Cleveland Homeowner Sees Water Bill Go From $40 to $740

The city of Cleveland, located right in the center of the midwest “rust belt”, was hit very hard by the housing crisis. Entire suburban neighborhoods are now ghost towns, with boarded up, decaying once-pricey homes littering upscale outlying areas while the few people who have managed to hang on cannot sell their own homes at any price.

Cities, hit hard by the dramatic drop in tax revenue, have had to severely cut back basic services.

But the Cleveland Water Department seems to have hit on a solution to its financial woes: Just hike the bills in those outlying areas by about 2000%.

Problem solved!

Homeowner Carole Phillips, who moved to the outlying  Cleveland suburb of Solon in 2005, said she has been going round and round with the city of Cleveland and the Water Department for almost a year trying to understand how her water bill jumped from $40 a quarter to $793 a quarter in February 2008.

“I’m a single person living in a one-floor home,” Phillips said. ” There’s no way my water use would go up that much.”

The city has been fielding calls from thousands of suburban Cleveland customers on the same topic, but both the city and the Water Department are severely understaffed due to financial shortfalls and general confusion.

Twinsburg Mayor Katherine Procop (Twinsburg is another suburb of Cleveland) said she contacted Cleveland after hearing grumbles about bills rising between $200 and $1,700 a quarter. Inspections in 528 homes uncovered malfunctioning meters in some dwellings, and Cleveland Water Commissioner J. Christopher Nielson said the huge bills are most likely due to those malfunctioning meters undercharging customers–with the Water Department later having to make up the shortfall.

This repossed 2200 sq ft suburban Solon home on over an acre has a two car garage and is currently listed with ReMax. Just make sure you can afford the water bill.

But he doesn’t really know. He’s just hazarding a guess. He admits the Water Department just doesn’t have enough people to actually read the meters or investigate the problem.

The Cleveland Water Department provides water to 1.5 million households and is the 8th largest water utility in the United States. The Department currently employs 42 meter readers and 72 customer service agents–for 1.5 million households! Last year, the Department had only 32 meter readers, but has since replaced the 10 they lost. Each meter reader is assigned 500 meters a day. Many are inaccessible due to weather conditions, safety issues, or vicious dogs. Understandably, the employees tend to burn out fast.

Twinsburg Mayor Katherine Procop said she contacted Cleveland after hearing grumbles about bills rising between $200 and $1,700 a quarter, and other residents have complained about bills doubling or tripling, prompting Solon Finance Director Bill Weber to meet last month with Cleveland water officials.

President Barack Obama and the U.S. Congress are currently trying to pass an $850 billion stimulus package to jump start the failing U.S. economy. The package is said to include “shovel ready” plans to upgrade crumbing U.S. infrastructure and give aid directly to cities. How this will happen however remains unclear, and the bill still has to be approved by the House and the Senate, which may be more difficult than critics first expected.

Meanwhile, major and obvious systemic breakdowns are occuring across the U.S. in water and electrical public utilities, and also in highway and roads systems. A leak in a huge water pipeline that feeds the city of New York and its outlying areas has been destroying suburban property and causing major sinkholes for years and will not be repaired, at earliest estimate, until 2011. A major metropolitan bridge in Minneapolis simply collapsed last year, right during rush hour killing a number of drivers. It is estimated that thousands of other U.S. roads and bridges are in even worse shape than the Minneapolis bridge, with no funds available to repair them.

All of which should give a foreign investor pause.

You grab a terrific $300,000 suburban home for $180,000 and immediately get socked with a quarterly water bill of over $1,000. When you call to complain, there is no one available to answer the phone.So you jump in your SUV and head for the public utility office, only to fall in the river when the bridge you are driving on collapses beneath you. Stuff happens, but depending on where you buy in U.S., more stuff happens lately than is reasonable or sane.

“I’ve been stonewalled,” said Solon homeowner Phillips, who responded to her most recent $793 water bill by making countless (and fruitless) calls and visits to the water department (without, at least, falling in the river). “I shouldn’t have to go downtown to inquire about a bill or sit on the phone for an hour waiting for a customer service representative.”

Her case is currently pending investigation. Along with thousands of others.

Read more about which U.S. markets to check out now and which to avoid in our article United States Real Estate Prospects for 2009.