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Coalition calls for end to tax sales in Baltimore over unpaid water bills

A coalition of advocates, church leaders and watchdog groups called on city leaders Thursday to immediately halt tax sales for water debt, citing erroneous bills and high costs.

A coalition of community advocates, church leaders and watchdog groups called on Baltimore officials Thursday to immediately halt tax sales for water debt, citing erroneous bills and high costs.

Del. Mary Washington, a Baltimore Democrat, said Mayor Catherine Pugh and the City Council should establish a moratorium and scrutinize all sales over the last three years to make sure no homes or churches were sold over questionable bills.

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"We are all together in this fight whether it's about the church building or the people sitting in the pews," Washington said. "Too often we're finding that the original decision to send something to tax sale is not at all transparent and is fraught with problems.

"Let's hold it. Let's take a break. Let's look at it."

The news conference was called after The Baltimore Sun published an article Sunday about congregations that are losing their churches because of unpaid water bills, even as some church leaders say they challenged the accuracy of those bills.

The investigation highlighted the latest concerns that have arisen over the city's tax sales and water billing problems. The Sun reported last month that the city sold liens on the Orioles and Ravens stadiums for unpaid water bills in what officials have said was a computer error. Critics have challenged whether the sales are fair amid complaints that the city limited consumers' ability to contest water billing errors.

Baltimore's tax sale — an annual online auction of property liens that allows the city to bring in millions of dollars in outstanding taxes, water bills and citations — has long drawn criticism, especially for the inclusion of debt from unpaid water bills. The Department of Public Works has been plagued by water billing problems over the years.

About 1,000 homeowners faced tax sale at the May auction for unpaid water bills, along with dozens of churches. If property owners don't pay the debt, the investors who buy the liens can ultimately foreclose on them.

Homes can go to tax sale if the owner owes at least $750 in unpaid water bills that are nine months late. The rate for non-owner-occupied properties is $350.

Several churches caught up in recent tax sales are pursuing legal remedies.

Friendship Baptist Church, a 1,200-member congregation in the 6000 block of Loch Raven Boulevard, is suing the city in District Court for breach of contract, fraud and intentional misrepresentation of their disputed water bills. The city sold that church at tax sale last month, according to online records, even though church leaders say they paid the inflated bill.

William S. Barnes Sr. Memorial Apostolic Church is fighting an attempt by an investor to take its building in Northeast Baltimore. The Rev. Mark James and several members of his congregation showed up in court Tuesday with Washington and secured a postponement in their case so they can prepare a legal strategy.

"I have found that the tax sale is really egregious," James said at the news conference. "I have faith, though, in my city that we will come together and do something."

Pugh said this week she is examining the entire water billing system. She said she wants to look at the costs associated with redeeming a property caught up in the tax sale process and whether to set up a special account to help people pay water bills.

City Council President Bernard C. "Jack" Young said he is drafting two pieces of legislation. He wants to find a way to adjust the interest and fees people must pay to redeem their property from the investor who buys the lien.

Another bill would address water and sewer rates. Young said he is considering whether increases should have to be approved by a board and if people should pay a tiered rate based on their income or age.

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"I don't know what our final legislation would look like, but I am sick and tired of seeing people lose their homes to tax sale for small water bills," Young said.

Young said he has successfully helped lower the interest rate investors can charge on property owners' debt. It's now 12 percent for owner-occupied homes and 18 percent for other properties. He also pushed in 2012 for the administration to stop seizing homes based on estimated water bills, a practice that is no longer used.

Additionally, Young said he is working with public works officials to look into glitches in a new monthly billing program rolled out in October as part of an overhaul of the water meter system. He also wants to explore the feasibility of shutting off water as an alternative to the tax sales.

Electric, phone and internet providers "normally cut your utilities off," Young said. "We should just turn the water off and they'll pay it."

Rudy Chow, who runs the city's Public Works Department, told council members this week that he expects the new smart-meter technology and billing program to dramatically improve water billing. The new system allows the city to measure how much water a property uses hour by hour and deliver the information wirelessly.

Along with the changes, the department revamped the billing appeals process, eliminating homeowners' ability to request an informal hearing with a third party.

A statewide review of the tax sale process is expected to get underway soon. Gov. Larry Hogan recently signed a bill to create a 17-member task force to examine the process, which dates back to at least the 19th century.

Washington, the state delegate, sponsored legislation during the General Assembly session that ended in April that would have suspended tax sales statewide for a year. The bill passed the House but failed to get a vote in the state Senate.

She said officials have many alternatives to putting homes, churches and other properties, including small businesses, up for tax sale. The city could sell the debt — without attaching the lien — to a debt collector, or get to the root cause of why some bills are unpaid, including that years of rate increases may have made water unaffordable for some.

Mitch Jones, a senior policy advocate at the nonprofit Food and Water Watch, said water affordability is a key concern in the debate. Rate increases are continuing to be phased in through the summer of 2018 to help pay to fix the city's crumbling water and sewer infrastructure.

Jones said when the advocates talk to people about the connection between unpaid water bills and people losing their property, they are often met with surprise.

"People cannot believe you could lose your house or church because of an inability to pay your water bill or — as is frequently the case here in Baltimore as all of us who live here know — if your bill is wrong or you don't get it," he said.

Baltimore Sun reporter Ian Duncan contributed to this article.

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