Detroit halts its water shut-offs -- for now

People hold a banner against the mass water shut-offs to Detroit citizens behind in their payments, during a protest in downtown Detroit, Michigan, July 18, 2014. REUTERS/Rebecca Cook

Detroit's financially embattled residents are getting a small measure of summertime relief, as the Motor City attempts to cast off the dubious title of America's largest bankrupt city.

The city's Water and Sewerage Department on Monday announced a 15-day moratorium on shutting off water to people who are behind on their bills.

"In case we have missed someone who has legitimate affordability problems, this will allow them to come to us to see if they can work out payments," department spokesman Bill Johnson told the Detroit Free Press. "We've always maintained that what we were doing was a collection effort, not a shutoff effort."

The temporary fix comes as Detroit announced late Monday that current and former city workers and retirees had overwhelmingly voted to accept sizable pension cuts. If Detroit's bankruptcy plan is approved by a judge, most beneficiaries will see their pensions reduced by 4.5 percent and will lose annual inflation adjustments. Retired police officers and firefighters would see a small cut in yearly cost-of-living raises.

The city, staggering under the burden of about $18 billion in long-term debt, filed for Chapter 9 bankruptcy protection a year ago this month in what is the largest ever municipal insolvency in the U.S.

The planned water shut-offs had sparked large protests last week, as well as a class action by some Detroit residents. The city had cut off water to around 7,200 homes and businesses last month, compared with nearly 1,600 during the same time period last year.

Water has reportedly been restored to more than 40 percent of customers who had had their water turned off, after they paid their bills or agreed to payment plans.

But in a letter to city officials, Kary Moss, executive director of the ACLU of Michigan, criticized those officials for creating a "humanitarian crisis" for Detroit's poor, children and elderly. "Low-income city residents should not be forced to pay the mounting cost of disastrous bond deals, crumbling infrastructure and a dwindling population," she wrote.

At a trial scheduled to start next month, a U.S. bankruptcy court judge will determine if Detroit's restructuring plan is fair and workable.

  • Bruce Kennedy

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