Baltimore erred in selling stadiums' debt

Call it water under the toll bridge.

Baltimore officials admitted Tuesday that a computer error caused them to mistakenly sell $70,000 in tax liens for overdue water bills owed by the state agency that manages the Orioles and Ravens stadiums.

On Monday, investors bought the liens on the two stadiums at a tax sale auction that listed the properties among nearly 1,000 homes with overdue water bills. Maryland Stadium Authority officials were shocked at the sale and disputed the totals.

By late Tuesday, Baltimore Department of Public Works officials acknowledged the mistake and said the sales would be canceled.

"Properties owned by the Maryland Stadium Authority are exempt from the city tax sale process," the department said in a statement. "The properties went to tax sale due to a computer coding error."

The city now must refund the money that German investors Alexander Diener and Herbert Baeuerle bid for the $5,400 debt the city claims is due for M&T Bank Stadium. Another investor, Bill Vaughan, doing business as Gulden LLC, was the winning bidder on the $63,500 bill the city claims is due for Camden Yards.

None of the investors could be reached for comment.

"We appreciate the clarification and will work with the city to resolve any remaining issues," said Michael J. Frenz, executive director of the Maryland Stadium Authority.

Every year the Ravens and Orioles organizations — and the hordes of fans who scamper for bathroom breaks between plays and innings — rack up bills of nearly $600,000 for water and sewer use at the stadiums.

But stadium authority executives who write the checks for those costs say Baltimore officials have failed since late last year to send them bills and never notified them of the nearly $70,000 past due.

City officials said it would continue working with the authority to sort out billing issues.

The issue left some in the city hopeful that the high-profile blunder could highlight problems with the entire process of selling tax liens on homes that owe water bills, a system that forces some struggling homeowners to abandon properties.

City Council President Bernard C. "Jack" Young said the sale of the stadium tax liens shows how anyone can fall prey to spiking water bills. He said average people have a much harder time getting themselves out of a tax sale.

"Investors are really taking advantage of people's misfortune," Young said. "I was livid they put the two stadiums into tax sale."

So was the stadium authority.

"We have no evidence that those bills are correct," said David A. Raith, the authority's chief financial officer. "We haven't been getting bills on a monthly basis."

City Councilwoman Mary Pat Clarke said the incident may spark more debate about the process. Since the city replaced its quarterly water billing system with a monthly process in October, Clarke has been fighting to get the city to restore an appeals process for challenging billing errors.

"Maybe this is a blessing because it points out that even powerful organizations that we dearly love like the Orioles and the Ravens need the due process of appeals that we're trying to get restored," Clarke said. "I have an awful lot of elderly ladies who have the same issues as the stadium authority."

Unpaid water bills can trigger tax sales when they're at least $750 and nine months late.

Raith said the stadium authority never received any of the thousands of the city's warning letters about tax sales even as the agency worked with the city to resolve billing issues since the fall.

"At no point during my discussions with [the Department of Public Works] has anyone brought up that those amounts are owed," he said.

Frenz said the entire process has been a "waste of time" for the city, the authority and the investors who purchased the liens.

"We obviously have the resources to pay the bills once we determine they're accurate," Frenz said.

Baltimore Sun reporter Luke Broadwater contributed to this article.

ddonovan@baltsun.com

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