NBC 10 I-Team: City hikes water rate as councilman and businesses owe $1M in unpaid water

Residents in East Providence will be paying more for their water now its city council approved a plan that will increase water bills and change billing from quarterly to monthly. (WJAR)

Residents in East Providence will be paying more for their water now that the city council approved a plan that will increase water bills over the next several years and change billing from quarterly to monthly.

The rate increase, which was created to offset operating costs in the water department and to pay off repair bonds, came at a time when hundreds of the city’s account holders owed nearly $1 million in unpaid water bills.

Further hampering the issue, the city’s water department, which operates with payments made by consumers through a revolving fund, hadn’t enforced water shutoffs in nearly three years, until the NBC 10 I-Team started asking questions.

Top offenders

In May, the NBC 10 I-Team uncovered that more than 630 accounts – some connecting back to politicians and local business owners — were more than a year delinquent with the biggest offender owing approximately $65,000.

Two others owed $23,000; 17 payees owed between $4,000 and $10,000; and dozens more – including one city councilor – had owed the city more than $1,000.

The I-Team uncovered that Agawam owed the city nearly $65,000 for water use at a number of its properties.

The city, however, will not be able to recoup any of the money, according to East Providence Deputy Treasurer Betty Rynda because Agawam is under Chapter 11 Bankruptcy protection.

Court documents show the same with Pinelli’s Realty Inc., which owed the city $22,797 in water and sewer service fees from B Pinelli’s, a restaurant at 736 N Broadway, formerly operated by William “Bill” Pinelli. The restaurant closed abruptly in July. The city will now receive a $100,000 check from Pinelli, half for water and the other half for taxes.

So what happens to the bills?

“It doesn’t go away,” Rynda said. “And we cannot turn off the water and we cannot take harmful action.”

Atypical tax sale

The situation isn’t any better with the $23,000 water bill for Odd Fellows Hall, a former social hall at 63 Warren Ave. In that instance, it appears the city owes itself.

The former owner, Marc Perlman, appears to owe $9,000 in water/sewer bills and another $13,000 in penalties, according to tax documents obtained by the NBC 10 I-Team.

“That was the balance before it was taken by the city by tax sale,” Rynda told the NBC 10 I-Team.

The tax sale was atypical because it’s usually an unbuildable piece of land that is taken by the city in a tax sale, according to Rynda.

At one point, there was a plan to redevelop the property, she added. The old Victorian is in a state of disrepair and significant rehabilitation of the building is necessary.

The city’s waterfront commission hired a consultant that determined it would cost nearly $500,000 to remove debris and make repairs. That was 2014.

“I’m not sure what the resolution would be with that situation,” Rynda said. “Technically the city owes itself.”

Outspoken and delinquent councilman

Ward 4 Councilman Brian Faria – the one city councilor who voted against the water rate increase – owed the city nearly $2,000 in an unpaid water bill, but paid a portion of the bill after the NBC 10 I-Team reached out to him for comment on the city’s long list of delinquent water bills. Faria’s circumstance was a little different, according to the city’s tax collector who said Faria’s home qualified to go to tax sale but didn’t.

In one interview, Rynda said the city “never used to put properties up for tax sale for water bills,” but said that changed. “If you owe me from 2015 you are going to tax sale.”

In fact, Rynda said the city “took a bunch of properties to tax sale because of the water bill.”

In a subsequent interview regarding Faria’s bill, Rynda said, “We don’t have a formal agreement procedure on the tax side, it’s at my discretion to make the best agreement for the city.”

When asked what made the councilman’s circumstance different, Rynda said: “Before we started on tax sale he made an agreement to make payments to come off tax sale.”

Rynda said the councilman paid off some of the bill, but multiple sources tell the NBC 10 I-Team that Faria has not stuck to the payment agreement. As of August 9, Faria was still delinquent with his water bill owing $773, according to the city. His water remains on.

NBC 10 I-Team Reporter Parker Gavigan caught up with Faria who said he has faced a hardship.

“During that timeframe you are referring to, I had a near fatal car accident, 10 subsequent hospitalizations and surgeries so we went through a very difficult time,” Faria said.

Behind on the bills

The top five customers behind on paying their water bills are: Bourne Ave Realty, which owed $18,000 for water and sewer services at 253 Bourne Ave.; A homeowner on Cushman Avenue, who owed nearly $16,000 in service and penalty fees; and Pure Life Realty, which owed $14,000 in fees for 10 Coyle Ave.

John Longo, manager at Pure Life Realty, said the company does not intend to pay off the water bill because the bill was from the previous owners. Pure Life Realty acquired the property after the city boarded it up and the mortgage went into default, according to Longo.

“The intent was to work something out with the bank and get it back on the tax rolls, but four weeks after Pure Life acquired it, we got a foreclosure notice so we stopped,” he said.

The bank then cancelled the foreclosure sale.

“It’s vacant, it’s boarded up and it’s a bad investment for Pure Life,” he added. “When the bank forecloses, they will resell the property to someone else and to clear the title, they’ll have to clear up the taxes and water bill and eventually the city will be made whole with the bill and interest.”

The property will likely go into tax sale, according to the city’s tax collector. As for the homeowner who owes $16,000, her water was turned off on August 1, according to the city.

The homeowner on Cushman Avenue told the I-Team she suspects something is wrong at their house with either piping or the meter.

“There is a problem,” she said, pointing to her massive June/July bill of $976. “Nobody from the city has come to check the meter. I called the Water Department, but they didn’t seem to care, told me it was my problem,” she said.

The city’s tax collector said monitoring of the account shows an uptick of water use in the summer months, likely due to a leak in the sprinkler system or the sprinkler systems’ timer.

The collector went on to say that the city has made payment agreements with the homeowner in the past, but that the homeowner broke the previous payment arrangement and therefore is no longer eligible for another repayment plan.

The account, and other accounts that have been shut off, continue to be closely monitored, according to Rynda.

Attempt to collect

With nearly $1 million in outstanding water bills due to the city, how does the city collect what’s owed?

There’s a process that includes reminders, arrangements, shut off warnings and eventually turning off service to a property, but it’s been nearly three years since the process has been fully enforced, per the tax collector.

Once a year the city’s tax department runs an internal delinquent list with all past due bills and the water department then goes out and tags all those properties with a shutoff notices. Those who owe the highest amounts are tagged first.

“That sends people into a tizzy and the come in and pay or ask for a payment arrangement,” Rynda said.

But, it’s been nearly three years since the water shutoffs have been enforced, the NBC 10 I-Team has learned.

“The last time we did shut off was 2014 but, we try to do it every year,” Rynda said. “We are supposed to do shutoffs this summer.”

Water Superintendent Emerson “Jim” Marvel deferred any questions to Public Works Director Steve Coutu and City Manager Tim Chapman.

Chapman told the I-Team he was aware of the delinquent accounts and drafted a policy change that was brought before the City Council.

“Except for annual tax sales (delinquent water is included), I was not satisfied with the city’s lack of collection of delinquent accounts and enforcement of water shut offs,” Chapman said.

“We maintained that since there were a large number of customers that were delinquent on their accounts that water shut offs would commence in July 2017,” Chapman said. “Those dates would allow customers to be prepared for monthly billing and allow them time to become current.”

The NBC 10 I-Team checked back with the city and as of August 1, the city began shutting off water to those refusing to pay up and has collected approximately $250,000 in delinquent bills. As of August 9, 55 accounts have paid in full, 45 accounts are under payment plans and approximately 15 have been shut off with some account holders continuing daily to pay in full or enter payment plans.

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