With the city of Demorest’s metaphorical wallet narrowed by nearly $1 million due to delinquent tax/water bills, city personnel are again pursuing payment on as many unpaid accounts as it can.
At the Demorest City Council’s regular work session March 25, Mayor Rick Austin provided council members a spreadsheet of outstanding tax/water bills – including $222,553.37 still unaccounted for in its Fiscal Year 2012 audit – which suggested nearly $750,000 in owed funds not yet collected.
Austin noted one client in particular owed more than $385,000 in outstanding water debt, dating back to 2010. Past due water bills owed by remaining clients amount to $27,317.91, he noted.
City Manager/Clerk Juanita Crumley assured mayor and council she and new City Attorney Joseph A. Homans were in the process of initiating collection efforts.
An Open Records request issued to Austin, Crumley and Homans March 28 for copies of delinquent tax/water bills more than $1,000 and 30 days past due illustrate Demorest-based Sweetgrass Partners LLC, developers of Sweetgrass subdivision off Double Bridge Road, owe approximately $351,725.43. Crumley said April 2 the balance had since increased to $386,897.97.
However, Crumley clarified the majority of the overdue balance is late fees accrued from nonpayment on a one-time bill of $10,000, issued in November 2010 for “sprinkler usage.”
“It’s from a $10,000 water bill billed out one time … it has just generated over the last three years,” since 2010, she confirmed.
Crumley said unpaid water bills accrue fees of 10 percent monthly.
When asked if any percentage of delinquent fees had been accrued through water usage by subdivision residents, Crumley replied, “No, not at all,” just the sprinkler system.
“Some of the [public works] guys just happened up on the sprinkler system; we don’t know how long the usage was [or] if it was put in by contractors,” she said.
But with the meter being fixed in a recently-established neighborhood, Crumley said the meter reading could have only been generated by usage within the subdivision.
“That was the only meter reading that had ever been on it … because it was in the subdivision and it was a new subdivision,” she said. “We just happened on the meter and this is the usage on the meter we billed them for.”
Crumley reiterated there was no way to cut water off to the subdivision because the city didn’t know the meter existed. She said it’s the city’s belief the contractor installed the meter, not city employees.
“We don’t think the city put that meter in because when a subdivision is built, a lot of times the contractors set the meter boxes then they come in and pay for the meters,” she said, under the honor system. “As far back as we can remember, we did not put that meter in the box.”
But since discovering the meter in November 2010, Crumley said, “We’ve billed them from day one for the water [usage].” No usage has accumulated since this date, she added.
However, the city has yet to receive a cent toward the outstanding balance owed by the account holder, Sweetgrass Partners.
Crumley said based on city records, water bills have been addressed to Sweetgrass Partners LLC and mailed to a P.O. Box in Clarkesville, but to whom exactly, she doesn’t know.
“I do not,” she said. I do know, “when they get a bill every month, the bills are not returned to us (city). Their name is not on [the account].”
Crumley said the city has yet to receive any response from the account holder, nor payment as a result.
When asked if the city had reviewed the original application for water service – which would likely require both a company name and or/applicant name – for other contacts, Crumley replied, “We haven’t.”
“I’m almost positive we would still have that [application],” but “it’s a pretty known thing who it is,” she said – Carol and Virgil Lovell. “It doesn’t say Lovell on the bill, but it’s a [well]-known thing that it’s the Lovells’ subdivision. …”
When asked why the city hadn’t pursued greater efforts to collect from the Lovells, Crumley suggested they suffered from financial issues.
“From what I’ve heard, there’s been problems with banking and stuff over the years,” she said. “… But that’s hearsay. I really don’t know anything for sure.”
When asked if she or any other city employee had been instructed not to pursue collections from Sweetgrass Partners, Crumley replied, “No.”
“Nobody ever said, ‘Don’t bill them,’ because they’ve been billed from the get-go,” she said. “… All I can tell you is from the first meter reading, from when the guys first found that meter … because of a leak or something, they (Sweetgrass Partners) were billed instantly for the usage on that meter.”
When asked if the council has considered legal action to collect outstanding fees, Crumley replied, “Yes,” and confirmed the council had entered into discussions with former City Attorney Dana Maine before her February 2014 dismissal.
“We would be looking into legal action [to collect] the taxes and the water bill,” she said.
In addition to a longstanding delinquent water bill, Dallas, Texas-based Texas Sweetgrass Partners LLC, owner of several lots in Sweetgrass, maintains an overdue balance of $14,048.88 in delinquent tax bills also owed to the city of Demorest, Crumley confirmed.
“On the taxes, late fees accrue once per year, 10 percent,” she confirmed.
Tax bills, Crumley said, have been regularly mailed to Danny Yoo in Dallas, Texas.
Some bills have been paid, she said, while others haven’t.
“All of [Texas] Sweetgrass [tax bills] go to Texas to the same address, to the attention of the same man,” Crumley said. “Some of the bills are paid and some are not. I don’t have any rhyme or reason [as to] why some are and some aren’t.”
The council has since discussed the matters “multiple times,” she said, from November 2010, but beyond mailing bills has, at this time, “not made any other efforts” to collect.
“I think our former attorney [Maine] had talked to their (Texas Sweetgrass) attorney,” she said. But “the council is familiar with [both issues].”
Councilman Donnie Bennett confirmed the council has “been discussing it in our executive [closed] sessions.”
“So I don’t know how much I can say about it,” Bennett said.
When asked how many times the delinquent bills had been discussed, Bennett said he “really didn’t know.”
“I’m afraid I would underestimate or over[estimate],” he said. “It would be hard for me to say,” being those discussions have been spread out over a three-plus year period.
“It had been mentioned in the past about who to contact, discrepancy between who we thought owned the property and [evidently] they (Sweetgrass) had a partner in the property and there was some legal issue there of really who we needed to talk to,” Bennett continued.
When asked why the outstanding water balance had not yet been written off but left to accrue late fees, Bennett said he wasn’t sure as to the “business end of that.”
Whether any directives to Crumley were given regarding the past due amount, he replied, “None that I’m aware of.”
Councilman Jerry Harkness, too, confirmed the council has discussed the issue in closed session “more than once,” “numerous times,” even.
“That would be a topic that we discussed in executive session that I would not be able to discuss,” Harkness said.
When asked if the delinquent bill(s) had ever been discussed in open session, Harkness said, “I do not recall.”
When asked why the delinquent water bill had not yet been written off, Harkness said he wasn’t sure. “It’s not just one debt that we’re looking to collect on, but we’re looking to collect all our outstanding debts,” he added.
Harkness said he did “not recall” whether Crumley had been directed in any manner to collect the past dues, and neither confirmed nor denied whether the city was considering legal action to collect.
“That would be in the executive session,” he said. However, “I do look forward to getting it taken care of and I do think it’ll make our books easier to [manage].”
Austin said in his tenure as mayor for the city of Demorest, neither issue has been discussed in closed session, but said he made the information public at the March 25 work session in an effort to “be as transparent as possible.”
“It was brought to my attention because I’m asking questions,” he said. “I want to know what our outstanding bills are, what’s our tax base … My role as mayor is to be the chief advocate for policy, and that’s one of the things I’m trying to understand is a scope of where we were are as a city. So I’m asking a lot of questions.”
Austin said he initially learned of the issue through another council member, where he was also advised the topic had been discussed “multiple times” in closed session prior to Jan. 1 for purposes of “potential property acquisition.”
“… Prior to me becoming mayor, and the reason that I was given it was discussed in executive session was potential property acquisition,” he said. In 2012, “the previous mayor [Malcolm Hunnicutt] and council discussed this … there was some kind of transaction between Sweetgrass’ attorney and our previous attorney (Maine) regarding potential land acquisition in Sweetgrass for a potential well site and potential purchase of the water system at The Orchard,” near Turnerville.
When asked why the debt hadn’t been written off, Austin offered the following response.
“It’s very simple,” he said. “Georgia law would consider that a gratuity and it’s my understanding it would be a violation of the gratuity clause of Georgia law to write that off.”
When asked whether the city was still considering legal action to collect outstanding fees owed by Sweetgrass, Austin replied, “Absolutely.”
“In my mind, there is no difference between an outstanding water bill that is a $150 water bill and cutting that water off,” and this issue, he said. “Every customer is the same and if we’re going to require customers to pay late fees because of late payments and we have a policy of how long before water is cut off, then every customer should be treated equitably and fairly.”
Austin said he and council members have since entered into closed session for the exception of “personnel to discuss personnel actions regarding this and other issues regarding past due bills,” including both delinquent water and tax bills.
“In open session, we have instructed Mr. Homans to begin the process of developing the procedures and the process of collecting the outstanding debts that are [due] to the city,” he said.
Clarkesville-based attorney James Cox, attorney for Virgil and Carol Lovell, said Thursday it was his understanding this issue dates back to 2006.
“That bill apparently goes back to 2006. It was the result of a bad meter,” Cox said. “The reason I guess it continues to get billed and no action [is] Sweetgrass and the Lovells notified [former Demorest Mayor] Mr. Hunnicutt and [wastewater superintendent] Mr. [Charles] McGugan that it was a bad bill.
“They never got it corrected; the city never corrected the bill to reflect it was not a valid charge. That’s why it wasn’t paid,” Cox said.
“If that was a good bill, I’m sure the city would’ve done something,” he added. “All I know, we requested again and again, and [we were] assured it would be corrected on the bill.
“We must have quit asking,” he said.
“Way back when it was pointed out [there were] faulty meters. The city – Mr. Hunnicutt and Mr. McGugan acknowledged it … and knew it and it never got fixed,” Cox said.
Multiple phone calls to councilman John Popham for comment were not returned by press time.