On June 27, the Receivership Transition Advisory Board (RTAB), a state-appointed board that oversees decision-making in Flint, voted unanimously to overturn a moratorium on tax liens that was passed by the Flint City Council in May of this year.
Effective July, thousands of residents will have their unpaid water bills rolled onto their property taxes, which leads to home foreclosure if the bills aren’t paid.
Water that was, and still is, unsafe.
Flint Mayor Karen Weaver says she will defy the board’s decision, saying, “I am ordering the city’s chief financial officer to not transfer the liens to the county,” which would disrupt and delay the foreclosure process.
The Receivership board operates in Flint much like the Emergency Managers- above the heads of elected representatives, imposing the State’s will on residents and government officials. On the surface, this defiance of the State’s will seems reasonable and compassionate.
However, Mayor Weaver’s insubordination against the board could also gain her leverage over the City Council – who are delaying a proposed 30-year water purchasing contract with Great Lakes Water Authority, which was drawn up by the State and independent contractors. The Council has been stalling this deal because they haven’t been granted requested information on the details of the contract. Obviously, a 30-year contract worth hundreds of millions, including baked-in rate hikes for Flint residents, is concerning much of the Council, and they are requesting more time as well as important details that GLWA and state officials haven’t given them yet.
The State of Michigan, through the MDEQ, just sued the city of Flint for not signing the deal, further increasing pressure on the Council.
David Sabuda, the Chief Financial Officer of Flint, convinced the board that the moratorium would be too costly. However, when questioned, his calculations seemed to be based on faulty assumptions.
During the meeting, he tied in the potential loss of $5.1 million that the city could lose in water collections ($12 million in fiscal year 2018-2019) to the potential deficit he said would be incurred if the City Council didn’t sign the GLWA deal.
In an interview after the RTAB meeting, he answered that he didn’t know, exactly or approximately, how many residents would be affected by these tax liens. He also contested a recent report put together by Michigan Radio that stated over 2,700 residents owed more than $1,000 in unpaid water bills. Their report also found that 10% of all Flint residents had delinquent water bills.
Deb Cherry, Genesee County Treasurer, announced she will defy the State, claiming that she won’t foreclose on homes that are turned over to the county. However, residents’ credit will still be decimated by their homes entering into asset forfeiture, which the law asserts will happen before the property is foreclosed on.
In Flint, it is extremely significant that these many people owe hundreds or thousands in water bills- that will soon be attributed to their property taxes. Many people may choose to leave their homes rather than try to make up the bill; the property values in Flint are so low already that the water bill would be worth more than the house.
Mr. Sabuda, however, didn’t have an estimate of how many people, rather than pay these exorbitant water bills, may just pack up and leave- which would have the double effect of the bills going unpaid, and a resident leaving the tax base. It is extremely detrimental to the city’s finances when large amounts of people leave the city- and that Mr. Sabuda didn’t factor these risks into his presentation to the Receivership Board is extremely concerning.
He also had a lot of assumptions about residents’ ability to pay these bills.
“Some of those dollars, I will admit, are high – but a lot of them aren’t – and they are manageable.”
Mr. Sabuda’s use of the term “manageable” is extremely short-sighted for a Flint employee whose job it is- supposedly- to know the city’s financial status and the financial status of its residents.
In the Michigan Radio report, which was collected from Flint city data by use of the Freedom of Information Act, about 3,000 residents owe between $500-$1,000 in water bills. As stated earlier, over 2,700 residents owe more than 1,000. So, out of the 9,138 residents included in the report who owe water bills, almost 2/3 owe more than $500.
In Flint, over 40% of the population lives below the poverty line. According to Sabuda, “a lot” of these bills “are manageable.” In a financially hurting community, an extra 20 dollars can be difficult to come by let alone bills that are over 500 dollars.
While these bills may be “manageable” under the eyes of someone like David Sabuda, who makes $140,000 a year before perks and benefits, to most Flint residents these bills are not only bank-breaking but unethical as well. At the Special City Council meeting in May, where the Council voted to enact the moratorium, they included an admission that while water lines are still being replaced in the city, until that work is completed, residents are still at risk for water contamination.
However, risk of contamination apparently isn’t enough for funds being allocated to cover residents’ water bills. Sabuda also stated after the Receivership Board meeting: “You’re not allowed to put public money onto private property, unless you have a health issue -”
A reporter jumped in: “Isn’t that what we have, a health issue?”
Sabuda: “Well, to a certain extent.”
Only a dozen residents died of Legionnaire’s disease from the water “to a certain extent.” Thousands of children will grow up with negative neurological effects from contaminants, but only “to a certain extent.” So don’t worry, Flint residents, all of your symptoms of poisoning: rashes, hair loss, early-onset arthritis and osteoporosis, neurological disorders, bacterial infections, tooth decay and loss- are only health issues “to a certain extent.”
Sabuda also had one more thing to say about the Snyder-appointed, un-elected Receivership Transition Advisory Board’s decision to reverse the decisions of elected officials:
“The law says no free service.”
Well, the law also says that the city shouldn’t poison their residents.
Watch David Sabuda’s comments here: