Getting Hosed: Unmetered, Vacant Homes Rack Up Thousands Of Dollars In Water Bills

CHICAGO (CBS) -- They're not using any Chicago water, but they're getting bills for thousands of dollars.

For months, CBS 2 Investigator Brad Edwards has been chasing the Chicago Department of Water Management, looking for answers for people who say they are drowning in water bills.

Larry Richardson owes the City of Chicago $17,712 for water at his boarded-up, disconnected, family-entrusted home.

"No water running. No fixtures inside. The pipes are not even connected," he says.

Richardson is one of the people who called CBS 2 Investigators after the first exposé on the city's water billing system aired in February. Some owed hundreds of dollars, others tens of thousands.

Jerelyn Evans' $10,926.41 bill is preventing her from selling her vacant house.

"They're holding you hostage," she says.

Pastor Darryl Hickman owed $9,212.22 before CBS got involved. His family home lay dormant for seven years before he received that bill. After one phone call from the CBS 2 Investigators, Hickman's bill was lowered to $2,012.19.

"It should not take an investigative reporter to make the numbers right," Hickman says.

Richardson, Evans and Hickman all have non-metered accounts, meaning they do not get charged for the amount of water used. Instead, they're charged an assessed amount calculated with a complex formula involving home size, the number of water fixtures and the number of apartment units.

Joel Flores, managing deputy director of the Department of Finance, and Julie Hernandez-Tomlin, first deputy commissioner of the Chicago Department of Water Management, granted CBS 2 Investigator Brad Edwards 30 minutes for an interview about water billing. They walked out about 10 minutes early.

"So a non-metered account, you will bill them and continue to bill them for thousands of dollars for years if they're not using any water?" asks Edwards.

"They have to pay their bills," Flores responds.

[Do you have an outrageous water bill from the city? Email Brad Edwards.]

Listen To The Calls CBS 2 Received About Huge Water Bills

The only way to turn billing off for a non-metered account is to declare a property vacant with the Department of Buildings. This costs $300-$600 for the initial registration, then $300 to renew that status every six months. If the vacancy status lapses because a property owner forgot to renew, the water billing starts up again.

Over the past decade, Chicago water rates have tripled to pay for new water lines and to bolster pensions.

Right now, the city is owed $447,266,802.81 in outstanding water bills. There are 26,729 accounts eligible for collection, meaning their balance is over $500. Eight law firms have collected $219,816,305.86 in debt for outstanding water bills in the last 10 years. At their 25% collection rate, Chicago has paid nearly $55 million to lawyers to collect water debts since 2010.

Kerry Kohn is in collection for $58,733.27 for water he never used. The Kohns thought they found a buyer for their family laundry business in 2013. They filed a full payment certificate to transfer utility bills in late 2013. The tenant didn't buy but rented, and the Kohns never rescinded the full payment certificate.

Unbeknown to the Kohns, the tenant never paid his water bill. Early into the lease in 2014, when the tenant fell $6,200 behind on his bill the Water Department sent a worker to shut off water to the property.

The worker went out, but couldn't find the shut-off mechanism, known as a buffalo box. He noted the property appeared vacant, despite the property using copious amounts of water.

"It's not a flaw," says Hernandez-Tomlin. "The vacancy note on the account had nothing to do with them using their water."

Four years later another worker located the buffalo box in a matter of minutes.

"I can't speculate why it was not found. It was the winter, there may have been snow on the ground. I don't know," Hernandez-Tomlin says.

Fifty-two thousand dollars later, the Kohns are on the hook for the city's error.

"It's not an error on the Department of Water," says Hernandez-Tomlin. "It has nothing to do with the billing."

The Kohns' alderman, Anthony Beale (9th), thinks the Kohns are not the only ones who made mistakes.

Beale says the city "absolutely" bears some of the blame.

"I'm working with them to get some relief from the city, but at the same time the person that they rented the property to, that shafted them," Beale says.

Beale believes the city should go after the person who used the water, the bad tenant.

As for the nearly $60,000 bill, Beale calls that "extremely excessive."

Meanwhile, the Kohns are trying to give their property away to a non-profit, Wonder World Social Services. The property cannot change hands while it's burdened with a five-digit water bill.

Tasha Weathersby runs that non-profit.

"We could use this building to build up Roseland!" Weathersby says, "I have been praying and praying that the city wipes this bill clean."

The city isn't taking prayer requests. They answer only to the Municipal Code, which states that landlords are responsible for the water bill.

Tareq Khan's tenant is $8,000 behind on his water bill.

"They know that the water bill is attached to the landlord, so they don't pay. There's no action being initiated against them," says Khan.

The city is refusing to shut off the water to his property.

"I think that's why the city doesn't come shut it off, because they know that their money is secure," says Khan.

CBS 2 Investigators showed up at Khan's property, a laundromat that boasts, "Under New Management."

Ten minutes after asking employees to have the boss call us, the tenant called and promised to pay his bill.

The Kohns have not been so lucky.

Inside the business that supported his family for decades, Kohn says, "It breaks my heart to come here."

Even worse for the Kohns is the knowledge that while their tenant was racking up the water bill that is still haunting them, the city paid that same tenant $504,627.71 in contracts. During that time, the tenant was not only not paying his water bill, but his business license expired. The city continued to pay him for laundry services.

"When we enter into a contract with one of our contractors for goods and services and those goods and services are provided, we are going to pay our bills," says Flores.

"Doesn't matter that they're not paying theirs," Edwards responds.

"We issue over 100,000 checks a year. It is extremely burdensome for us to determine if there's any outstanding water bills or any other outstanding debt," Flores says.

"And you also kept cutting checks to this gentleman despite the fact that he didn't have a license. Is that a problem?" asks Edwards.

After pausing, Flores responds, "It is impossible for us to review each and every single check that is cut to determine if someone has an active license or to determine if someone has outstanding debt."

"The issues here are between the landlord and the tenant," Flores continues.

But Larry Richardson has no tenant. He has a property that was disconnected from the city's water system in 2012.

After CBS Investigators inquired about his bill, the Department of Finance found that documented water service disconnection. They adjusted his bill from $17,712 to $511. Richardson is saving $17,201.

"Channel 2 just saved me [$17,000] on my water bill," says Richardson. "It takes calling Channel 2 for something to happen."

For landlords with bad tenants, the city actually suggests they hire a plumber to turn off the water, but a tenant could just hire another plumber to turn it back on.

As for the Kohns, the city has agreed to cut the fees from their bill to about $42,000, if they pay in the next 30 days. Their former tenant is now running another laundromat in Evanston, where the city shuts off water service if you haven't paid your bill in 90 days, no exceptions.

CBS 2 isn't naming the Kohns' tenant, because the City of Chicago doesn't care that he didn't pay for the water he used.

In:
• CBS 2 Investigators