City sees sharp rise in unpaid water bills

Hard times have contributed to a 70 percent rise in the number of delinquent water bills, city water officials say.

The Department of Water Management says the increase is likely related to the lagging economy. Spokesman Tom LaPorte says customers often put off paying water bills when other expenses are rising.

"These are difficult economic times, and we're sympathetic to our customers. But we do have to insist that when they owe water bills that they pay them. So we've been very conscientious in our efforts to collect and serve notice when bills become delinquent," LaPorte said.

Two other factors may be exacerbating the problem - a recent increase in the rate city residents pay for water and the installation of new automatic meter readers in many residences.

A 15 percent hike in the water rate went into effect as part of the city's 2008 budget. A similar increase is planned for the next two fiscal years.

Sonya Smith works in 5th Ward Alderman Leslie Hairston's office. She says the increased rate, combined with economic forces, have caused an increase in the number of residents asking for help paying water bills. The ward, on Chicago's southeast side, includes Hyde Park, Grand Crossing, Woodlawn and the South Shore neighborhoods.

"It's because of their financial situations, just not having the money to pay," Smith said.

Department of Water Management Deputy Commissioner Bill Bresnahan says the 15 percent increase has had little effect on a typical water bill and that even with the rate hike, Chicago has one of the lowest water rates of any city in the Great Lakes region.

"Our water rates are incredibly low. The increase that was put in place - we went from $1.33 per thousand gallons to $1.53 per thousand gallons. It is 15 percent, but it's 15 percent of a very small bill," Bresnahan said.

Another factor that may be influencing the rise in unpaid bills is the recent installation of automatic meter readers.

Before the city decided to begin installing the new readers, water bills were calculated in one of two ways - either by a meter that had to be read by a department employee or by a  formula that assessed the average amount of water use.

The automatic meters electronically track the number of gallons used, and according to the department, are more efficient and accurate. Installation of the new meters began on the North Side in the fall of 2007. As of Aug. 1, 30,602 automatic meters had been installed across the city, Bresnahan said.

The North Side's 40th ward was one of the first to get automatic meter readers. Tim Czarnecki, manager of the 40th ward office, says the office has received about a half dozen complaints about bills being much higher since the installation of an automatic reader.

"Some residents, who were paying $100 every other month for their water, received a bill for $1,000 to $1,200," Czarnecki said.

"We've been working with these residents to get their issues resolved with the water department," he said.

Bresnahan says problems with the new system have been minor and relatively few. The new meters are not to blame, he says.

"Many of these complaints come from the fact that either the previous water meter was very slow and not working correctly, or the residents had a problem, like a leaky toilet, which caused them to be using much more water than they were aware of," he said.

Bresnahan said the department's five crews averaged about 63 shutoffs a day for July. That's about eight more shutoffs per day than each crew was averaging last year, Bresnahan said.

For those unable to pay, the department offers assistance programs that allow residents to pay a portion of their bill and create a payment plan for the balance. The plans require  the customer to keep the account current by paying subsequent bills. Late bills are assessed a fee of 1.25 percent of the bill balance after 30 days and an additional 1.25 percent after 60 days.

LaPorte, the department spokesperson, said the department does not release its criteria for deciding when to shut off water service.

In addition to the water department, other organizations offer help to residents unable to pay their water or other utility bills.

Kathleen Molnar is program director for the Chicago Emergency Fund, an organization that provides financial assistance to low-income individuals and families in the city.

She says the fund has seen an increase in the number of requests for assistance in 2008, compared with 2007, and says the rise is directly related to the economy.

"In all types of assistance - we've seen people who are without jobs longer, or lose a job and in the past, would have found a new one really quickly. But they're not finding it as quickly, so they need more temporary short-term assistance to keep them from becoming homeless until they get reemployed," Molnar said.

Molnar says the organization gets more requests for help with paying other utilities than for water bills, but said the fund has seen an increase in the number of requests for utility assistance this year. She urges residents who are unable to pay their bills to call 311, the city's service request line, and ask for short-term help.

Other utilities have also seen a rise in unpaid bills and service disconnections.

Peoples Gas, which supplies natural gas to 840,000 residential, commercial and industrial customers in Chicago, according to its website, reported a 33 percent rise in the number of shutoffs during 2008, compared with 2007.

The company offers programs to help people avoid shutoff. Bonnie Johnson, manager of public relations for Peoples Gas, says she's trying to encourage people to think ahead to winter and enroll in an assistance program now to avoid future problems.

"We understand the tough economic times can make it difficult for people to pay their bills," she said. "We're eager to work with our customers to find ways to help keep from getting their gas shut off," Johnson said.

Kimberly Johnson, a spokesperson for ComEd, said the company has seen a 5 percent rise in late or unpaid bills this year. ComEd did not do any shutoffs in 2007, under an agreement with the state, but their shutoff rate for the first six months of 2008 is 5 percent lower than the same period in 2006, Johnson said.

LaPorte, spokesperson for the water department, says the increase in unpaid bills has not affected the department's ability to provide water services, but does add expense.

The department has seen a rise in costs associated with unpaid bills including additional postage, man-hours and the cost of referring accounts to law offices for collection.

He said the city hasn't seen such a large rise in the number of residents unable to pay their bills in recent history.