Tuesday, May 19, 2009

Delinquent Utility Bills In Sacramento County

Following up on Saturday's post, I was able to gather a list of direct levy amounts assessed against residential and commercial property in Sacramento County, including delinquent utility bills. As I suspected, there have been substantial increases over the last two years:


The dollar amount majority of the delinquencies fall under two assessments: Sacramento City services (water/sewer/trash), and County Sanitation District 1 delinquent sewer, which made up 73% of the total in FY 2008/2009:


Some notes: These data represent assessments, not payments, and it is unclear from the data if levies that aren't paid in one year are rolled over to the next, or if each year is accounted for separately. Therefore, the increases could represent multiple years of delinquency on a single property rather than an increase in the number of delinquent properties.

Also, they provide no success rate on collections, so it's difficult to gauge the long term fiscal impact of these delinquencies. For example, CSD-1 collected a little over $67.2 million in sewer service fees in FY 2007/2008, so (assuming a one year delay on filing a levy request with the county), the $9.45 million in delinquent payments to CSD-1 represents a 12.3% delinquency rate! Obviously the near-term budget impact is extreme, but the effects would moderate if the assessments were ultimately successful. In the case of foreclosed houses, the banks are probably paying these off in order to move the properties, so the soon-to-be-foreclosed owner is getting free city utilities while they await eviction.

I am following up with the Secured Property Tax Unit on these questions, but if anyone can enlighten us, please leave a comment.

**Update**

The Secured Property Tax Unit got back to me with the following:

Max: Are DLs that aren't paid rolled over to the following year's assessment, or is each year accounted for separately?

SPTU: Direct Levies are not rolled over from one year to another. Each year is accounted for separately.

Max: Can you estimate roughly as to how delinquent these utility are before they're referred to you guys? I'm just trying to characterize the data in general terms (eg does a direct levy for a water bill assessed in FY 2008/2009 represent a delinquency that took place around 2007/2008? Or is it much earlier?)

SPTU: The delinquent Utilities must be "delinquent" and they must have a lien recorded on them prior to referral to the County. Each Utility Billing Office has their own schedule and timelines for "how" delinquent a utility charge must be before they record a lien and when it is available to refer to the County. The charges may be much older, we are not informed of the time period the delinquent charges cover.
So there you have it. Each year is accounted for separately, and the numbers represent new delinquencies reported to the county during the beginning of the fiscal year. SPTU also pointed me at some collection rate date, which I will publish soon.

6 comments :

Anonymous said...

Does remind me of a prank call we used to make as kids but sanitation is the one utility that can't cut you off if you don't pay.

"Excuse me ‘mam, this is Mr. Smith from the County Sanitation Department and we have discovered that you are seriously delinquent in paying your sewer bill so we are sending a truck of your s*** back to you. Thank you and have a nice day."

Sippn

Max said...

Yep, nobody wants the trash to pile up. Looking at the collection rate data, it looks pretty high, so impact on the utilities is probably minimal. The takeaway is that here is another cost of foreclosure being borne by the banks and exacerbated by the moratoriums.

Husmanen said...

I pull tax data on about 100 homes in very specific areas of Folsom I am looking at. I then hone down to those that have not paid their taxes in Dec 2008 and Apr 2009.

The last time I did this, April 2009, I did not see any utility delinquencies, but then again I was not paying that much attention to each line item. I will have to revisit this, very interesting.

Darth Toll said...

@sippn lol!

Getting back to a discussion DJ and anony were having a few posts back - it could be that the foreclosure moratorium caused a lower level of foreclosures during said moratorium and a higher (more normal) one after. I guess you can manipulate the market for a while, but at some point reality returns, and it seems like TPTB have decided that now would be better than before.

Max said...

I guess you can manipulate the market for a while, but at some point reality returns, and it seems like TPTB have decided that now would be better than before.The reality is, many of these guys can't even make 50% of their monthly payments, let alone the whole thing. The moratoriums only serve to delay the inevitable.

Another angle I heard during a story on "This American Life": many of the loan servicers are banks that made HELOCs on the houses they service the primary on, even though they don't actually own the primary. If they perform their fiduciary duty as servicer, they destroy the notional value of their own HELOC portfolio!

Clusterfuck doesn't even come close to describing this situation.

patient renter said...

Max - Which TAL episode was that? Last weekend? (usually stream them during the week, but haven't listened in a few weeks).