Arrears on unpaid water bills have reached hundreds of millions of pesos in Morelia, Michoacán, where state and local governments, as well as a university, have failed to keep their accounts up to date.

The general manager of the local water utility said the 500-million-peso (US $25.6-million) debt “has created financial problems.”

“The average rate of nonpayment is 10%,” said Julio César Orantes Ávalos. “Some of the users who account for unpaid bills are the largest users, to the tune of 500 million pesos. We have payment plans to allow them to get their accounts current. They are making weekly payments, like in the case of the state government.”

Orantes said the biggest debtor is the University of San Nicolás de Hidalgo, which owes 53 million pesos. The next largest are the state government at 16 million pesos, the Morelia municipal government at 11.5 million, and the Secretariat of Education, 11 million.

It’s not just large consumers who are behind, but small users too. Just half keep their accounts current.

The Morelia municipal council has suggested raising water rates in order to make up for the unpaid bills. The rates are already among the highest in the country.

Orantes said that although the water utility is currently functioning with a deficit of 150 million pesos (US $7.7 million), it has enough to pay its 700 employees for the rest of the year. He is hoping payment plans will help reduce the staggering debt.

“The state government, the university [and] the municipal government are getting their accounts current during this administration, [and] they are reducing their debts.”

Sources: Milenio (sp), La Voz de Michoacán (sp)