Harrisburg leaders debate hiking trash rates, going after garbage scofflaws - PennLive

Harrisburg leaders debate hiking trash rates, going after garbage scofflaws - pennlive.com

With a 10% increase in residential trash rates on the table for the coming budget year, Harrisburg’s city leadership has diverging opinions on how to recoup the millions of dollars in unpaid garbage fees the city already has outstanding.

The issue is the latest in a series of hurdles Harrisburg faces as it tries to right its finances using a limited base of revenue, with everyone involved in the trash fee debate acknowledging a great deal of uncertainty about who can — or will — shoulder the burden.

But increasing the base trash rate by $3.23 per month before doing everything possible to collect past-due balances — estimated to be about $12.2 million across thousands of accounts — is a bad idea both financially and politically, city Treasurer Dan Miller told reporters on Monday.

“The crux of this, what I’m upset about, is that the people who have been paying all these years, they’ve been paying, and we going to do? We’re going to increase their rate 10%,” said Miller, the city’s elected financial administrator who previously served on city council.

“The people who haven’t been paying, what’s the consequence? There’s no consequence, they’re still going to have their trash collected,” Miller continued. “Let’s do our job, let’s enforce the laws that we do have and go back and collect that $12 million.”

Miller is pushing the city council to begin including the city’s trash fees with its real estate tax bills, which he believes will make residents and businesses less likely to ignore the invoices – particularly if these trash balances were included in the unpaid property tax bills the city turns over to Dauphin County for collection, given that the county has the leverage of taking properties to sheriff’s sale for failure to pay.

Miller is further recommending that the city flex its ability to force landlords to make back payments as a condition of renewing their rental permits – something which the city has the statutory authority to do, but which is not currently enforced when it comes to delinquent trash fees.

But Mayor Wanda Williams’ administration is looking for a different approach, with the main issue being that Williams would rather do hard enforcement in-house.

The city solicitor’s office increased its staffing earlier this year with the aim of placing liens against or reaching settlements with delinquent property owners, according to the administration; from May through the end of this year, the office will have recouped over $1 million in late trash fees.

“It’s a work in progress, it’s something that the law bureau is working on right now,” said Dan Hartman, the city’s business administrator under Williams.

Although the city has enforced other aspects of the rental licensing program — such as fire safety and other property standards — it has thus far declined to threaten landlords’ permits solely because of back trash fees, Hartman said, for fear of collateral damage.

“We do not want to do that for risk of what could happen on the downstream,” Hartman said, particularly if landlords raise rents or shut down low-cash-flow properties altogether, which would stand to exacerbate the city’s already significant housing market problems.
Mayor Wanda Williams' administration says that the trash fee has not been increased in many years and a hike is needed to deal with increased operating costs. Jimmie Brown Jr. | jbrown@pennlive.com

Regardless of whose approach – Miller’s or Williams’ – one favors with regard to collecting back fees, the fact remains that Harrisburg struggles to recoup the cost of the services it provides, and it is unclear what return on investment there is to be had.

Although commonly called a trash fee, the fee at issue is a “neighborhood services” charge that is meant to support other sanitation operations as well, such as cleaning up parks. The city also bills outlying boroughs to which it provides sanitation services, including Steelton, Penbrook, and Paxtang.

The fees are the result of debt-strapped Harrisburg’s financial restructuring, which in 2014 saw the city transfer its water and sewer operations to a new joint municipal authority, Capital Region Water — which also assumed most of the city’s collections department, limiting the ability of the city to do its own billing enforcement, Miller said.

Further, the 2014 reconfiguration resulted in a legal challenge to the way the city was billing commercial accounts for trash — a court battle that is still ongoing and prevents the city from changing trash rates on businesses, Hartman said.

All told, the fee brought in about $15.6 million last year, with a residential rate of $32.34 per month, which would rise to $35.57 next year under the city’s proposed budget. The rate has not been increased in many years, according to the Williams administration, and a hike is needed to deal with increased operating costs.

Disposal fees at the incinerator used by the city shot up nearly 8% this year alone, Hartman said — and the fees charged to the city are already more than double that charged to other municipalities as a result of the legal battle over mismanagement of the formerly city-owned incinerator.

The exact makeup of the city’s delinquent accounts is not entirely clear. About 90% of trash bills are paid on time, within a month of going out, according to the city. But the occasional missed bill adds up, and 5,966 of the city’s 14,420 residential trash accounts have some delinquent bills outstanding.

Of the $12.2 million unpaid total, about two-thirds of the dollar value is residential trash, with the vast majority of that — $7.2 million — being held by only 2,118 residential accounts, according to city data. Miller said that, in his own analysis, roughly 70% of these chronically delinquent accounts had a billing address different than the property address, leading him to believe that the culprits are primarily landlords who likely are able to pay but who know that there aren’t consequences for not doing so.

“I think people just realized they didn’t have to pay the bill so they didn’t do it,” Miller said. “The majority our our delinquent accounts are landlords” and not lower-income residents, he added, questioning why the city believes it is likely to get more money by increasing the rate on those who already dutifully pay their trash fee, as opposed to being more aggressive in going after those who don’t pay but likely have the means to.

A 10% residential fee hike would nominally bring in an extra $559,000, but the city has acknowledged there is a margin of diminishing returns as higher fees become more unaffordable for residents; the city’s finance department has budgeted collecting only 83% of the trash fee increase next year.

But the city’s sanitation services run a structural deficit, Hartman said, pulling roughly $1.5 million from reserves last year to make ends meet, and the issues raised by Miller don’t change this. Even if the city is able to recoup the lion’s share of the $12.2 million owed, it would only kick the can down the road as costs continue to rise, Hartman said.

“You’re never going to be able to use that debt to deal with a growing structural deficit,” Hartman said. “Everything is its own puzzle piece, but you can’t address a structural deficit with one-time money.”

Harrisburg City Council is scheduled to vote on the city’s 2024 budget at Tuesday night’s meeting.