City officials defended yesterday their policy of selling delinquent water bills and other small debts to private debt collectors along with back-tax bills, saying Baltimore would possibly jeopardize its finances if it can't use the threat of foreclosure to collect overdue bills.
Their comments came during a hearing of the City Council's Taxation and Finance Committee on a proposal by Bernard C. "Jack" Young, the 12th District councilman, to eliminate water-bill liens from the city's annual tax sale. No vote was taken.
Young reintroduced his bill -- which he first proposed in 2005 -- after The Sun reported last month that at least 400 city homes have been lost over debts other than property taxes in the past three years. Most stemmed from unpaid water and sewer bills, but some included alley repaving charges, sidewalk repairs and fees to register rental property. About half of the foreclosures involved unpaid charges of $500 or less.
Young's original bill was withdrawn late last year after city officials argued that many homeowners wouldn't pay their water bills if they didn't face potential foreclosure. City officials maintained their opposition yesterday.
"Without the tax sale, we'd have to raise rates unconscionably," said Stanley J. Milesky, chief of the city's Bureau of Treasury Management. "That has an impact on everyone in the city, not just the homeowners at risk."
Last night's hearing took place after the city's decision earlier in the day to delay a proposed 30 percent increase in water and sewer bills that would affect nearly 2 million residents, after auditors said that the city is collecting millions more than it needs to improve its aging underground infrastructure. Comptroller Joan M. Pratt said she believes the city has collected $40 million more than necessary over the past six years in sewer and water rates.
The city's next tax sale is scheduled May 14. As of March 22, the sale list included 2,697 properties that are on it solely because of unpaid water and sewer bills, according to city officials.
Milesky noted that the city's overdue water debts have fallen from about $21.8 million on Feb. 1 to $7.3 million. "That's the best snapshot I can offer to what would happen if we didn't have the tax sale to reinforce this," he said. "The easy answer is to take water bills out of the tax sale, but I would tell you there is great risk in that."
