The Receivership Transition Advisory Board voted to revisit a moratorium Flint City Council members supported to prevent the placement of liens on Flint properties for a year.
“Finance people are saying they don’t agree with the moratorium,” said RTAB member, David Tarver who put forth a motion to postpone the board’s decision to a later date. “I don’t have a clear picture of what the position of the administration is.”
The Flint City Council voted 8-0 on May 17 during a special meeting for the moratorium after Flint Mayor Karen Weaver’s administration sent out letters to nearly 8,000 Flint property owners warning them that a lien could be placed on their properties if outstanding water bills.
Councilman Scott Kincaid said the liens would place further hardship on Flint residents as they continue to deal with the city’s water crisis.
“One of the reasons City Council had adopted this resolution is because the drinking water in the City of Flint is still not safe to drink without a filter,” Kincaid said. “We are sill distributing bottled water to residents in the City of Flint…We don’t want to create a hardship on residents who were told in the past not to pay their water bills because the water is not safe to drink. We felt it was unfair at this time.”
Weaver announced in a May 3, 2017 statement that the city was obligated to follow the law regarding the city’s ordinance on tax liens for nonpayment of utility bills. The move gained national attention as Flint City Council members worked behind the scenes to figure out how to stop the lien process.
So far, it is estimated about 8,000 properties have been pegged to have liens transferred to tax bills for two years of billing totaling $5,806,448.62, according to Weaver’s May 3 statement.
The statement also said the process is typically done annually but it was not done in July 2016 because of water relief credits provided by the state covering some of the cost of water bills for both residential and commercial water customers in Flint.
According to the city’s ordinance, the lien process goes into effect when payments are missed on water and sewer accounts for longer than six months.
Mays who abstained from voting on the moratorium said they council went about the decision the wrong way.
“This is an ordinance that has been in place for 40 or 50 years,” Mays said during the June 14 RTAB meeting. “The property way to solve this is to amend the ordinance. I council doesn’t want the delinquencies to go to the county then you will amend the ordinance…You have to do a well thought out change or amend the ordinance.”
Flint’s Chief Financial Officer David Sabuda is out on leave but Interim City Attorney Angela Wheeler said according to Sabuda there has been a decline in payments on outstanding utility bills owed to Flint and the city could face a more than $5-million hardship.
“There was a concern that there would be a financial impact,” Wheeler said during the June 14 RTAB meeting. “According to Sabuda there would be a $5.4-million hardship on Flint…That’s really the only information I have to share.”
If liens are placed on properties, the outstanding utility bill balance would be forwarded to the property owner’s tax bill. If that bill is not paid the property could then go to the Genesee County Land Band.
“These properties end up going to the Land Bank (and) we get no reimbursement for those properties,” Kincaid said. “And a number of properties go back to the county or the Land Bank and we do not get reimbursed for those taxes or those properties.”
Under the moratorium liens will not be placed on properties for at least one year for delinquent bills stemming back to 2014. RTAB members aid they will revisit the issue at a later meeting.