Friday, January 7, 2011

Legal Steps Possibility In Wake Of Water Bill Liens

By Lisa E. Crowley
BROCKTON—Brockton residents who have received liens for overdue water bills in this quarter’s property tax bill and refuse to pay the water bill be aware: Unless you specify you want your property tax payment to be applied to the property tax, the city collector’s office will pay the overdue water bill and interest first.
Treasurer-Collector Martin Brophy said the “hierarchy” of payment requires the collector pay the interest and overdue water bill before applying any payment to the homeowner’s property tax.
Brophy said if residents send in their payments it will go to a so-called “lock-box” and the payment will be applied to the overdue water bill and interest first.
If residents do not want their payment to go to the overdue water bill they should include a note within in their payment if mailed, but the best way to ensure the property tax is paid and not the water bill is to visit city hall in person.
“They’re best bet is to come into the collector’s office themselves and tell the clerk at the counter they want the money applied to their property tax,” Brophy said.
Ayanna YanceyCato, a resident with a nearly $17,000 overdue water bill said the word is spreading about the latest hassle in connection with their water bills following the city’s move to attach the overdue bills to residents’ property taxes—a move residents say is a betrayal of promises not to attach the liens and to give them three years to pay the overdue bills if an audit shows they actually used the water.
“What I feel the city did was a back door move—they misled the entire community…I have nothing but pure disgust for this situation,” YanceyCato said.
YanceyCato is only one of about 6,500 residents who received property tax bills this week and learned that the city also included liens—which some city officials are calling special assessments or attachments—for payment of overdue water bills.
The city’s move puts some people in the position of having their mortgage payments balloon because the water bills—which range from a couple of hundred dollars to a couple of thousand to YanceyCato’s $17,000 and Robert Ford’s $12,000—unless paid will increase property taxes.
YanceyCato said in the case of this latest billing snafu she is lucky. She does not pay her real estate taxes through an escrow account, but residents who do, experts say, should contact their mortgage lender to try to make arrangements for payments—especially if they refuse to pay the overdue water bill.
“Homeowners should contact the lender directly and explain the situation,” said Richard Wulsin, a real estate tax attorney with Wulsin Murphy LLP in Norwood and Wellfleet and a member of the National Association of Real Estate Tax Attorneys.
Wulsin said the end result with each bank or mortgage holder will be different for each individual homeowner and there is no assurance residents will have a positive outcome.
“What is likely to happen is the lender will pay that balance and if the water bill adds a significant amount it could inflict some real pain on the home owner,” Wulsin said.
He said homeowners will be at the whim of the mortgage company and believes some will work with residents, while other behemoth institutions like Bank of America and CitiCorp will be difficult to deal with because they are so large it will be difficult to change the way their systems pay those escrow accounts.
Wulsin said it is highly unlikely lenders will extend any increases beyond one year because they do not want a lien on the property because a property with a lien cannot be refinanced or sold without a clean municipal lien certificate and effects the lender’s equity in the property.
While city officials are calling the liens special assessments or attachments, Wulsin said it is a “little deceptive” for the city to say this week’s notices are not liens because the property cannot be issued a clean municipal lien certificate to refinance or sell the property.
While these overdue bills—which are for the fiscal year 2009-2010—have not been filed at the Plymouth County Registry of Deeds and likely will not until 2012, their impact on mortgage holders is similar.
“It’s a lien,” Wulsin said.
Wulsin, who has followed the issue through TV broadcasts, said the city seems to have its “head in the sand” in the way it has handled the situation and wondered why the water department head has not “taken the bull by the horns” to come to a quick and speedy resolution to people’s problems or to pull aside the disputed bills—a measure other cities and towns have done with success.
He suggested people like YanceyCato and Ford who have significantly large bills should hire a lawyer to protect their interests.
Wulsin also advises that if residents want to eventually take the matter to court they must follow the procedures set up by the city to dispute the bill.
He said the first step is to apply for an abatement with the billing authority, which in this case is the water department and Commissioner Michael Thoreson.
Residents have until Feb. 1—the date when the liens are due to be paid—to apply for the abatement and even residents like YanceyCato and Ford who have already received abatements should reapply because the liens are considered new bills.
He said residents cannot miss the Feb. 1 deadline and any other deadlines because without an abatement hearing—the first step—there is no jurisdiction for an appeal.
“Literally, if you are a day late you might as well be late forever,” Wulsin said.
Wulsin said if the abatement is denied then residents can appeal the bills to the state’s Appellate Tax Board—which has jurisdiction over disputed water bills in certain cases.
Mark DeFrancisco, chief counsel for the Appellate Tax Board, said residents must adhere to the very strict timeline and must follow the process to be able to take the matter to court.
He said if the overdue water bills are paid then an appeal would be in district, superior or small claims court.
If the bill is not paid then the matter is handled at the Appellate Tax Board.
He echoed Wulsin’s comments that the process is very strict on deadlines and can be complicated.
“It’s a morass for people to navigate through,” DeFrancisco said.
Meanwhile city officials are explaining why the liens have been issued and unlike what residents expected, disputed water bills were included.
Mayor Linda Balzotti, who has been taking heat for not directing Thoreson to set aside the disputed water bills, said she has no way of knowing which of the 6,500 liens are disputed bills and if she had pulled some aside she would set herself up for charges of favoritism.
“How do I pick and choose,” Balzotti said.
She said when the audit of the water department is completed residents who should have their bills lowered will be reimbursed for any water bill payments they have made.
Balzotti said there is no way the city could have held off on all 6,500 liens because it represents $8.9 million in revenues to the city.
Balzotti and Treasurer-Collector Brophy said the city gets more than half of the payments in the third or fourth quarter, or about $4.5 million and knowing that could not prudently hold back on the 6,500 liens.
“That money would have to come out of the general fund or we would have to increase water and sewer rates,” Balzotti said. “It would cripple the system,” she said.
She said there is a lot of Monday morning quarterbacking going on and in hindsight wished she had argued harder to immediately hire The Abrahams Group—which is expected to give recommendations by April-- to conduct an audit of the water and sewer department’s metering and billing systems instead of allowing a request for proposals process advocated by the City Council which added several months to the process.
“My regret is that the audit wasn’t done sooner. We would already have the recommendations,” she said.
Ward 6 City Councilor Michelle DuBois, who has supported residents in their fight over the bills, said she disagrees with Balzotti that the disputed water bills could not have been pulled and wanted to clarify statements in a story earlier this week about the payment plan option for residents.
DuBois said residents need to meet with Thoreson or his staff to have their bills abated and supports the payment plans because it offers residents an option to spread out their payments.
She said while not everyone is happy with the payment plans, at least it is a way for residents to get out from under some large bills and the plans can be changed at anytime.
Ward 2 City Councilor Thomas Monahan said he was unaware the lien notices would be in the third quarter bills and believes the liens could have been set aside for those disputing the bills.
“I think we’re causing more unnecessary problems for people than we have to,” Monahan said.
He said the way it has been handled has made the city “the laughingstock” of the region.
It is unclear what if any action the City Council can take to help residents.
Those like YanceyCato are no longer trusting in the city to help them and will take care of their own interests and have been looking into hiring legal counsel to aid them.
A lifelong resident, YanceyCato said this situation has caused her a lot of stress and has for the first time made her embarrassed to be a resident of Brockton.
She said while some city officials might hope residents will go away or eat payment plans for water they did not use, many are not willing to do that.
“When you start talking about people’s homes people are going to fight,” YanceyCato said.

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