Locals Unite In Concern Over Water Bill Collections Restriction

The Senate Budget & Taxation Committee heard House Bill 453, Tax Sales – Water Liens – Moratorium. MACo Associate Director Barbara Zektick testified in opposition along with Candace Donoho, Director of Government Relations for the Maryland Municipal League; Brynja Booth, Esquire, Booth, Booth, Cropper & Marriner; Mary Pat Fannon, Senior Policy Advisor, Mayor’s Office, Baltimore City; Maria DeChellis, PMP, Chief, Customer Support & Services, Baltimore City Department of Public Works; and Bruce Bereano, Law Office of Bruce Bereano. Booth represented the towns of Greensboro, Goldsboro, Oxford, Federalsburg, Trappe, and Queenstown, and Bereano represented Queen Anne’s and Washington counties, and Bowie and Annapolis.

As passed by the House, the bill would impose a moratorium on using tax sales to collect water and sewer liens for one year. Opponents testified that this removes an essential collections tool from local governments and would likely result in local governments having to raise rates on timely paying customers to cover costs to operate water and sewer systems. DeChellis answered questions specific to Baltimore City customers, and addressed questions about collections on water bills in other states. The panel also responded to questions to clarify that no tax sales had been identified which caused the loss of any occupied home in recent years; proponents’ comments that people were “losing their homes” due to unpaid water bills was purely myth.

From MACo’s testimony:

This bill unjustly alleviates delinquent account holders from responsibility for funding key infrastructure, at the expense of timely paying customers. Counties often budget for water and wastewater systems using enterprise funds, meaning that they recover costs for services almost primarily through user fees. They must meet their obligations to maintain their systems – so when they cannot collect on delinquent accounts, they must either cut service or raise rates on all other users to recover the lost funds. While this bill nobly seeks to accommodate customers in need, the result unjustly reassigns infrastructure costs to those who opt to timely pay. …

HB 659, Task Force to Study Tax Sales in Maryland, which this Committee heard earlier this week, has been amended by the House to require the Task Force to “evaluate tax sales to collect delinquent water charges and alternative methods of collecting delinquent water charges” as part of its charge to study the tax sale process. (Crossfile SB 823 had its hearing in this Committee on March 8, and passed Third Reader last week.) Counties are more than willing to participate in this effort. However, placing a moratorium on the use of tax sale to collect on utility liens prior to the Task Force conducting its work is premature. More importantly, in addition to severely limiting local governments’ abilities to sustain fiscally viable utility services for the entire year, it also compromises the Task Force’s access to timely, reliable data on the use of tax sale to enforce utility liens. The Task Force cannot effectively study an activity that the General Assembly has already prohibited.

The bill is now in the Senate Budget and Taxation Committee, and if that Committee votes it out favorably, it will go to the Senate floor and likely become law. Concerned readers are encouraged to contact their senators in opposition to the bill.