Monday, June 17, 2024

Sidebar: What Actually Happens To Those Overdue Water Bills?

A brief followup to the Dennis Kefallinos piece that has been getting some play. I eventually did hear back from the Water Department. Fourth time’s a charm as far as media inquiries, I guess. Or perhaps they don’t like it when you write about their apparent inability to enforce collections against giant slumlords. A realtor friend said I might end up in a ditch. Well, YOLO, right? Anyway.

Dennis Kefallinos Owes Half A Million Dollars In Water Bills.

A Drop In The Bucket Of Delinquencies

In a, uh, rather dry e-mail, if you’ll forgive the pun, a spokesperson from the Water Department said that it was “not uncommon” for “drainage-only” accounts to “quickly accrue a large delinquent balance, depending on the number of impervious acres assigned to the parcel.” I mean, guess this kind of makes sense? Drainage fees aren’t exactly user fees. They’re more like, well, externality fees. The drainage tax is assessed at a rate of $750 per acre of impervious surface. And why? Because all of that runoff has to go somewhere. And moving it takes a lot of infrastructure. It’s an incentive to install things like pervious paving or rain gardens. Either way, Dennis Kefallinos has a knack for racking up fees. So it’s not really surprising that he’s not paying the bills.

Alleys: The Back Road To Sustainable Development

Why the drainage tax is important

For all critiques you can issue toward the Water Department with how abysmal it is managed and how terrible its customer service is, it’s an important one to address. Our city has a lot of legacy infrastructure that’s in really bad shape. Of course, a small group of cantankerous activists have fought tooth-and-nail against what they call the “rain tax.” But one might think that users aren’t thinking about drainage fees if they’re not using water on that specific parcel. The DWSD spokesperson went on to explain the comprehensive process of how the Department manages delinquencies:

“Each year, a nonresidential parcel’s delinquent DWSD balance is transferred to the tax rolls to be added to the winter tax bill (DWSD has not transferred delinquent residential accounts to the tax roll since 2013). If the winter tax bill goes delinquent, the City of Detroit tax assessing officer will transfer the debt to Wayne County to initiate the foreclosure process. There are added fees and penalties along the way which serve as a deterrent. Any overages, or charges not captured by the tax rolls may result in litigation depending on the amount and age of the delinquent debt. DWSD is actively pursuing all large delinquent commercial and industrial customers.”

So, if you don’t pay your water bills, the city transfers the debt to the County. The County can then foreclose on you. In most of the United States, the county is the local jurisdiction with the broadest local taxing authority. Exactly why this hasn’t been done for Dennis Kefallinos is unclear, and the Water Department declined to answer this question.

Broken information systems

Another question I asked was why the Department can’t more readily provide this information. The FOIA took weeks. DWSD did not respond to this except to say that they endeavor to answer all FOIA requests in a timely manner in accordance with the law, blah blah blah. Aligning legacy information systems in a department that is literally hundreds of years old is a challenge, certainly. But if CAYMC can do it– fairly competently, I might add- why not DWSD? Anyway, it’ll be interesting to see if these remain delinquent and if so, for how long. The drainage fees are relatively new. But that doesn’t mean the city should be giving this guy a free pass. Stay tuned for more!

Read more about Dennis Kefallinos or Detroit’s other industrial slumlords. Follow this series for more articles on infrastructure.


Nat M. Zorach

Nat M. Zorach, AICP, MBA, is a city planner and energy professional based in Detroit, where he writes about infrastructure, sustainability, tech, and more. A native of Lancaster, Pennsylvania, he attended Grinnell College in Iowa, the Kogod School of Business at American University, the POCACITO transatlantic program, the SISE program at the University of Illinois Chicago, and he is also a StartingBloc Social Innovation Fellow. He enjoys long walks through historic, disinvested Rust Belt neighborhoods at sunset. (Nat's views and opinions are his own and do not represent those of his employer).

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