Some big businesses owe millions in city water bills

'What we have is a mess,' councilman says

August 11, 2012|By Luke Broadwater, The Baltimore Sun

In Sparrows Point, bankrupt RG Steel's delinquent city water bills have risen from about $3.5 million in 2009 to nearly $7 million today, according to city records.

Chemical giant W.R.Grace & Co. owes almost $500,000 — even after recently agreeing to pay $2.2 million on a long-overdue bill.

And the Maryland Zoo in Baltimore — a nonprofit that gets funding from the city and state — has an unpaid bill of more than $135,000.

As Baltimore moved to take the homes of hundreds of city residents for unpaid water bills as small as $350, the city water system allowed some big businesses, nonprofits and government offices to run up delinquent accounts totaling more than $10 million, a review by The Baltimore Sun has found.

The amount is enough to cover a quarter of the money the city will get next year from a 9 percent rate increase on its 410,000 water customers.

Officials at the city's Department of Public Works say they are working to collect the unpaid bills — some of which are disputed by the businesses as inaccurate. One agency, the Veterans Administration Medical Center, says it actually paid its bill long ago and can't get the water system to adjust the account — echoing widespread residential complaints about the troubled water-billing system.

But the amount of the debt — and the perception that small residential customers are treated more harshly — has sparked criticism at City Hall and beyond.

"What we have is a mess, obviously," said City Councilman Carl Stokes. "It's unfair to subject some users to one standard and other users to another standard."

Stokes said he takes particular issue with RG Steel's bill, because the company has asked a bankruptcy judge to let it give $20 million in bonuses to 10 top executives.

"Of course it's ridiculous," Stokes said. "We should demand that the utility bill be paid before there are bonuses for the upper management."

Economic consultant Anirban Basu said the overdue commercial bills are detrimental to the city's image. "This is disastrous on multiple dimensions. People should be treated fairly."

The Sun reviewed public records of the bills of 100 of the city's largest water customers. It found a dozen with bills of at least $15,000, totaling more than $10.5 million, that were overdue by at least six months. Some dated back several years. According to the city records:

•RG Steel owes more than $6.7 million on three accounts, including the Sparrow's Point steel mill sold last week to a joint venture that includes a liquidation firm. Two of those accounts have not been paid since 2009.

•W.R. Grace owed $2.6 million for its Curtis Bay chemical plant for more than a year. The company recently paid $2.2 million of that.

•The VA Medical Center on Greene Street is listed at about $800,000. The center says it paid the bill long ago but nonetheless keeps getting turn-off notices from the city.

•One University Condominiums in Charles Village owes the water system nearly $200,000 — an overdue balance that has doubled since 2008.

•The Maryland Zoo owes more than $130,000, a bill that dates back to 2011; it says it has set up a payment plan.

•Baltimore Marine Centers, a collection of five Inner Harbor Marinas, owes nearly $75,000 on two accounts. One of those has not been paid since 2004.

•The Broadway Market on Aliceanna Street in Fells Point owes more than $30,000. Its bill has not been paid since 1987.

•Fort McHenry — a focal point of the city's War of 1812 commemorative events — owes $35,000, a balance that has grown steadily since 2006.

These and other bills from big, non-residential customers went uncollected for months or longer even as the city was taking steps to seize hundreds of residential properties for unpaid water bills — 851 of them in 2010 alone, records show.

The delinquent commercial bills come as the water system has been grappling to resolve problems identified in a city audit released this year. City officials acknowledged that they had overcharged 38,000 mostly residential customers by at least $4.2 million and issued refunds. The auditor has called for another $5 million in refunds.

A spokesman for the Department of Public Works acknowledged the existence of the overdue commercial bills as shown in public records reviewed by The Sun, but declined to discuss specific accounts. He also refused to say how much is owed in total by area businesses.

"DPW is aware of this matter and we have been addressing these cases individually," agency spokesman Kurt Kocher wrote in an email. "It is our intention to make sure that the utility collects what it is owed."

Kocher said the agency wants to be sensitive to customers' issues, such as legal proceedings and third-party debts.

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