FLINT (AP) – A judge ordered Flint to reduce water rates by 35 percent and stop cutting off service to people with unpaid bills, extraordinary steps that could put the city in deep financial trouble again.

Genesee County Judge Archie Hayman also ordered the city to stop collecting a special charge that replenishes the water fund until officials follow the law and justify it in writing. The money was intended to make up for $15.7 million paid in 2007 to settle a lawsuit over sewage overflows.

“I am mindful that this could be devastating to the city so the court is not going to at this point make a ruling that the $15.7 million has to be paid immediately. … But that money has to be replaced at some point,” Hayman said.

In response, Flint said the judge didn’t follow Michigan law.

“This will have a devastating financial impact,” city attorney Peter Bade said. “The city will immediately seek a stay of this order and review by the Court of Appeals.”

Another city lawyer, Anthony Chubb, told the judge that the decision “would likely result in bankruptcy” if it stands, The Flint Journal reported.

Hayman said the 35 percent rate increase in 2011 was illegal because residents didn’t have enough notice. He said the increase needed to be phased in over months, not immediately enforced.

Flint emerged from a financial emergency in April after nearly 3 { years. It had been run by state-appointed emergency managers.

Separately, Flint is replacing every water meter in the city at an estimated cost of at least $4 million.

 

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