disconnection of more than 70,000 homes.
Documents show that the latest extension, signed in August, calls for shut-offs to continue at an average of 540 per week during non-winter months.
“This is much more challenging than anyone expected two to three years ago,” said Gary Brown, director of the city’s Water and Sewerage Department.
Water is shut off by the city when residential accounts are $150 and 60 days overdue.Water officials have said they do not monitor how much money the shut-offs have generated.
“Why are we paying these people when there isn’t any fiscal impact or analysis of shutting off the water? Is it even cost-effective?” asked Lila Cabbil, who opposes the shut-offs and is president emeritus of the Raymond and Rosa Parks Institute for Self-Development.
According to Brown 44,000 residents are currently on payment plans, which have increased the overall collection rate.
“We are trying to change the culture here and get people on payment plans,” said Brown. “When I don’t have shut-offs going on, our customer service centers are empty.”
The contract extensions didn’t go before City Council because they were less than the $5 million threshold required for consideration.
Information from: The Detroit News, http://detnews.com/