Delinquent city utility bills to be placed as liens on properties

CHEBOYGAN — City water and sewer utility customers who are six months delinquent on their payments will have those bills placed as liens on the properties for the 2022 summer tax roll.

"These are our delinquent utility billing accounts, just for city residents," said Cheboygan City Treasurer Bridget Brown. "This does not include our Inverness customers."

Beginning in March, Cheboygan City Utility Billing Clerk Sarah Swanberg and Brown worked together to generate a list of any city utility customers who had past due balances on their accounts, as of Sept. 1, 2021.

"That would make it six months past due as of March 1," said Brown.

Swanberg sent out two different rounds of letters to the utility customers with past due accounts, letting them know about the issue with the account. The letters also explained the process of what would happen with the past due amount, placing them on the tax rolls as liens, if the accounts were not made whole.

By placing the six month delinquent utility bills on the tax rolls for the summer of 2022, it will make sure the city is still able to collect the amounts that are due from the different utility customers.

Brown said there have already been some adjustments made to the amounts of liens being placed on the tax rolls, as people have been paying some of their back bills. She had until the amount was certified by the Cheboygan City Council members on June 14 to make any adjustments before the back bills were to be placed as liens.

"Then we turn these over to the county and these will go on the summer 2022 tax bills, as a lien on their taxes," said Brown.

More:City council approves placing delinquent utility bills on tax rolls

The total amount of back utility bills owed to the City of Cheboygan is $73,327.76. This total comes from 122 different city utility customers, some of which owe more than $2,000 in back utilities, and some of which owe less than $20. However, these amounts were more than six months past due and were turned over to the county.

Councilman Ken Kwiatkowski asked if this amount was a significant decrease in the amount traditionally placed on the tax bills due to nonpayment.

"I looked. So, this year we started at about $108,000, which is kind of normal, maybe a little bit on the higher end. But where we ended at that $73,000 is pretty much in range with where we would normally fall," said Brown. "We've had years as low as $63,000, since I've been here — should clarify that — but we've also had years that were upwards of $80,000. So yeah, we're pretty much in range with what we would expect to see."

Brown said each spring, these delinquent amounts are essentially bought out by Cheboygan County.

More:City to place delinquent water and sewer bills on tax rolls

"So when we have these delinquent tax amounts, we get made whole on these at tax settlement, regardless of whether or not those taxes have been paid," she said. "The county then proceeds to try to collect those amounts that are due."

If the county is unable to collect the amount that is due on a property from these liens, after three years, the property will then be foreclosed upon and be put up for auction in the county's tax sale.

"So the county essentially ends up with those properties back," said Brown. "So, yes, the city does get made whole. I think we've had one occasion where we weren't made whole because the taxing amount was so high that they were concerned they weren't going to get enough on the property to cover that. So, we had to make some adjustments in that case."

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In the event there is a tax exempt property — such as a church — that property owner would still have to pay these back amounts because it is a tax lien due to delinquent utility bills. The utility bills are not subject to a tax exemption.

Contact Reporter Kortny Hahn at khahn1@gannett.com. Follow her on Twitter at @khahnCDT.