Beatrice Johnson's home was sold at tax sale due to an unpaid water bill. (Amy Davis/Baltimore Sun video)
As Baltimore continues to raise its water rates for city customers, the public works department has set a goal of doubling enrollment in discount programs to help the poor and the elderly.
But even if the city hit that target — and records show it is not close — it would be missing tens of thousands who could qualify for reduced monthly bills.
Nationwide, water rate increases are outpacing inflation, pushing bills to levels in the next five years that researchers say could become unaffordable for one in three U.S. households. In Baltimore, rates are scheduled to rise this summer and again next summer, doubling the cost of water in just eight years.
Baltimore officials say they're eager for needy customers to sign up for the discount programs. Critics say they're not doing enough to make that happen.
Adding urgency: Customers who fail to pay their water bills may eventually lose their homes to tax sale.
"It's definitely clear that a lot of people have no idea that discounts are available," said City Councilman Kristerfer Burnett, who represents West Baltimore. "In my position, we take a lot of those calls for help. I am very well aware of the impact that the rates have had on people.
"When you talk about the prospect of a tax sale, it is deeply troubling."
Officials say they are in a bind: Rate increases are necessary to fix the city's century-old water infrastructure and pay for more than $2 billion in federally required repairs to stop sewage from entering the city's waterways. But the increases have made it more difficult for Baltimore's sizable low-income population to make the payments.
The city offers three discount programs to help the poor pay their water bills. Officials have set a goal of enrolling 10 percent of customers — roughly 20,000 water accounts.
But at most, public works figures show, 8,800 water accounts are enrolled.
Far more would likely qualify. Many more Baltimore households are enrolled in state utility discount programs, which have similar eligibility criteria.
Some 21,000 city households are in Maryland's electricity and heating financial aid programs. A spokeswoman for the state Department of Human Resources said internal figures indicate as many as 60,000 households could be eligible.
Public works spokesman Jeffrey Raymond said the agency wants everyone who is eligible for discount water programs to enroll, but he put the onus on customers to sign up. Customers who have trouble paying their bills should contact the department.
"By all means: Let us know," Raymond said. "We want to make sure we're hearing from people who need assistance."
He said the city's new meters and billing systems have empowered water customers by giving them information about their usage, including signs to spot potential leaks. The information can help customers figure out how to change their habits and identify plumbing problems to reduce their bills.
The public works department engages in a variety of efforts to market the financial aid programs and get people the discounts, Raymond said. Officials distribute fliers to senior centers and nonprofits, keep applications on hand in the office at 200 Holliday Street and train customer service representatives to screen people for the programs.
The city's discount plans target families that make less than 175 percent of the poverty rate and poor senior citizens. Raymond said the programs cost the city roughly $1 million in revenue each year.
Raymond said the agency is considering assembling lists of potentially eligible customers by looking at who is signed up for other anti-poverty programs.
About 4,100 accounts are enrolled in the Hardship Exemption Program, which excuses low-income water customers from paying a monthly fee for environmental cleanup, which is a maximum of $15 a month.
About 3,200 accounts held by people aged 65 and older with household incomes less than $30,000 are signed up for the senior discount program. They receive a 43 percent break on their water bill.
She received a tax sale notice in the mail early this year, requested a hardship exemption in early April and skipped her mortgage payment that month to put $525 toward her remaining $2,300 water bill balance.
It wasn't enough. Last month, the city sold the debt on her property in its annual tax sale.
If Johnson doesn't pay the buyer the debt plus hundreds of dollars in additional interest and fees, she could face foreclosure and the prospect of homelessness.
Johnson has lived in the tidy red brick rowhouse for 16 years. She called the tax sale process "just another way to beat the poor man down just to take what you ain't got."
"You think they wouldn't allow someone to just take your home after you done sweat and struggle all the years, and someone could just pay your water bill and take your home for that little bit of money," she said.
"It's not that I don't want to pay my water bill. It's just been impossible."
Advocates for the poor say water rates take a higher toll on lower-income families because they consume a greater percentage of their household budgets.
Researchers at Michigan State University estimated that more than a third of U.S. households will find water unaffordable, according to the federal definition — that is, it will cost more than 4.5 percent of their income — within the next five years. That's triple the current level.
The researchers, who were funded by the National Science Foundation, found that aging infrastructure, urban population decline and climate change are contributing to what they called an affordability crisis.
In Baltimore, water bills include an assortment of charges, including the costs of water and sewer services and fees for account management, infrastructure upgrades, stormwater management and bay restoration.
Public works officials say it's difficult to estimate an average bill. But the typical residential customer uses between 3,700 and 5,200 gallons of water a month. Once fees are added on, that amounts to a bill of between $72 to $99.
A water bill in that range would amount to 2 percent to 2.7 percent of the median $44,165 household income in Baltimore. But in Cherry Hill, Sandtown-Winchester, Oldtown and other poor city neighborhoods, where majorities of households live off incomes of less than $25,000 a year, a typical water bill could represent as much as 4.7 percent of income.
In still poorer areas, such as Upton and Druid Heights, that figure could be as high as 6.9 percent.
Philadelphia is trying a different approach.
In July, the city's water department is set to launch a program aimed at reducing water bills for the poorest residents to as little as $12 a month. People who make less than one and a half times the poverty rate — about $37,000 for a family of four — will pay 3 percent of their monthly income. Poorer customers will pay less.
A spokeswoman for the Philadelphia water department said officials there believe the plan is the first of its kind for a water utility.
"The goal was just to make sure that water was affordable for everybody," spokeswoman Joanne Dahme said. "To make sure that even the poorest of the poor can afford water."
For customers who are behind on their bills when they sign up for the new discount program, any debt will be frozen and late fees be wiped away after two years. Dahme said that element was included to help customers who are struggling to dig themselves out of debt.
"It made a lot of sense for those customers who truly could not afford it," she said. "You don't want them to get so far behind they couldn't catch up."
Roger Colton, a Boston-based consultant who specializes in economics and utilities, predicted two years ago that Philadelphia would bring in more money if it made the bills more affordable than if it focused on trying to collect unpaid bills from customers in debt.
Colton studied affordable bill plans in Pennsylvania, New Jersey and Colorado. He says reducing bills led to increased payments, more revenue and less cost in collecting on overdue amounts.
Colton has agreed with the advocacy group Food and Water Watch to do a similar study in Baltimore at no cost. If the city cooperates and provides the data, Colton said, he could complete his analysis by the end of the summer.
"You can send as many unaffordable bills as you want, but to the extent they are unaffordable, they don't result in revenue," he said. "If people can't afford to pay, they won't."
In Philadelphia, the goal of the new water payment plan is to enroll 80 percent of the 60,000 customers officials believe are eligible. To get the word out, Dahme said, the city is advertising across its transit network and on the radio and launching a new website. Officials are also working with an advisory group of nonprofits that deal directly with poor city residents.
The program is expected to cost about $18 million in the coming year, a cost to be borne by wealthier water customers.
"This is a huge deal for us," Dahme said. "We're very excited about it, I think a little anxious, because it's the first time we're going to launch a program like this."
Raymond, the Baltimore public works spokesman, said agency officials are not considering an income-based structure like Philadelphia's.
But members of the Baltimore City Council are interested. Council President Bernard C. "Jack" Young said he is studying options and plans to draft legislation.
Mayor Catherine Pugh has said she wants to evaluate the tax sale system, including the costs homeowners have to pay to redeem their properties that have gone to tax sale, and whether the city should set up an account to help people pay their water bills.
A coalition of nonprofits and church leaders is calling for a moratorium on the tax sales triggered by water bill debt. The General Assembly this year considered but did not pass such a moratorium.
Henry Raymond, Pugh's finance director, said a team of city workers has been studying the tax sale process for the last 18 months. They're looking for ways to collect more overdue payments, help longtime residents who get behind on their bills and step in before the practice leads to more abandoned property.
"We believe we have an equitable, efficient and effective tax sale process, but with any particular process, there is the opportunity for improvement," Raymond said. "We want to protect homeowners. At the same time, for those delinquent accounts that are legitimately owned, the city has to make every effort to collect."
Charlotte Clarke, a lawyer at the St. Ambrose Housing Aid Center, regularly visits the public works department office to help people sort out problems with their water accounts.
She visited recently to check on the bill of a nun that had a balance of $8,000, even after the department made a $7,000 adjustment. Clarke noted an inconspicuous metal rack with some fliers and applications for discount programs drooping over its edge.
The rack is a relatively new addition to the lobby. There is no outward indication of what the papers stuffed inside are for.
In Clarke's experience, she said, customer service representatives aren't offering information on the financial aid programs.
"How would anybody know what it is?" she asked. "Any very minimal effort would greatly improve the situation, a single sign that explains what it is and points to that corner of the room and says, 'Here's the application. Fill it out.' "
Public works officials say they'll consider adding more signs.