City to aid with overdue bills

Baltimore starts fund to help with water bills and back taxes

Baltimore is launching a special fund to help people whose homes are threatened when they fall behind on city bills, Mayor Catherine Pugh said Wednesday.

Officials said the fund is intended to help homeowners avoid having their property sent to tax auction, the process in which investors may buy their debts, charge them interest and fees or foreclose. The fund is to be aimed at helping seniors in particular.

“We need to help people stay in their homes, not have them out of their houses,” Pugh said.

The mayor’s office did not provide details on how large the fund would be. A spokesman for Pugh said there would be an online application process.

The annual tax sale has drawn criticism because it allows investors who buy tax liens to charge up to 18 percent and to tack on legal fees. That can turn small debts — for, say, unpaid water bills — into big ones. If homeowners don’t pay, the lien holders may foreclose.

Advocates for the poor say taking homes over unpaid water bills is particularly unjust. But officials have been reluctant to Pugh

change a system that allows the city to collect millions of dollars a year in revenue that it might otherwise be unable to recover.

City Council President Bernard C. “Jack” Young has said he plans to introduce his own plan when the council meets next month.

His spokesman said it will cap the amount poor city residents pay for water, a step advocates say would keep people from falling behind on their bills, and reduce the amount of interest investors may charge.

About 8,100 homeowners saw their properties advertised in the annual tax sale last month — some 1,000 solely for water bills.

The average debt on an owner-occupied property advertised for sale was $2,800, auction records show. The smallest debt against a home the city is allowed to sell is $750.

The Baltimore Sun found that the city mistakenly sold liens on the Orioles and Ravens stadiums and other state-owned property in this year’s sale, prompting city officials to undertake a manual review of the list.

The Sun also found that the process is putting historic African-American churches in jeopardy and, even as the cost of water in the city has soared to pay for federally mandated infrastructure upgrades, officials are failing to reach tens of thousands of poor residents who are eligible for discounts.

Advocates have made fresh calls for a moratorium on selling liens for unpaid water bills.

Mary Grant, an activist with Food and Water Watch, said any measure that might help people is welcome, but she does not believe Pugh’s plan goes far enough.

“It’s good to have a safety net there for people who fall through,” Grant said. “But it’s not addressing those bigger-picture problems with water service being affordable.”

Once two planned rate increases go into effect in coming years, the cost of water in Baltimore will have doubled in less than a decade.

Baltimore officials are seeking to more than double the number of people on existing discount programs in the coming year.

Councilwoman Mary Pat Clarke welcomed the renewed attention on water bills and the tax sale.

“I appreciate the mayor’s goodwill in announcing this,” Clarke said. “It’s good that everybody’s getting engaged in trying to solve this tragic issue.”

Baltimore’s water billing system has been plagued with errors. Grant said it’s particularly disturbing that a property lien could be auctioned while an unpaid water bill is being disputed.

City Public Works Director Rudy Chow told the City Council recently that he expects a new metering system that gathers data on water usage hourly to be far more accurate.

The data can help users identify leaks sooner, reducing the possibility they will lead to large bills.

Clarke wants to restore individual hearings to resolve disputes over bills.

“It really is one bill at a time, one person at a time,” she said.

Pugh said Wednesday she also wants to look at howother cities collect unpaid debts. She said she supports reducing the interest rate investors can charge on the liens.

“You tell me where you can get 18 percent,” Pugh said. “That 18 percent, I think, is high, and the council’s going to look into that.”

Investors can charge up to 12 percent interest on liens against a home, and up to 18 percent for other properties.

Advocacy groups are hoping for a more comprehensive solution.

“The whole system in itself seems flawed,” Grant said. “Should investors even be making money on people who can’t afford their water?”

Clarke said one model is a program Philadelphia is set to roll out next month, in which water bills for the poorest will be set as a percentage of their income rather than being based on usage.

“I think we need to create a more sustainable system over the long run so we can perhaps collect more money by billing according to means and allowing people to actually pay their bills,” she said.