The Gabber takes a look at the past due water accounts in Gulfport – and the City’s process for collecting them.
Do a bunch of property owners owe the City of Gulfport large amounts of money?
Are there others who should be getting money from the city?
How exactly are these collections being handled?
After hearing complaints and allegations of wrongdoing on both sides, The Gabber reached out to City Hall in an attempt to get some official answers.
One page of a recent city report showed that accounts more than four months past due in several categories – water sales, water penalty, sewer charges, refuse collection, and refuse penalty – totaled anywhere from $10,000 to $30,000.
Is the City of Gulfport attempting to collect any of these fees?
Yes and no, according to Gulfport Finance Director Cheryl Hannafin.
In the case of water, most of these properties no longer have service but are being billed on a “stand-by” rate, which is the minimum needed for maintenance of the system. “We call it ‘ready to serve,’” she said.
Some properties have been in this category for 5 or 10 years, although they are shrinking in number because of the scorching real estate market that has led to quick property sales in recent months. All of them have liens attached due to unpaid bills, and they must be reconciled before service gets reconnected.
“The City has chosen not to foreclose on these properties,” said Hannafin. “If they are not paying their property taxes, the tax collector can foreclose on them. But we are a small city and there are a lot of complexities and rules to follow.”
Some properties remain on stand-by for a long period of time because they are caught up in probate. It could be because an elderly homeowner died and his or her heirs are ironing out the estate. There are a variety of possible reasons, Hannafin explained, but in any event, she said the City will get what is owed before anyone else moves in.
“They will not get water service until they clear those liens,” said Hannafin. “We will not turn the water on. Although we may not collect the money as quickly as if we moved forward with the foreclosure process, we do at some point collect that money.”
Hannafin explained the process further:
The law allows the City to disconnect the water after two months of nonpayment. Water bills average around $100 per month, and the City now requires a $200 deposit for a new account to be established, so in most cases that covers the two months that aren’t paid.
In the case of rentals, the law does not allow the City to place a lien a property based on the balance a tenant owes. But after a 30-day period following disconnection of service, the bill reverts to the property owner’s name.
While an owner’s water might be shut off after 60 days, the bill does not stop accumulating. The City places a lien after $500 is owed. The water will not be turned back on until the lien is satisfied.
“I understand that if you look at the numbers independently without understanding the process behind it, you might have some questions,” said Hannafin. “But upon further investigation you can see that these properties are liened, and anyone can pull up copies of the liens through the County Clerk’s office. There is interest on them as well, and the city is collecting interest on past-due balances.”
As for the other side of the issue, in which property owners sometimes have credits on their accounts, there is a specific process for claiming that money as outlined in the ordinance the City Council passed in 2019. Many of those properties were also on stand-by for a number of years before being purchased, often by an investor, who simply paid the liens and moved on to restore the property and perhaps flip it.
“If they went to a title company and said, ‘We need to pay these liens,’ and paid without a dispute, the file is closed,” said Hannafin. “They would not be due any refund. They would have had to come to us prior to turning the service on to dispute the charges.”
Due to recent trends in the real estate market, it is not unusual for a check to arrive unannounced in the mail at City Hall after a property is sold by family members resolving an estate or to an investor.
“They see the liens because they do a search, and they pay the bill. There is no dispute,” said Hannafin. “We are not going to offer a credit to somebody who is not disputing.”
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