CHICAGO - U.S. Bankruptcy Judge Steven Rhodes, who is overseeing Detroit's bankruptcy, ruled in favor of the city Monday and dismissed a restraining order blocking the city's ability to shut off water to nonpaying customers.
Rhodes ruled there is no right to free water, that the lost revenue would hurt the already struggling city, and that he lacked the authority to halt the shut-offs, according to local reports. He announced the ruling Monday as the high-profile trial on the city's bankruptcy debt plan resumed after nearly two weeks' break.
"As it prepares to show the court its plan is feasible the last thing [Detroit] needs is this hit to its revenues," Rhodes said.
Detroit began shutting off water to nonpaying residents in the spring. The action sparked a national controversy, and activists filed the restraining order asking for a six-month moratorium on account closures to give the city time to set up a payment plan.
Detroit Mayor Mike Duggan, who gained control of the Detroit Water and Sewerage Department at the end of July, quickly ordered a month-long moratorium on shut offs that last through the end of August.
During a two-day hearing on the restraining order held last week, attorneys for the water and sewer department argued that they already had a payment plan and that they would have to raise rates if the delinquent bills continued to accumulate. Attorneys also argued that a new regional authority that will gain control of most of the department will set up a $4.5 million affordability fund for struggling customers.
The lawyer for the activists said they would likely appeal the ruling, reports said.
