Altoona Water Authority considers forgiving water liens on blighted property
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A city Redevelopment Authority representative on Thursday asked the board of the Altoona Water Authority to forgive an outstanding water bill for a derelict Maple Avenue property that the Redevelopment Authority wants to renovate as part of the RA's ongoing blight intervention initiative.
The RA wants the Maple Avenue case to set a precedent for an intermunicipal agreement that would allow for automatic forgiveness of water liens in the future -- an agreement similar to longstanding agreements under which the city, the county and the school district forgive tax liens on RA properties.
Water Authority officials said they'd consider the request, although they cited concerns.
The big brick building on Maple Avenue that once contained a corner store and apartments has a $9,500 water lien, according to Eric Luchansky, the city's community development director.
Due to the other intermunicipal agreements having been executed, the tax liens on the property are gone, Luchansky told the Water Authority board.
The RA would like to get the liens on that and other similar properties to zero, so that it can convey such properties free and clear to developers for rehabilitation, Luchansky said.
The RA came into possession of the Maple Avenue property in June, after the city's Blighted Property Review Committee declared it blighted, but capable of being saved.
It had been owned by the late businessman Lou Grillo, whose daughter donated it to the RA, Luchansky said.
A year ago, if such a building came before city agencies, it probably would have been demolished, Luchansky said.
"It's in very, very poor condition," Luchansky said.
The Water Authority will benefit from potentially five new residential customers if the RA succeeds in its plan with the building, Luchansky pointed out.
"We're asking for relief and also asking as we move forward (for the Water Authority) to have a partnership with the Redevelopment Authority," Luchansky said.
Water Authority board member Jack Speece asked authority solicitor Dave Gaines whether forgiving the Maple Avenue bill would "set a precedent."
"Sure," Gaines said. "We need to think about that."
The RA, however, is in a different category than other potential entities that might ask for debt forgiveness, Gaines added.
In considering whether to forgive the Maple Avenue bill, the board also needs to consider whether doing so would trigger a requirement for the Water Authority to pay a commission to Portnoff Law Associates of King of Prussia, which functions as the authority's collection agency, Gaines said -- likening that potential obligation to one in which a homeowner engages a real estate agency to sell his house, then finds a buyer himself.
Luchansky's proposal triggered a discussion among Water Authority officials about the reason customers sometimes accumulate large unpaid balances.
It generally occurs only with rental properties like the one on Maple Avenue, because the authority's policy in recent years is to hold landlords strictly accountable for water bills -- and because state law limits the ability of water providers to shut off service to tenants who are essentially innocent parties, according to Billing Director Jim Houck.
The authority used to handle accounts for individual tenants in multi-tenant properties, but that led to complications, Houck said.
It proved to be simpler to deal with landlords only, he said.
But in doing so, the authority closed off an option available under the Pennsylvania Utility Service Tenants' Rights Act to accept money from individual tenants in properties owned by deadbeat landlords -- a situation that would allow the authority to shut off tenants who declined to pay under those circumstances, according to officials at the meeting.
When a tenant pays his bill to keep the water flowing to his apartment in a building whose landlord is delinquent, the tenant can deduct that payment from his rent, according to an online source.
Mirror Staff Writer William Kibler is at 814-949-7038.