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City finds ways to collect on unpaid sewer bills

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A property tax bill with a lien because of bill unpaid sewer bills. Scott Roberson / Daily Journal
A property tax bill with a lien because of bill unpaid sewer bills. Scott Roberson / Daily Journal

A property tax bill with a lien because of bill unpaid sewer bills. Scott Roberson / Daily Journal
A property tax bill with a lien because of bill unpaid sewer bills. Scott Roberson / Daily Journal

Every year, hundreds of residents and business owners don’t pay for the service that keeps their toilets flushing and sinks draining.

Last year in Greenwood, the city didn’t collect more than $600,000 from property owners who didn’t pay their sewer bills.

But this year, the city is finding ways to force businesses and residents to pay for the utility service they can’t shut off. For those who don’t pay, they continue to face hefty fines and a lien on their property that has to be paid before they can sell.

New this year, the city plans to stop trash pickup and work with the water company to get water turned off at properties where the sewer bills aren’t paid with a goal of finally collecting on those bills.

Johnson County cities and towns filed nearly 900 sewer liens totaling more than $200,000 in 2012, and Greenwood plans to file more than that by itself this year.

Last year, Greenwood hired a new, full-time attorney with the goal for her to spend half her time filing liens. Liens are legal holds that can be placed against a property so a city or town can collect unpaid bills. If the property sells, then the sewer and tax bills are paid first out of the proceeds, even before the mortgage lender.

To double the number of liens filed by the city, from 800 to up to 1,600 this year, the city finance office also hired two part-time secretaries this spring. Their task: to answer the phone and answer questions at the front desk so the billing clerks can work more on starting the lien process.

The city is working to catch up after falling behind on collecting fees from residents who weren’t paying. This month alone, the city had more than $500,000 in trash and sewer fees that were 120 days past due.

Greenwood hired Indiana American Water to handle its utility billing in 2011 so residents would receive only one bill for water, sewer and trash service. Then, in late 2012, Indiana American Water stopped offering utility billing services to other organizations.

Greenwood got the billing job back and also inherited a backlog of past due bills, city attorney Krista Taggart said. Franklin isn’t having to deal with the same backlog because the city has always handled its own sewer billing, Franklin billing manager Sherry Phillips said.

Greenwood has about 24,000 properties that get sewer service from the city, and about 18 percent of them aren’t up-to-date on their sewer payments, controller Adam Stone said.

Indiana American Water had more power up front than the city does to collect bills, because the company could shut off a resident’s or business’s water if they didn’t pay, Taggart said.

The city can’t stop sewer service, so it plans to stop trash pickup this year to residents who don’t pay, she said. Businesses don’t get city trash service.

The city also wants to work out an agreement with the water company, so water can be turned off if sewer bills aren’t paid, Taggart said.

Before a resident or business owner will face having service cut off or liens on their property, they will first get notices on their sewer bills every month until the city chooses to file a lien. The city files liens after bills are unpaid for 120 days or longer. A charge of 10 percent of the bill is added each month it isn’t paid. The city legal office then sends a warning letter before a lien is filed.

The legal office filed 800 sewer liens in 2013, and Taggart wants to double the number filed this year with the help of the new staff members, she said. The city will likely file about 1,200 liens by the end of the year, she said.

About every two weeks, the city is dedicating a day for its four billing staffers to look over unpaid sewer bills and send 80 to 120 to the legal office so liens can be filed. The city filed $50,000 in liens from the work of a recent lien day, she said.

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