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Sparrows Point owes Baltimore $5.4 million in unpaid water bills

The city never stopped the flow of water to the steel mill, even when the mill stopped paying the bill. A BREW EXCLUSIVE.

Ira-Rennert-NY-Police-Commissioner-Raymond-Kelly-e1320543145335

RG Steel’s owner, billionaire Ira Rennert, with New York Police Commissioner Ray Kelly at a charity gala last November.

Photo by: Lyn Hughes

The Sparrows Point steel mill racked up $5.4 million in unpaid Baltimore City water bills over the last three years, The Brew has found.

This is 2½ times more than the $2 million reported when the steel company filed for bankruptcy protection on May 31. Because the charges are considered unsecured debt, it is highly unlikely that these fees will ever be paid.

Sparrows Point is one of the biggest users of water and treated sewage (known as “industrial process water”) in Maryland, consuming up to 50 million gallons a day. Also gargantuan is the amount owed by RG Steel Sparrows Point to the city.

To put it in context, the company’s water bill, if paid, would be more than enough to keep the fire companies, set to be closed by Mayor Stephanie Rawlings-Blake, open for the 2013 budget year – and end the practice of revolving fire station closures.

The payments owed by RG Steel and its billionaire owner, Ira Rennert, would keep the eight recreation centers threatened with closure operating in the city.

No Payments in 30 Months

Sparrows Point’s underpayment of water charges goes back many years. However, it rapidly accelerated after Russian-based Severstal purchased the facility in 2009.

City records show that water is supplied to the mill under two large meter accounts. The last payment made by Severstal for one of the accounts was 30 months ago in December 2009.

When RG Steel took over the facility last year, it never paid the prior debt owed to the city. In fact, the company altogether stopped paying on the account for the next 14 months, city records show.

The account is currently $3,680,502.04 in arrears.

RG Steel paid minimal amounts on its second water account. The last payment of $67,500 was made in April. The account is currently $1,738,603.57 in arrears.

Mill Not Put on Tax Sale

The city routinely puts residents at risk of losing their homes over unpaid water bills as small as $350.

Amounts owed by Sparrows on its two major water accounts with Baltimore City. (Bureau of Water and Wastewater download)

$5,419,105.61 owed by Sparrows Point on its two water accounts with Baltimore City. (Bureau of Water and Wastewater download)

Last month, more than 300 properties went to tax sale because of unpaid water bills, according to the Baltimore Finance Department.

Sparrows Point was never placed on tax sale by the city (although The Brew revealed that Baltimore County planned to put the mill on sale for failing to pay $4,526,001 in property taxes when it filed for bankruptcy on May 31).

Nor did Sparrows Point suffer from a cutback in water due to its persistent delinquency.

Records at the Bureau of Water and Wastewater show a February 6 “turn-off” date for the mill.

But the date passed with no action taken by the city.

City Records Hard to Get

Asked by The Brew for information on the steel company’s water debts, City Hall was no help.

Inquiries to the Finance Department were met with the response that finding out how much RG Steel owed the municipal government would take time.

But the amount came into better focus in a filing  by lawyers to the U.S. Bankruptcy Court of Delaware late last week.

The filing cited $5.1 million owed to the city on two water accounts. By tracing these accounts, The Brew found that the amount owed was actually $5.4 million.

May Owe Additional Funds

The court filing noted that RG Steel may owe additional funds to the city “related to water reuse agreements, water discharge agreements and otherwise.”

The filing added: “Baltimore City is continuing to review its receivables and reserves all rights with respect to its claim(s) against the Debtors.”

The petition was filed by Venable LLP. The Baltimore-based law firm which was hired by City Solicitor George Nilson to represent the city in the bankruptcy proceeding.

RG Owes Baltimore County $1.9 Million More

Venable also represents Baltimore County. In a separate filing, Venable told the Delaware court that Baltimore County is owed $1.86 million in sewage charges in addition to the $4.5 million in unpaid property taxes.

The filing reports that Baltimore County charges approximately $155,000 a month for sewage disposal at the steel mill.

Using this figure, the filing implied that RG Steel has not paid its sewage bill for 12 months.

Altogether, court filings show that RG Steel owes the city and county $11.5 million, or nearly twice the initial amount publicized when the company first filed for bankruptcy protection.

Both Baltimore city and county asked the court to order RG Steel to pay more than two weeks charges as a deposit for the continued supply of water and sewage service to the mill.

The petitions argued that taypayers are “at risk for non-payment” of future water and sewage bills because of RG Steel’s precarious finances and lack of a known buyer of the mill.

Bankruptcy Court Judge Kevin J. Carey has not yet ruled on the request.

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  • mta000

    rich asshole gets free stuff from the government while the rest of us get the shaft.  so typical i could puke.

  • Mairzdoatz

    The ‘who’ allowed it to be ignored and the ‘why’ needs to be answered by City.

    • BOF Boy

       The Baltimore County and State elected officials are not going to let the steelworkers down and turn-off the water to Sparrows Point because this would put steelworkers OUT of WORK!  Same reason that the Point does need to meet the unrealistic EPA regulations that our elected officials ordered relief from. The new Mayor needs a lesson on how much power the steel workers have over the elected Pols!

       If the city wants to keep the fire stations open and recreation centers open for the kids they should stop paying out all that taxpayer Section 8 money and services to non-working deadbeat crackheads. So now it is the welfare lobby against the working man at Sparrows?  

       How dare Baltimore City want payment for all of the Back River Shitplant water diverted to the Point that we dump into Bear Creek and the Patapsco saving them from pumping it into Back River!  Can you also believe that the Mayor hired Venable to go after the steel plant – for years the lawyers used to represent Beth Steel – Venable, Bejer, and Howe?  Some people will do anything for a buck!  Use the money the city paid that high dollar law firm to keep the Rec Centers open for the kids instead of trying to put hard working steelworkers out of work!

  • Sabina Pade

    Yes, it does look like a blatant case of a rich a**hole getting millions in handouts from the government.  It would be interesting to know whether this particular one donates to the campaigns of politicians who promise to not raise taxes on the wealthy.  It would be interesting to know, also, why action by the authorities to collect on payments due was so lethargic.  Possibly they were told that action to collect would result in the plant being shut down….

  • Sparrows Hater

    If this is correct, shame on the City for not being better stewards of the municipalities financial interests.  Yeah, Ira Rennert is a deadbeat schmuck for not paying but the City irresponsibly did nothing to mitigate.

  • Shortline railroad guy

    Looks like a risky bet with taxpayers’ money to me.  It seems quite likely these city agencies were looking the other way on the unpaid bills, hoping RG Steel would turn things around and keep a couple thousand people employed.  Just like any wager, you can always lose big, and it looks like that is precisely what happened here.  In the end, the taxpayers of Baltimore will be the ones who foot this bill, one way or another…

  • OxygenMaskedMan

    Much of the “water” that the city wants payment for is water that they pipe down to the Point  in a large underground pipe running alongside the CSX railroad right of way.  This lightly treated sewage water is used in several processes and then this nasty smelly water is released into the outer Harbor by the Key Bridge.  I wonder what the millions on the big sailing ships and yachts would think if they knew that the water in Baltimore Harbor was mostly Pee and Poop?  Sh*t-abration is more like it!  They are celebrating the Star Spangled Banner while floating around in a TOXIC CESSPOOL called Baltimore Harbor!
     
    Baltimore City should be paying RG to take this fifth off of their hands and make it go away deep into the Patapsco River. All crabbing and fishing should be banned from the Anne Arundel to Baltimore City side of the Patapsco until the sewage, benzene, and heavy metals from Beth Steel and the new rapers are under control.  

    Shame on the Political leaders for allowing them to get away with killing our river and Chesapeake Bay so that the Robber Barons can live in Palaces far removed from the cancers and dirt we enjoy in Dundalk, Turners Station, and Lodge Forrest.  

  • Bmorepanic

    Well, at least it makes her racing loses look like chump change.

  • Dr Raymond Boothe

    I cannot believe that any mayor or city government would let this continue.The EPA should sue the city for letting this go on, and the city should sue RG Steel for their debt. What a total mess.

    • OxygenMaskedMan

      Dr. Raymond Boothe if you only knew that when we had 30,000 employees it was understandable how everyone looked the other way and even laughed at the Toxic air and water discharges. Now we know better but the Maryland Political machine still cannot bring themselves to stop allowing the Point to go unchecked in the name of big business and high paying jobs. The token $135,000 fine RG paid Maryland EPA was cheaper than the millions needed to correct and stop the toxins from going into our children’s bodies. 

      It cost less money to make people sick than not pollute in the first place. This head turning goes back decades and continues still to this day.  It is political suicide for any Maryland elected official to question the toxic air and water discharges from Sparrows Point. Our elected officials are in a difficult balance between jobs or clean healthy air and water.  The jobs and big money won and there is nothing anyone can do about this.
      Campaign money always wins out over our health.  The EPA will sue no one, will never be allowed to go that far because the Point is off limits to them, this is one thing ALL of our elected officials agree on! Do not believe me? Try to find just one of them who was spoken out against the Point’s the toxic discharges over the years!  I am old and my life is just about over, please speak out, as our little children should not have to these toxins enter their little bodies too.

  • Unellu

    There is no way to know if this water bill is accurate. Nevertheless corporations control our various jurisdictions, because politicians and bureaucrats are terrified, by making delinquent corporations pay what they owe to the govt, more workers will be laid off or the corporations will actually fold and leave.  In this case such squeamishness and lack of guts were actually imbecilic.  Ira Rennert was an out and out rascal.  He understood the ambivalence of govt. toward the corporate sector and he visited havoc on Sparrows Point, while cheating Baltimore city and Baltimore County govts, both.  I say, good luck getting the moneys owed.  It will be next to impossible and I actually smell more wastage in the form of lawyer fees to Venable.  Ira Rennert, played in the steel business like it were a casino.  There were no rules to his game of blackjack.  He leaves a vast devastation and he escapes with a mere dent in his billions.  He exemplifies the cannibalistic tendencies of many of our corporate leaders.  We should sit out our elections en mass to teach our politicians we will only value our franchise when they clean up their act.  No one votes–imagine.  Then who will be the winner?  I bet they’ll come to round us up with sticks and herd us to the polling booths– like chickens in a truck– to our slaughter–to convince themselves our democracy works. 

  • ESSEX WATER PARK

    SHUT THE DUMP DOWN !!!

  • Trotliner1961

    Dr. Booth what no one has mentioned is that all of the water is cleaned at the tin mill canal water treatment facility before being discharged into the harbor. Mittal was ordered by the dept. Of environment to upgrade the facility and spent millions doing it.

    • JohnDrSmith

      You mean that over the last ten years millions of dollars have been spent to clean the water that was discharged. Say it isn’t so……… also millions were spent to control emissions throughout the plant…….

    • OxygenMaskedMan

      Then why do we still have so many fish kills, fish with ugly painful ulcers and sores, and toxic algae blooms in Bear Creek? The Health Department tells us not to eat fish or swim  in the Patapsco near the Key Bridge or Bear Creek. The Port of Baltimore just spent $800,000 on a study of Sparrows Point’s Coke Point and they found a toxic nightmare at just this one site alone!

      God help anyone taking a sample at the Point’s Tin Mill Canal, as they better have good insurance to cover their Cancer Treatments!!  

      • JohnDrSmith

        While I can’t argue the past practices all I can do is point to the efforts and improvements over the last ten years.The pollution you point to is a byproduct of over 100years of industrial production. You can’t overcome that in ten years.

        • OxygenMaskedMan

          Dr. Smith in some of my earlier postings I have said that under Rennco ownership the community has seen the most improvements in the amount of Kish, Soot, and general commotion coming out of the Point. It is no secret that the company has one owner and that is Mr. Rennert and he made it clear from top management on down that the Point is on public display in front of everyone and that the days of gross pollution at the Point are over. That anyone falling asleep at the switch permitting toxic or nuisance discharges would be shown the door. This is the first time in the history of Sparrows Point that an owner put the environment before the dollar. Say what you must about Mr. Rennert, but from all my years in the Point I have never seen an owner with the stewardship of this man! We must all pray that the new owner, be them South American, Indian, or South African will continue the responsible environmental milestones put in place by RG Steel, this is a legacy for all of us to be proud of!  Now let us all hope for a new, clean, and modern Sparrows Point Steel Plant!

      • Jason

         You should attend the Sparrows Point Joint Conference committee hearing on June 21st to address your concerns. The Steelworkers union has not informed the membership to urge them to attend so you won’t have opposition.

        This committees main objective is to shut down steelmaking at Sparrows Point. There are 2000 Steelworkers laid off right now that would be happy to attend. Why isn’t the union trying to get the members to attend this meeting in support of Steelmaking. They are more concerned about getting their positions paid for while everyone else is laid off.

        • TACO Fat Steve

          Jason where are they holding the meeting, I cannot find it in the newspaper?  I want to see if the politicos are going to jump ship with us and go over the Port Terminal people.  They all want the Point real bad for their new super-sized Chinese ships coming to Baltimore.  Let’s fill the hall with 2,000 steelworkers and several thousand more of family members and friends and find out what they have on their agendas.

          We are already hearing that they want us to become Longshoreman or take port related positions, they will help us all get our TWIC Port security clearance cards. Maybe not a bad idea because the port is growing while we are shrinking and they make as much as us or even better when you add up all the benefits and no more bull crap like we have had in recent years.  

    • 21219 Property Tax Payer

      Yes it’s just so comforting to know that a steel mill that has not been able to run profitably for at least a 15 years takes in millions of gallons of partially treated sewage water as part of their routine operation and after using it is then responsible for treating that water before they dump it into the Chesapeake Bay.  Ha!!  Anybody want to buy a bridge?  I can personally attest to often seeing a slimy mixture of what appears to be a combination of grease and kish on the surface of the water over the last few years.  Of course that is just what I can see.  I can only imagine what is unseen, silent and deadly.  And as anyone who lives in the area knows, the worst discharges usually
      occur on a Friday night or early Saturday morning when they know that
      the MDE is off for the weekend.  Oh but as long as 1800 steel workers have jobs I guess it’s all worth it.  By the way, the number of employees employed by the mill doesn’t even put them in the top 50 list for employers in the state of Maryland.  But it’s worth it.  For that privileged few it’s worth it. 

      • BOF Boy

        Yes my friend it is worth it to keep 2,000 men and women employed.  The kish slick has been addressed over the years. The State & Federal inspectors cannot agree if it is was a water or air issue and anyway kish will not hurt you, your children or your pets!  The oil slick most likely came from a storm drain where the local residents change their own motor oil etc. and are not so careful. If these oil and kish slicks you imagine are there, why has the USCG or Baltimore County’s DEPRM Director Vince G. not responded to your complaints?  I will tell you why – there is no longer any kish or oil on the water!  The only oily glitter is in your imagination!

         Yes. SP has a special arrangement to keep jobs and allow the steel industry to make a modest profit which in turn supports the local economy. With out SP the local businesses will go under and close-up.  

        Did you know that the Baltimore County Air and Water, Electrical and plumbing inspectors are not allowed to enter SP property, this agreement has been in force for a very long time and will not be changed just because you Tree Huggers want everything your way. As for the TOP 50 employers in Maryland, I would like to remind you that when SP speaks all the Elected Officials jump to lend a helping hand to SP – see if they do the same for your top 50? You cannot fight City Hall and you cannot flight SP!  Did not Gov. O’Malley call the head of GE and ream him out about cutting the off the loan?  The treated sewage water will hopefully flush out all the stuff you locals toss into the bay and send it out to sea.  Everything has been going along good for the last 100 years so please let it be. As soon as they start back up the blast furnace I will buy all you locals a cold beer!

        • 21219 Property Tax Payer

          Gee whiz BOF, one minute you’re calling me a tree hugger and the next you’re accusing me of throwing stuff into the bay. Anyway now for the facts, it has been scientifically proven that kish causes a form of lung disease that is very similar to asbestosis.  You can deny that all you want but you are wrong.  If you were to stop drinking the koolade and do some research you would find that that is true.  Also I know the difference between motor oil and grease.  That tan colored grease I see on the surface of the water is not motor oil.   As I have said many times and will continue to say, the 1800 jobs the mill supplies does not justify the damage done to the environment and surrounding community.  And believe me you are wrong about the politicians not working with the top 50 employers in the state.  Do a search and see who they are for yourself.  They put the mill to shame in more ways than one. 

          You might come out of this latest failure but you are living on borrowed time.  your time is soon going to come to an end.  The writing is on the wall you’re just too blind to see it.  I have spoken to some of these politicians that you think are in your back pocket and privately they acknowledge that you are dangling by a thread.  One, (who’s identity I won’t divulge,) actually called the steel mill a “3rd world type of business that no longer has a place in our community.”  So mark my words the reaper is coming. 

          I’ll also add that I find it particularly disgusting that you seem to get some kind of perverse satisfaction out of the knowledge that you are allowed to get away with polluting in ways that other businesses would not be allowed to.  It really speaks volumes about you as a person.  

  • Unellu

    Ira Rennert looks like he has Graves disease-I hope he does and the police commissioner of NY looks like a smug son of a gun.  A charitable event eh?  The right hand taketh away from Sparrows Point and the left hand giveth to charities.  Rennert is a man of many parts that do not work in concert.  

  • John

    Another story that doesn’t tell the whole truth. Typical and pathetic to make up stories with piece meal information.

    What you don’t read in this story is that the meters the state is using have been proven to be faulty and incorrect and they have still not fixed them from years ago. Hey remember the article on the brew about faulty meters…………. Gee sounds familiar.

    This issue has been on-going since Mittal and if the City had a leg to stand on they would have shut the water off. But they know they have been billing in error for years.

    Also keep in mind that the waste water treatment plant owned by the steel mill and built as ordered by the EPA provides no benefit to the process of making steel but does in fact clean a tremendous amount of polluted water that comes from the sewer systems of Baltimore. So the reality is the city,state, county get water cleaned for free before being put back into the bay at no cost to them. Gee sounds like a good deal for them. The city,state, county get water it cannot clean cleaned by a plant it did not build and does not pay for the upkeep.

    These stories are getting dumber and dumber.

  • ESSEX WATER PARK

    I THINK ITS FUNNY HOW MUCH THE UNION GAVE TO THE OBAMA CAMPAIGN AND OBAMA IS THE VERY MAN GOING AFTER THE COAL INDUS.  HE NOW IS ABLE TO DO IT THROUGH THE EPA. LET ME SEE, BGE USES COAL. AND WHAT IS THAT STUFF WE USE?? COKE!! ALSO WE WILL BE PAYING TAXES ON THE POLUTANTS WE PUT OUT. I LIKE THE OLD DAYS, WHEN OSHA CAME IN AND IMPOSED FINES. IT WAS CHEAPER TO PAY THE FINES THAN TO FIX THE PROBLEMS. IF TATA BUYS US THERE WILL BE BIIIIIIIGGGG CHANGES COMING OUR WAY. BUT, A JOB IS A JOB. I ASK YOU, WHAT HAS THE UNION DONE FOR YOU LATELY?

  • Bayj

    Hey 21219 the place has been making steel a lot longer than you’ve been a tax payer. Before you bought Or built your house in 21219 you should have been smart enough to check out the neighborhood you dumb ass. There are a lot of old timers in the 21219 area who work or have worked and retired out of the great mills of Sparrows Point. If you don’t like the smoke or noise or smell move far away. Didn’t you see the stacks when you moved in or are yOu a blind idiot .

    • me

      the epa should have shut that plant down years ago, now is the time! no more poison in the bay!

      • Walter

        The EPA goes not have any power over the Point and will not touch Steelworker’s jobs with a ten foot pole. Our Union and Senator and Congressman had them inspectors go pick on someone else and leave the backbone of America’s Industrial might alone!

        You Yuppies and Greenies should stop using Chemlawn on your yards as this and the Eastern Shore Chicken Farmers is the real reason that the Chesapeake Bay is going down the tubes! The little bit of discharge Sparrows Point puts in the Bay is a drop in the bucket compared to the Back River Poop Plant and farm runoff!

        Dr. Walter  Phd. BS

        • me

          just sit back walter and watch, the pole got shorter! the people are tired of it.

          • TACO

            Just wait until the Indians or South Americans fire Sparrows Point back up. The time is ticking away for the good news for the company, union, and Judge to to make the announcement of the new owner and their intentions to run the Point full out again.

            No swing operation this time, because the numbers demand that L be run at near FULL design rating!
            Its the very EPA concerns you have that will swing the pendulum in favor of keeping steel making alive and business as usual at the Point. The Port of Baltimore interests are content to have a small dredge dike at Coke Point and do their expansion over on the West Baltimore side where it is cleaner to bring in new cars then it is at SP.

        • RAVENS 55

          YOU WILL SEE THIS PARTY IS ABOUT OVER  JUST TO MANY PROBLEMS MONEY THE EPA AND IRA AND THE P O S UNION HAVE MADE A BIG MESS THEY CAN NOT GET OUT OF THIS TIME LALALALA

  • Jason

     Sparrows Point Partnership Meeting
    Towson, Md. (June 7, 2012)
    – The Baltimore County Sparrows Point Partnership, an economic
    development business advisory group looking at port-related business
    development opportunities for industrially zoned properties in the
    Sparrows Point area, will hold its first meeting.
    Date, Time, Location
    Thursday, June 21, 8:30 to 10 a.m.
    Maryland Port Administration HeadquartersWorld Trade Center401 East Pratt StreetBaltimore, Maryland 21202
    The meeting will be held in the 20th floor conference room and is open to the public..

  • OxygenMaskedMan

    Thank you 21219 for your kind words and thoughts.  Let us all pray that the meeting today at the World Trade Center of the very fine and respected leaders in Port related businesses will join together to take over the entire Sparrows Point peninsula and turn it into the Port’s Crown Jewel, as they have done with the Seagirt, Dundalk and other spanking neat, spotless, and clean marine terminals! This is a new beginning for the entire Baltimore region!!!!!!!!!!!!!!

    • OxygenMaskedMan

      Mark, Has anyone heard what happened at the meeting the Baltimore County Executive called at Baltimore’s World Trade Center where his advisory team discussed the future of the Sparrows Point corridor?  There was a big media buildup before the event, but no real post meeting news conferences.

      Maybe the Brew can interview some of the committee members so that the public can get a feel for what they have in mind for Sparrow’s future?

  • I L A TO BE

    GEORGE WHERE ARE YOU WE NEED A SHIP UPDATE WALTER CANT DO THIS ALL BY HIMSELF THERE IS JUST SO MUCH GOING ON DOWN HERE

  • TACO

    I LA TO BE you most likely did not hear or read that George joined all the old retired farts at North Point McDonalds. His family made him call it quits with this last downturn.
    Here is a copy of what he says is his “last” post.  If he has given up after about 50 years 
    involved at the Point this says something we should think about too. It almost wants to make you cry and says much of what we all are going through and feel. 

    “Dr. Boothe, everything you say is this post is so very true, I am about to toss in the towel. My time at SP is now over, they told me to turn in my Hardhat today!- from Eisenhower to Obama is something I could have never imagined even if I overdosed on Yoo Hoo!  I wonder if the Smithsonian will want me?For me and so many others the game is over. It has been a long run from Maryland Steel , Beth Steel and all the Johnny Come Lately’s. We made history -Golden Gate Bridge and Liberty Ships, blah blah, but you and Mark and the Global market conditions have convinced me its over and we must move on and this may not be so bad and I do not like it but accept it!  Sparrows Point as a Steel producer is over and now belongs to the ages and history books. It is bittersweet that I saw so much of this history myself. I can still smell the coke oven gas on a hot day, not the best thing to remember but the times were a better place even though it was not the best for one’s well-being.Good Bye my Friends and may God be at Your Side, it was a long run for me and I unfortunately outlived so many men smarter and better than this old SOB! George J.”

    • I L A TO BE

      WOW THAT MAKES YOU THINK TACO SAD  WOW  GOD BLESS ALL

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