Detroit’s Bankruptcy Judge has issued a ruling stating that he cannot force the City of Detroit to not shut off water for residents.
Bankruptcy lawyers for both the city and advocacy groups submitted briefs regarding the issues.
The bankruptcy court ultimately decided that bankruptcy law does not allow such a ruling.
Detroit’s bankruptcy judge today said he lacked the authority to issue a restraining order to stop water shutoffs over delinquent bills, saying that there is no constitutional right to water and a moratorium would be a financial hit to the Detroit Water and Sewerage Department.
“Chapter 9 strictly limits the courts’ power in a bankruptcy case,” U.S. Bankruptcy Judge Steven Rhodes said as he read a ruling from the bench this morning.
While Rhodes’ ruling made it clear he understood the scope of the problem of water shutoffs in a city with deep poverty, he said the plaintiffs in the case — advocates including Moratorium Now, the Peoples Water Board and the National Action Network — did not make the case that a six-month moratorium was necessary or within his powers.
He also noted that Detroit and Wayne, Oakland and Macomb counties are in the process of approving a new Great Lakes Water Authority under which Detroit would maintain ownership of the region’s water and sewer system but lease the pipes that largely serve the suburbs, in exchange for $50 million a year for 40 years dedicated to fixing aging water and sewer lines.
Given that Detroit is in bankruptcy and under intense pressure to make every operation in the city as cost-effective and efficient as possible, “the last thing it needs is this hit to its revenues,” Rhodes said.
Alice Jennings, a lawyer representing the plaintiffs who sought a moratorium on water shutoffs, said she is disappointed in Rhodes’ ruling and will look to appeal his decision.
“No one ever said the water had to be free,” Jennings said. “Our position is the water had to be affordable. We’re still looking for affordable water.”
Jennings said the most important part of Rhodes’ ruling was his admission cutting off water service causes irreparable harm. Jennings pointed out the city does not have specific data on how often water has been cut off at homes with children or disabled people.
Jennings said federal mediators and the state came up with a plan to save art at the Detroit Institute of Arts. Why not a plan to save people without access to affordable water, she asked.
“We need to evaluate how many people are without water and the safety and health risks involved,” she said. “Come up with the grand bargain to save the health and safety of the children and seniors.”
The testimony came this morning in the hearings on Detroit’s bid to get out of bankruptcy.
Rhodes also is likely to hear updates from city lawyers about the agreement reached last week to keep emergency manager Kevyn Orr on the job until the bankruptcy exit strategy is approved, yet restore power to run city government to Mayor Mike Duggan and the City Council.
Detroit Free Press: http://www.freep.com/story/news/local/michigan/detroit/2014/09/29/detroit-bankruptcy-resumes/16393381/
