Overdue bills rise as water rates soar

Toledo officials crack down on scofflaws

This house at 802 Waverly Ave. is one of 23 properties owned by City Councilman Tyrone Riley. Earlier this year, Mr. Riley faced the threat of water shut-off at at least one property after he racked up unpaid bills totaling $8,680 on 14 houses.

As a lackluster economy and rising water rates strain many people's budgets, the city of Toledo is implementing a no-nonsense approach toward residents who don't pay their water bills or who siphon off water illegally.

Water consumers with outstanding bills are increasingly being threatened with shut-off from the city's Department of Public Utilities, and for the first time this year the city filed criminal charges against Toledoans for stealing water.

Among residents feeling the brunt of the new enforcement approach is City Councilman Tyrone Riley, who owns 23 properties, some of which he rents out.

Earlier this year, the councilman faced the threat of water shut-off at at least one of those homes after he racked up unpaid bills totaling $8,680 on 14 houses. The amount he owes has dropped since to $3,900 after Mr. Riley enrolled in payment plans.

"We have been threatening to shut off more than we have in the past, and that has gotten people coming in to either get on a payment plan or pay their bill," David Welch, public utilities director, said. "I don't want people to think we are big, mean DPU. We do work out a payment plan and work with people."

Mr. Welch said his department is making an effort to go after residents before their bills spiral into the thousands of dollars and out of control. Most people, about 98 percent, do pay their water bills, he said.

Still, the city has $2.3 million in bills between 60 and 180 days overdue. An additional $7.1 million is owed to the city from bills that are up to 30 days old, but those are not yet considered delinquent.

City officials said people are also more aggressively stealing water -- which is sometimes discovered after water service is shut down to a house and then starts flowing soon thereafter. In those cases, the property owners illegally turn the water back on, said Leslie Kovacik, a city of Toledo attorney who works in the water department.

"We have not seen this level of … stealing," Ms. Kovacik said. "They are getting more aggressive."

In one case, a homeowner's water service was shut off for nonpayment several times. Even after city workers sealed the curb-front water shut-off valve with concrete, the home- owner dug down around the concrete, broke it, and turned the water back on with a so-called water key, Ms. Kovacik said.

That homeowner is among three facing charges. Another man was charged with obstruction, disorderly conduct, and resisting arrest after attempting to stop a city water worker from turning off his service.

"The city is moving in a more proactive stance," Ms. Kovacik said. "It's difficult to find people who steal."

Rising rates

The tougher stance comes at a time of rising utility rates, high unemployment, and droughtlike conditions that have encouraged some to water lawns more often.

Water rates went up 9 percent in 2011 and will continue to rise through 2014, at a slower rate. The city also increased sanitary-sewer rates, by 3 percent, last February.

City officials have estimated the average customer who uses 3,000 cubic feet of water quarterly would pay about $186 in 2011, up from $164 in 2010. That's to rise by $7 a quarter this year, then jump by $7.40 a quarter in 2013 and by $7.85 in 2014.

Residents with homestead exemption discounts pay less.

Water bills are sent out quarterly.

Earlier this year, Mr. Welch said delinquency rates could drop because of a new voluntary monthly payment system for water supply, refuse pickup, wastewater disposal, and storm-water disposal.

Last year, the city shut off water service to 6,535 properties. So far this year, officials have carried out 5,367 shut-offs.

"So we are outpacing last year," Mr. Welch said. "We obviously realize it's a tough economy, so we try to work with people with payment plans."

The city collected $119.4 million last year from water, sanitary, and storm-water bills. The city's refuse fee -- which is included on water bills -- generated an additional $9 million.

Delinquency

Councilman Riley defended his own water bill delinquency, blaming his tenants for racking up the outstanding charges. He said although some tenants simply don't pay, many are caught off guard by the city's billing practices.

Some of his tenants paid the water bills on time, but those bills were based on estimates of their water use, Mr. Riley said. Months, sometimes more than a year, later, another bill arrived detailing actual charges that exceeded the original estimate, the councilman continued.

"That creates some problems with some tenants," he said. "Some people on a fixed income don't have resources to pay the water bill."

Mr. Welch said the voluntary monthly payment system coupons are averages, but the quarterly bills are derived from a meter reading.

Additionally, the city began the voluntary monthly payment system coupons in January, which would not explain why Mr. Riley's tenants would pay less than the billed amount before that time.

Under city law, property owners must keep water bills in their name and are held responsible for them, even if they didn't use the water themselves.

Mr. Riley had the water service for some of his properties listed under either his wife's name or that of a man named Keith Riley, but the city this year required him to put them all under his own name.

Mr. Riley said he arranged for payment plans to cover the outstanding water bills on his properties so he could encourage the tenants to pay the charges back.

"If the property owner pays for the outstanding bill, then it removes the incentive for the tenant to pay," he said.

Mr. Riley said he is hopeful the city's plan to install automatic water meters in every Toledo home will ameliorate the problem of unexpected water bills.

"If the resident is not getting an accurate reading each and every month the bill is sent out, I don't see how you can hold them responsible for the water usage that they received six months later," he said. "It's an unexpected bill that they hadn't planned for."

With the economic downturn, Mr. Riley said, he is having to deal with a higher number of tenants not paying their bills. That, together with depreciating property values, has made real estate investment less attractive than it was in the past, he said. The councilman explained he became involved in property ownership and renting about 25 years ago, seeing it as a retirement vehicle.

"When I first started out as a self-employed business person, I thought it would be a good investment," he said. "But I'm finding out that owning real estate has its challenges."

Striking a balance

Joe McNamara, council president and Utilities and Public Service Committee chairman, said the city needs to strike a balance between pursuing those who don't pay their bills while making allowances for people who are struggling to pay because of economic distress.

"It's always a tough balancing act because the city really needs to be sympathetic to families that are having a hard time during these tough economic times," he said. "On the other hand … people who do pay their water bills on time end up subsidizing people who go for a while without paying."

Mr. McNamara said he was surprised to hear that Mr. Riley had not kept up with the water bills on his properties.

"Elected officials, knowing that they're in the public eye, tend to be extra careful with how they interact with government, so I am a little surprised," he said. "But it sounds like he's on a payment plan and doing the right thing by the city."

Councilman Tom Waniewski said Mr. Riley's situation highlights the risk entrepreneurs take in any kind of business. Those who invest must be ready to handle any problems that arise as a result, he said.

"Businessmen beware," he said. "You've got to deal with it as part of the cost of doing business. If you're in the business of rental properties, that's part of the cost of doing business."

Mr. Waniewski said he has little sympathy for those who don't pay their water bills. He applauded the city's move to crack down on delinquent utility payers.

"The people, in my opinion, who are interested in having water are interested then in paying for it," he said. "The people who are cheating the system are cheating those taxpayers who are paying and who are obeying the law."

Councilman D. Michael Collins said those who are deliberately delinquent on their water bills should be prosecuted.

However, he questioned whether the city should be allowed to backdate charges uncovered as a result of erroneous meter readings.

"Is it fair that we, as a provider of the utility water, because of our failure to identify a problem and then that problem manifests itself in a water bill over $1,000, do we have a responsibility in terms of our negligence?" he asked.

Contact Ignazio Messina at: imessina@theblade.com or 419-724-6171.