By Emily Ford
eford@salisburypost.com
SALISBURY — People renting land from Timothy D. Smith say they’re worried he won’t pay the water bill once he resumes collecting their rent.
Jim Dees, the Rowan County attorney, said he will try to make sure that doesn’t happen again.
“The county will seek some type of intervention with the bankruptcy court to try to insure payments are made not only for city and county taxes, but for utilities as well,” Dees said.
Smith recently filed for bankruptcy protection for two mobile home parks, as well as Tim Smith Enterprises. The voluntary Chapter 11 filing means he can resume collecting rent at Matika Villa and Circle Drive.
Some 200 residents at the parks pay Smith a lump sum each month for rent and water and garbage service. But Smith fell so far behind on his water bill, the city came within days of turning off water to the neighborhoods this summer.
The water stayed on because Rowan County began seizing rent checks in June and giving a portion to the city. Two months of rent attachments were enough to pay Smith’s delinquent property taxes on Circle Drive, as well as his current month’s water bill at both mobile home parks.
When Smith filed for bankruptcy last week, the county had to stop collecting rent.
“We have to pay him now,” said J.M. Allen, who had been giving his rent to the tax collector. “But is the bills getting paid that should be paid?”
Residents own their mobile homes and rent the land from Smith. Many want to speak out about their concerns but are afraid of retribution, Allen said.
Most of the trailers in Circle Drive and Matika Villa are too old to move. A year down the road, if the city turns off the water or Smith evicts them, people will lose their homes, Allen said.
“People are too scared to do anything,” said L.R. Childers, who’s lived in a mobile home in Circle Drive for seven years.
Three dogs circled his feet while wife Mona Childers cooked dinner on a recent afternoon.
L.R. Childers, who goes by “Cowboy,” said Smith promised he was paying the water bill before the county started seizing rent.
The couple, both disabled, keep all correspondence from Smith and the county and say they are trying to make sense of everything. Residents are confused and angry, Childers said.
“We really appreciated the city stepping in,” he said.
Smith’s water bill is still more than $50,000 in arrears, and he owes about $57,000 in property taxes on Matika Villa, according to officials.
The county attempted to collect, or attach, rent of about $106,000 in June and July. The tax office received less than that, and roughly $50,000 went toward Smith’s delinquent 2008, 2009 and 2010 property taxes, said Tonya Parnell, Rowan County tax collections manager.
The amount of money Rowan County gave the city to pay for Smith’s water and garbage services wasn’t immediately available.
Dees said he’s looking into next steps for the county and plans to talk with city officials “to jointly make some determinations on how to proceed with taxes.” The county collects property taxes for the city.
Smith voluntarily filed for Chapter 11 bankruptcy protection, which offers reorganization of debt as opposed to liquidation of assets under Chapter 7.
How and when his debts are paid has yet to be determined. The plan could take months to develop. While property taxes are considered a secured debt, a water bill is unsecured and likely would have a lower priority.
Smith’s attorney, Ed Ferguson of Concord, declined to answer questions from the Post.
Ferguson was asked if Smith has plans to pay his arrears, what priority the water and property tax bills would have in the reorganization and if he plans to pay his new water bill starting in September with his resumed cash flow to avoid another large debt to the city.
“Your email appears accusatory,” Ferguson said.