City home seizure for unpaid water bills limited

State bumps auction trigger from $250 to $350, requires longer delinquency

March 31, 2011|By Julie Bykowicz, The Baltimore Sun

State lawmakers have told Baltimore officials they can't seize houses for unpaid water bills so quickly, or for so little money owed.

Under legislation that gained final approval this week in the Senate, the city would be able to enforce a lien on a home only if the owner were at least nine months behind and owed more than $350 in outstanding water and sewer bills.

That's slightly more generous than current law, under which the city may take a home if the bill is just six months behind and totals $250 or more.

Some lawmakers had sought an end to water bill lien enforcement altogether. The legislation, which also has passed the House of Delegates and is expected to be signed into law by Gov. Martin O'Malley, represents a compromise.

"It's a balance," said Sen. Bill Ferguson, who sponsored the legislation. "It's weighing the city's need to help keep water rates low, against people who are really struggling."

With O'Malley's signature, the legislation would take affect July 1. It would not affect the city's annual property auction for unpaid debt, which is scheduled for next month.

Cities and counties across the state and country use lien enforcement as way to collect bills.

Ferguson, a freshman Democrat from Baltimore, said ending that ability "would be devastating to the city."

The city says it needs the threat of taking property to induce people to pay their bills.

"Every dollar that is overdue affects the rates of all customers," city legislative aide Mary Pat Fannon told lawmakers in committee, according to her prepared remarks. She said bond-rating agencies look unfavorably upon municipalities that are unable to collect revenue.

Mayor Stephanie Rawlings-Blake's office helped broker the compromise to preserve at least some authority to continue enforcing liens, though the city could collect $3.1 million less in 2012 sales because of it. Much of that money might still be recouped in later sales, city officials said.

City Council President Bernard C. "Jack" Young, in a statement, praised Ferguson "for taking up this issue on the state level and working to protect families from being kicked out of their homes and onto the streets."

Baltimore County residents use the city water system but are not subject to lien enforcement and would not be affected by the legislation.

Fannon called lien enforcement a "collection tool of last resort" and described for lawmakers how it has changed over the years. Until 2008, the city could take homes for unpaid water bills amounting to just $100. That year, the General Assembly raised the minimum amount to $250. At the same time, the city was allowed to turn off water sooner.

Those changes have halved the number of properties receiving final bills and legal notice solely for water and sewer liens, Fannon said.

Last May, however, the Huffington Post Investigative Fund reported that officials had just auctioned liens on 12,689 Baltimore properties whose owners failed to pay local taxes and municipal bills, including water, a possible record annual amount.

A 2007 investigation by The Baltimore Sun found that at least 200 Baltimore homeowners had lost their residences in the previous three years because they owed $500 or less in unpaid municipal charges, such as water bills.

Del. Jill Carter was among the thousands of city residents who received notice this year that their homes would be on the city's tax auction block in May.

The Baltimore Democrat said she was unaware of her unpaid water bills, dating to April 2009, until a Sun reporter called this month. The city said she has since paid her bill of $1,027.16, so her house will no longer be offered at the auction.

julie.bykowicz@baltsun.com

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