Sunday, December 21, 2014

PHA suffering from a bad case of gas

THE PHILADELPHIA Housing Authority and Philadelphia Gas Works are duking it out over hundreds of thousands of dollars PGW says it's owed. But no matter who emerges victorious, the public will pay.

PHA suffering from a bad case of gas

THE PHILADELPHIA Housing Authority and Philadelphia Gas Works are duking it out over hundreds of thousands of dollars PGW says it's owed. But no matter who emerges victorious, the public will pay.

PGW says that former PHA tenants owe nearly $350,000 dating from the 1990s - and that PHA is responsible. PHA says the quarrel is between the utility and the tenants who never paid.

Meanwhile, the $350,000 debt may be just the beginning.

The dispute began last winter, when PHA auctioned off almost 400 of its 4,000 vacant single-unit houses. The auctions were going well (nearly every unit sold), but when PHA sat down to do the final paperwork, it found $350,000 in PGW liens on 75 of the homes.

The authority was stunned. Months before the sale, it had done a title search on all the properties approved for auction and found only $35,000 in PGW liens. PGW had slapped more liens on at the last minute.

PGW spokesman Barry O'Sullivan explained that when PGW saw the PHA properties for auction, it scrambled to file the liens because the property sales would be the "last, best chance" to recover the money.

PHA tenants, past and present, owe PGW at least $5 million, O'Sullivan said. And that's just since 2006.

O'Sullivan said a 1923 state act makes property owners, not renters, legally responsible for the cost of a municipal service. He also defended PGW's actions by saying that it benefits ratepayers, whose gas rates rise when bills go unpaid.

But PHA's money comes from the public, too. And PHA doesn't think it should have to pay these bills. The agency says it did its part by giving tenants a monthly "utility allowance" rent deduction, as required by federal regulations.

Unfortunately, the agency never made sure tenants paid their utility bills.

Even after PHA found out many of its tenants weren't paying, it didn't start cracking down. As early as 2005, PGW told PHA that half of its tenants were delinquent on gas bills, according to the executive director of the Philadelphia Gas Commission, Janet Parrish, who attended meetings between the agencies as a neutral third party. PHA couldn't confirm the number of delinquencies.

Spokeswoman Nichole Tillman said that PHA's current leadership did not know that tenant debts were such a problem before PGW placed the liens, although some of the debts go back decades. Because the debts are so old, it will be hard for PHA to recoup any of the costs from former tenants, she said, adding that PHA does not have records of PGW trying to get into properties to shut the gas off.

PHA put payments for the liens in escrow so it could move forward with the sales, which the auction company, Max Spann Real Estate & Auction Co., expects will raise about $11 million. But before it agrees to pay the debts, the housing agency wants to make sure PGW has taken all possible steps to collect the money owed from tenants.

O'Sullivan says the properties already have gone through the normal collection process.

The two agencies plan to meet Tuesday to hash things out. Regardless of what's decided, PHA intends to enter into PGW's landlord-cooperation program, Tillman said, to better work with the utility and to protect itself from future liens.

This story originally appeared in the Daily News.

About this blog
Every year, city government spends slightly more than $4 billion. Where does all that money come from? More importantly, where does it go? Are we getting the most bang for our tax buck? “It's Our Money” is a joint project between Philadelphia Daily News and WHYY, funded by the William Penn Foundation, designed to answer these questions.

It's Our Money contributors

Tips? Comments? Questions?
Contact:

Holly Otterbein:
215-854-5809
hm.otterbein@gmail.com
@hollyotterbein

It's Our Money
Also on Philly.com
Stay Connected