City Council Stops Water Shut-Offs, As One Thousand East Lansing Customers Are Overdue

Around one thousand of the roughly nine thousand customers paying quarterly water bills in East Lansing are now behind on payments, according to City Finance Director Jill Feldpausch. And the sum of the arrears — money owed for past-due bills — comes to approximately $300,000. 

Feldpausch says that is about ten times what the City normally reports as delinquent on July 1.

Feldpausch shared this information at Tuesday’s City Council meeting as part of the discussion of Ordinance 1499, a law calling for a moratorium on water shutoffs until July 1. The ordinance passed unanimously with all five Council members present. 

City Manager George Lahanas explained that the impetus behind this ordinance was the statewide moratorium on water shut-offs running out on March 31. The City hopes to use CDBG-CV funds from the federal government — designed to provide economic relief from Covid-19 — to aid residents with past-due bills, Lahanas said. 

This moratorium gives time for the City to receive those funds, and thus to know how much assistance it can provide. There are restrictions on how the CDBG-CV funds can be spent, limits that Lahanas said won’t be fully known until May, when the funds are received.

“Hopefully lots of people can use that program to get out of a financial challenge in terms of the utilities,” Lahanas said. “So, we think that this is a good step, a responsible step, considering the Covid environment and people’s financial hardship, to be able to give people more time to resolve their utility bill.”

The City has also set up a page with links to various resources and programs providing financial assistance due to Covid: cityofeastlansing.com/assistance. 

While the moratorium passed on Tuesday provides short-term relief to those struggling with bills, there’s the more global concern that over 10% of City water customers are behind on their bills. This would seem to signal what could be a great deal of economic distress in this area.

Ordinance 1499 may bridge the gap to get federal funding, but Feldpausch said several times on Tuesday that she is worried by some of the amounts singular customers owe. Some customers, she said, just haven’t been paying their water bills since shutoff moratoriums took effect. 

Those customers with particularly large outstanding balances worry her more than the sheer quantity, Feldpausch said. In response to follow-up questions from ELi, Feldpausch said the arrears range from accounts that owe one cent to one that owes $7,600.

She also clarified that there are nine thousand customers paying for water in the City (a correction to her Tuesday-night estimate of eight thousand). There are eight thousand residential water meters, and an additional one thousand irrigation meters, Feldpausch said. She also said that of the nearly $300,000 of arrears, around $24,000 accounts for late fees. 

According to the City, for the water bills, “The late fee/penalty is 5% of the outstanding balance, charged each quarter after bill due date. There is no flat fee in addition to this penalty for being late.”

“We do have concerns with those that aren’t paying anything,” Feldpausch told Council on Tuesday. “It will be very difficult for them to catch up, and on top of their normal bills, also pay the high arrearage amounts. Some accounts are in the thousands. It’s not hundreds.”

In response to a question from Council Member Lisa Babcock about what happens if bills are not paid in full 30 days after the moratorium ends, Lahanas said he believes the City would revert to the usual practice: shutting off the water. 

Feldpausch added more context, saying that City staff have been helping water customers with past-due bills set up payment plans or find various financial assistance programs. Once the moratorium ends, she said the City would revert to the usual process of notifying customers, giving them a deadline to pay, and subsequently tagging them for water shut off if the bill isn’t paid. 

Feldpausch did say that her staff is aiming to work with residents and to be lenient when possible, not shutting off water if a resident sets up a payment plan and continues to make their payments. Still, if someone were to default on a payment plan, they’d then be tagged for water shutoff, Feldpausch said.

When talking about the possibility of shutting off the water of a thousand customers, which includes all the tagging and notification outlined above, Feldpausch said the City doesn’t realistically have the administrative capacity to do it all at once. 

Babcock asked if having 60 or even 90 days could help staff get more done with residents to set up payment plans and the like. 

“I’m not sure DPW can shut off that many water payers at a time,” Feldpausch said, “So perhaps it’s going to be a cycle approach. After 30 days, we would go cycle-by-cycle, section-by-section of the City.”

Council, Feldpausch, and Lahanas discussed how the City might rein in the arrears and help customers chip away at debts. 

An amnesty program was floated as an option, as was a dedicated public water bill fund created out of donated East Lansing income tax overpayments. Setting aside the other federal funds the City may get, not just CDBG-CV funds, was also proposed. 

Lahanas said he, Feldpausch, and other staff have already been “kicking around” ideas to help residents get financial assistance. He indicated that City staff will come back with some ideas to address the issue and help customers get caught up on their payments. 

Babcock also encouraged anyone who needs assistance to reach out for it.

“If anyone is listening and you don’t think you should ask for help or you’re embarrassed, I don’t think there’s anyone who at some point in their life hasn’t had need of help,” Babcock said. “And it would be our honor to help you to pay it back.”