Wednesday, April 8, 2015
Detroit: The city that imploded...isn't everyone entitled to free electricity?
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 on Woodward, 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 collectively owing about $29 million, said the city's top lawyer, corporation counsel Melvin (Butch) Hollowell.
"In the past year, we've collected $17 million in contacting these companies," Hollowell told the Free Press. "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 relamp street lights 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, and this is part of that process."
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.
Neither Holley nor Winans responded to messages seeking comment Tuesday.
Another church the city sued, Total Life Christian Ministries, which leases space in a former Lutheran church now owned by Matrix Human Services at Gratiot at McNichols 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 much smaller building, pays the agency a flat monthly lease fee and isn't responsible for utilities at the facility that also serves as a resource center for Matrix clientele.
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.
• From the archives:Detroit says medical center, Wayne State owe millions for electricity
The Free Press first reported the crackdown last June. 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.
Others the city sued, according to court records:
■ TEF-Three, a company affiliated with Robert Thompson, the road-paving magnate turned charter school philanthropist whose offer to fund $200 million for 15 charter schools in Detroit was rebuffed amid a union outcry about charters undermining public schools. TEF-Three is said to owe $108,000.
"There is and has been an ongoing dialogue with the city on their position" on the cost recovery charges, said Joe Kopietz, a lawyer for TEF-Three. "We have yet to receive adequate substantiation of the amount they claim. We fully expect to be able to resolve this, but we're not in the habit of paying a bill that can't be substantiated."
■ CJC Cruises, which operates the Detroit Princess Riverboat based from the downtown riverfront. The city says CJC owes $52,000. The company did not respond to messages seeking comment.
■ Willys Overland Lofts, a loft building on Willis just west of Cass in Midtown. The city says it owes $33,000. Representatives did not respond to a request for comment.
■ The Woodward Academy at Lafayette and the I-375 service drive just outside downtown. The charter school is said to owe $52,000. Officials from the school also did not respond to messages seeking comment.
■ Three additional churches the city claims owes significant overdue power bills: Succourer Ministries ($137,000); New Breed International Christian Center ($108,000), and Emmanuel Faith Outreach Ministry ($38,000). Each of these churches had nonworking phone numbers, and representatives couldn't be located Tuesday.
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."
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