As of June, the Housing Authority of Baltimore City owed more than $7 million in water bills to the city, according to a report released Tuesday by the city’s Office of the Inspector General.
The inspector general’s investigation began last October, when the office received an anonymous complaint alleging that the HABC had stopped paying its water bills in 2018, and owed the city’s Department of Public Works millions of dollars.
Ultimately, the office, led by inspector general Isabel Mercedes Cumming, did not support the allegation that payments stopped in 2018, but it did find that HABC’s outstanding balance with the city was significant, most likely because the authority was making partial payments instead of paying the full balance.
The report also chronicles key issues with the city’s oft-criticized water billing system, which might have contributed to confusion on the part of HABC about what was owed.
“When asked about HABC’s payment history and outstanding balance, DPW and HABC confirmed that HABC has been paying water bills, but not the full due amounts. HABC explained it only pays the current charges because there is insufficient explanation from DPW of the fluctuating outstanding balance,” the report read.
According to the report, HABC’s balance has fluctuated from $6 million to $16 million between January 2020 and June 2023.
When the inspector general’s office asked about the changes, a DPW supervisor noted that DPW billing operations were temporarily interrupted because of the ransomware attack against the city and during the coronavirus pandemic. The supervisor said that housing authority’s high balance is likely a result of its partial payments, according to the report.
The report from Cumming’s office calls on the city to settle the balance with HABC, and improve its existing procedures for debt collection. In its fiscal year 2024 budget, the Department of Public Works received funding for a new debt collection team of 8 to 10 people, according to the report.
A May 2023 report from the city’s system listed 186,350 delinquent water bill accounts in the city, with a combined $319 million owed.
In a statement issued midday Tuesday, HABC said it “has always and continues to pay” for water services.
“HABC also agrees with the suggestions of the Office of the Inspector General for DPW to avoid confusion regarding amounts due,” the organization said. “HABC consistently works with DPW to verify bills, which includes credits and debits. We will continue work with DPW to correct any erroneous past due balances.”
Late Tuesday, HABC officials contacted Baltimore Sun reporters to say the inspector general’s balance was “completely inaccurate.”
“In fact, HABC is current on unpaid balances,” said Ingrid Antonio, a spokeswoman for the authority.
On Wednesday, DPW spokeswoman Jennifer Combs said the department is still meeting regularly with HABC to review accounts and “proactively address all billing related matters.”
“We are continuing to audit HABC accounts to identify the full extent of the issues and are working with the housing authority to address them,” she said.
There are plenty of possible sources of confusion when it comes to HABC’s tab, according to the inspector general.
For one thing, the housing authority owns some 7,000 properties in the city, but only 1,209 properties were actually listed as “sub-accounts” on the HABC’s bill, according to the report.
And sometimes, payments flowed into the HABC account without being flagged for a specific property. As a result, they are listed as credits on the HABC’s bill.
According to the report, the way those credits are displayed on the bill is a source of confusion. The bills can include both an “Amount Due” number and an “Actual Balance” number, but only the latter category actually takes into account the credits, and is therefore the true amount owed, a DPW staffer told the inspector general.
DPW has discussed “reconfiguring the bill” to eliminate the confusion, according to the report.
In addition, the inspector general found that there were discrepancies between the department’s internal data, and the publicly available data online. In a sample review of the water bills for 70 HABC properties, three of them had different tallies depending where you looked, according to the inspector general report. About 50 of the 70 accounts had received a payment in 2023.
In an interview with The Baltimore Sun, Cumming said she was further concerned to learn that DPW has only one employee handling all the city’s master accounts like the ones assigned to HABC. That data entry, Cumming said, is manual.
In a response letter, dated Sept. 5, DPW interim director Richard Luna said a meeting had been arranged for Monday to see if the city and the HABC could reach a “mutually acceptable settlement agreement.”
A meeting had also been arranged for an internal meeting on Wednesday to delve into the discrepancies between its internal data and the publicly available data.
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Luna also said DPW would complete a “comprehensive audit” of HABC properties within the system by Dec. 1, adding that any corrections would be made by Dec. 29.
Baltimore’s water system, which includes customers in both Baltimore and surrounding counties (largely Baltimore County) but is managed by the city, has long been plagued by water billing system problems.
In 2012, for example, a city audit of billing errors found the department overcharged thousands of customers by at least $9 million combined. In 2019, it was revealed the city had not billed the Ritz-Carlton Residences in the Inner Harbor for $2.3 million in water used since 2007.
The joint report from the Baltimore and Baltimore County inspectors general, issued in December 2020, showed the city also lagged in addressing requests for repairs, particularly in the county. According to the report, there were more than 8,000 open “tickets” for problem water accounts that had been unresolved, many of them for years.
An audit of fiscal years 2019 and 2020 showed the city had no process to collect on customers with delinquent water bills and was not monitoring billing complaints from its Baltimore County customers to ensure that they were addressed in a timely manner.
The city manages 400,000 total water meters in the city and county.
Billing and repair problems promise to be part of the discussion of the Baltimore Water Governance Task Force, which is holding its inaugural meeting Wednesday evening in Randallstown after it was established by the General Assembly earlier this year. By January, the task force must submit a recommendation to the legislature about how to improve the governance structure of the water system, potentially by allowing for more collaboration between the city and the county.