DETROIT – Hunting for revenue after emerging from bankruptcy, Detroit is stepping up its fight to collect on unpaid electricity bills, filing a batch of lawsuits against churches, schools and other organizations the city says are in arrears for a combined $834,000.
Well-known churches are included in the crackdown.
The city says the Considine/Little Rock Family Life Center, part of the Rev. Jim Holley’s Historic Little Rock Missionary Baptist Church, owes $74,000 for electricity service since January 2013.
The Rutherford Winans Academy, a charter school in northwest Detroit affiliated with Pastor Marvin Winans of Perfecting Church, owes $62,000, court records show.
Several of the organizations named in the lawsuits did not respond to messages seeking comment. Others disputed the amounts or said they were not responsible for the charges.
The facilities were among 10 organizations the city sued in Wayne County Circuit Court last week, seeking $834,000 in unpaid electricity charges.
The lawsuits are part of a crackdown by the administration of Mayor Mike Duggan on electricity deadbeats after the city last summer started shutting off power and issuing other warnings to 38 corporate customers of the Detroit Public Lighting Department that collectively owe about $29 million, said corporation counsel Melvin Hollowell.
“In the past year, we’ve collected $17 million in contacting these companies,” Hollowell said. “We provided at least three notices to the companies. We’ve told everyone we’re open to sit down and discuss payment plans or consent agreements to resolve these matters.”
Detroit has been phasing out its money-losing lighting department, with DTE Energy taking over as the provider while the city’s new Public Lighting Authority works to update streetlights citywide.
Hollowell said that Detroit is required by the plan of adjustment that governs its exit last December from Chapter 9 bankruptcy protection “to balance the budget, and that means maximizing the revenues that are due to the city.”
Hollowell said that, of the 38 organizations, 10 have entered payment plans and 18 remain in negotiations with the city. The 10 the city sued have either not responded to the city’s requests for payments or agreed to payment plans but later reneged.
Another church the city sued, Total Life Christian Ministries, which leases space in a former Lutheran church now owned by Matrix Human Services on the city’s east side, disputed owing the city $170,000.
“The building is an actual sanctuary, but the building doesn’t belong to us — we’re leasing it,” said Bishop Daryl Harris, the church’s pastor.
Harris said Total Life moved to the Matrix center three years ago from a smaller building, pays the agency a flat monthly lease fee and isn’t responsible for utilities.
Ken Brown, director of the Matrix center that houses Total Life, said the facility has for years been a customer of DTE Energy, not Detroit’s lighting department, and he can’t understand how the city could be pursuing back electric bills from Total Life or the building it now occupies.
Surcharges to recoup losses
Detroit told corporate customers that it had failed to pass on the actual costs of providing electricity to its customers in recent years and began placing surcharges on bills in early 2014 to recover losses.
Some customers at the time — including Wayne State University, the Detroit Medical Center and the Detroit-Wayne County Joint Building Authority, which operates the Coleman A. Young Municipal Center downtown — contested the charges and contended that the city failed to provide them with information about why it was seeking to recoup those costs. They’re among customers with whom the city has since negotiated agreements or payment plans, Hollowell said.
Hollowell declined to discuss individual lawsuits or claims by those who dispute being responsible for the charges. “We will continue to talk if there’s information people believe we should have, and we’ll look at it,” Hollowell said. “But it’s important that people continue to work with us in good faith.”