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article imageOp-Ed: Detroit's controversial water shutoff reeks of 'too big to fail'

By Calvin Wolf     Jul 28, 2014 in Politics
Detroit's deep financial woes have been public for years. Many of its residents are behind on their water bills, and the city has been controversially shutting off water to some delinquent residents. But are delinquent businesses getting a free ride?
Since the beginning of the Great Recession in 2008, America has become well versed in the concept of "too big to fail." While individuals could lose their jobs and become destitute and homeless, big companies received bailouts. The logic was that big companies employed lots of people, and allowing them to go bankrupt would hurt the country worse than forcing taxpayers to subsidize inefficient businesses. Though much of the nation is starting to see bluer skies since the depths of the Great Recession, the city of Detroit is still stuck in near post-apocalyptic grey.
Many of Detroit's residents are behind on their utility bills, especially water. Controversially, the city has begun shutting off water service to many residents who are delinquent on payments. If shutting off water, a necessity for life itself, was not bad enough, the Daily Beast reports that commercial properties are not receiving the same treatment. The Detroit Water and Sewage Department is apparently owed some $9.5 million by its top 40 commercial and industrial accounts...but no big businesses have seen their service suspended.
Do municipalities follow the concept of "too big to fail" and give rich businesses and business owners a break while cracking down on the poor and middle class?
Sadly, this seems to be the way of things, and for a few key reasons. Firstly, big businesses and wealthy residents have access to lawyers, who can quickly and convincingly threaten to sue any service provider who suspends service for insufficient payment. "We dispute the bill," the lawyer will say, "and if you shut off services while we are negotiating we will sue you for lost revenue. And for punitive damages." Eager to avoid an expensive lawsuit, the service provider may cave, allowing the big businesses to continue to shortchange the bill.
Municipalities, even if they know they are in the right, may balk at the prospect of expensive legal action. When dealing with poor people, however, there is much less worry about legal fees. The poor homeowner cannot afford a legal team.
Secondly, big businesses and wealthy residents can make it physically more difficult for service providers to suspend service by building obstacles. It's easier to shut off water and power to a small house than a giant factory. Some places even have security fences and can prevent service provider employees from accessing the property. This, coupled with the prospect of lawyers, can make service providers balk at trying to shut off utilities to wealthy commercial and residential properties.
Cities should craft legislation making it quicker and easier to go after delinquent commercial utility customers for missing payments. It is unfair for poor and middle class residential customers to be treated roughly while the rich get handled with kid gloves. Either give everyone some leeway or make sure that the one-percenters do not get to skimp out on their bills by building physical obstacles around their meters and threatening to sic a team of lawyers on anyone who complains.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of
More about Detroit, Detroit Bankruptcy, Water, utility bills, Poverty
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