Chicago Leading the Charge To Eliminate Water Shutoffs for Nonpayment, Still Work To Be Done

August 15, 2022 / Blogs

A recent ordinance passed by Chicago City Council amends the language related to water shutoffs for nonpayment of utility bills. This is a bold step and, with further refinement, could be a model for other utilities in Illinois and beyond.

Water shutoffs in recent years

Shortly after taking office in May 2019, Mayor Lightfoot suspended water shutoffs for nonpayment of utility bills. Three years later, the Mayor’s Office introduced an ordinance to codify that temporary suspension, and, on July 20, 2022, Chicago City Council voted unanimously to pass the ordinance. It amends relevant sections of the Municipal Code of Chicago related to water shutoffs. Specifically, the amendments remove authority for the Department of Water Management to terminate water service for nonpayment of assessments or charges for water and sewer service and refuse collection.

If Chicago can get this right, it would pave the way for many similar programs aimed at protecting access to water for millions of households in Illinois, the U.S., and beyond.

In the Mayoral Briefing Book we sent to candidates in 2019, MPC encouraged the city to rework the water shutoff policies to “avoid expensive service termination” and “support residents in a more humane and transparent approach.” We advocated for the continued suspension of water shutoffs for nonpayment in the City of Chicago Water Affordability Analysis report, released in partnership with Elevate in early 2022. This report highlighted “the overwhelming issue of racial inequities tied to water service and affordability.”

Many states enacted shutoff moratoria as temporary emergency measures in response to the pandemic. Most of these have since expired, though various states still prevent service disconnections under certain conditions – such as when the temperature is above or below a specific threshold, during summer and winter months, for some ratepayers (e.g., seniors), while ratepayers are enrolled in a payment plan or other assistance program, and more. To our knowledge, though, Chicago is the first U.S. city to end the practice of shutting off water for nonpayment.

Breaking down the impacts of the ordinance

In the ordinance passed July 20, sections related to residential water service disconnection for nonpayment of charges related to water, sewer, and refuse collection have been amended or removed from the municipal code. (The city retains the ability to shut off water service for industrial users, commercial establishments, and other municipalities when they fall behind on charges.)

This presents a potentially significant win for the City of Chicago’s water burdened residential ratepayers. Nevertheless, MPC along with other water advocates have concerns about various provisions and amendments in the ordinance:

CONCERN 1: “The Commissioner is authorized to terminate any water service supplied by the City if […] the Commissioner determines that said service is causing waste, abuse of water supply, or any danger to public health, safety, or the general well-being of the Chicago Waterworks System;”

Description: A new sub-section was added to Municipal Code, outlining the authority granted to the Commissioner of the Department of Water Management to shut off water service under certain circumstances.
Concerns: Those terms – “waste,” “abuse,” “any danger,” and “the general well-being” – are worryingly vague, allow for too much latitude in deciding when water service disconnection is warranted, and, accordingly, are a liability for equitable water service provision.
Next steps: Unquestionably, drinking water systems must retain the ability to temporarily shut off or terminate water service in certain situations, such as during replacements and emergency repairs, to prevent contamination or other public health risks, and when tampering or theft occurs. Chapter 11-12 of the Municipal Code of Chicago includes sections on fraud, theft, and waste as lawful reasons for water service termination. MPC encourages the Commissioner to promulgate rules as soon as practicable to further develop this and adopt thoroughly explicated and defined policies governing shutoffs and terminations.

CONCERN 2: “During participation in the [Utility Billing Relief program], a Participant is exempt from having water shut off; the assessment of additional penalties and interest on any past due charges incurred before becoming a Participant, or charges incurred while a Participant; and referral for debt collection.”

Description: Chicago’s Utility Billing Relief program is aimed at making utility bills more affordable. The words “having water shut off” have been struck through in the ordinance, meaning participants are no longer specifically exempt from water service termination in the Municipal Code.
Concerns: A clear line of reasoning can be assumed to justify these four words being deleted: if water service is no longer being shut off for nonpayment, Utility Billing Relief program participants cannot have their water shut off, and these words are no longer necessary. However, the provision which grants the Commissioner authority to decide when to terminate “any water service” leaves too much room for interpretation and risk – even for those who are actively enrolled in the Utility Billing Relief program.
Next steps: When developing policies and procedures for shutoffs and terminations, the Commissioner should address this issue, specifically calling out participants in the Utility Billing Relief program as being exempt from water shutoffs except in emergencies or other clearly defined cases.

CONCERN 3: “The remedy by enforcement of the lien for unpaid water bills and charges as provided in Sections 11-12-490 and 11-12-500 of this Code shall not be exclusive of any other legal remedy to collect the amount due and unpaid for water consumed or furnished to, or water service installed or disconnected for, the person liable therefor.”

Description: Chicago retains the ability to record a lien against a property and commence foreclosure proceedings for unpaid charges related to water and sewer services.
Concerns: The ordinance does not preclude the ability for a lien to be placed on a Chicago residence as a “remedy” for nonpayment. Even if the water cannot be shut off, the homeowner faces the threat of eviction if they are unable to bring their account current.
Next steps: Penalties, shutoffs, full payment certificates, and liens have – historically – been part of Chicago’s strategy to collect billing charges. Given the heartbreaking and durable consequences of eviction, MPC will continue advocating with the Mayor’s Office and other city departments to find viable alternative solutions.

Is this a step, a solution, or is something more at stake?

This is a huge step in ensuring equitable water service for the residents of Chicago. We thank the Chicago officials and staff behind this bold legislation. Is it perfect? No. There is still work to be done to ensure every Chicagoan retains access to safe, clean, and affordable drinking water.

To our knowledge, Chicago is the first U.S. city to end the practice of shutting off water for nonpayment.

Water shutoffs are too frequently relied upon as a way to incentivize payment. With shutoffs off the table for Chicago, a new way to incentivize payment is needed. Chicago created the Utility Billing Relief program, which provides a 50% reduction in charges and uses the ability to wipe out unpaid balances (as opposed to threats of shutoff) to incentivize payment. Will it be enough? Others will certainly be watching.

Water affordability is a multi-faceted issue, and a one-size-fits-all solution doesn’t exist. But if Chicago can get this right, it would pave the way for similar programs aimed at protecting access to water for millions of households in Illinois, the U.S., and beyond.

We are deeply grateful to the following for their support of MPC’s robust water agenda: the Charles Stewart Mott Foundation, Crown Family Philanthropies, the Gaylord and Dorothy Donnelley Foundation, Grand Victoria Foundation, the Joyce Foundation, McDougal Family Foundation, and the Prince Charitable Trusts.

This blog’s co-author, Jules Voigt, is a graduate student at the University of Illinois at Chicago studying urban planning. They are passionate about social justice and are interested in using policy and planning as tools to address equity issues within cities.