Collections of Utility Bills and Recent Developments in the Law of Utility Billing

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Evan Bond
5 years ago
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1 VIRGINIA GOVERNMENT FINANCE OFFICERS ASSOCIATION 2010 SPRING CONFERENCE MAY 12-14, 2010 VIRGINIA BEACH, VIRGINIA Collections of Utility Bills and Recent Developments in the Law of Utility Billing B B b N D T A By Barbara Notar, Deputy Town Attorney Town of Leesburg, Virginia

This presentation will deal ONLY with General Governmental Utilities under 15.

2 This presentation will deal ONLY with General Governmental Utilities under and NOT authorities formed under the Virginia Water and Waste Authorities Act! This presentation will ONLY deal with water and sewer utility fees!

3 Water supplies and facilities Regulation of sewage disposal or water service Localities i authorized to establish, etc., sewage disposal system; incidental powers Fees and charges for sewer services

15.2-2143--Water Fees and charges for the services of such systems shall be fair and reasonable and payable as directed by the locality. 15.

4 Water Fees and charges for the services of such systems shall be fair and reasonable and payable as directed by the locality Fees and charges for sewer services Such fees and charges, being in the nature of use or service charges shall, as nearly as the governing body deems practicable and equitable.

5 provides that the term treasurer includes directors of finance and any other officer that performs some or all of the duties of the treasurer. This provision expands the scope of those who can partake in the administrative collection powers afforded under Title 58.1

6 Suit filed in the Loudoun County Circuit Court by 10 individuals and homeowner associations Plaintiffs alleged water and sewer rates were unfair and unreasonable as a 100% rate differential was assessed against out of town residents who were customers of the Town of Leesburg Town defended on the basis that rates were fair and reasonable in that out of town customers did not pay Town taxes and were not subject to owner s risk and reasonable when compared to other jurisdictions

7 Circuit court struck down water and sewer rates enacted by the Leesburg Town Council and set the maximum rate the Town could charge its out of town customers Town appealed to the Supreme Court of Virginia 3 judge panel denied petition to appeal Town filed a Petition for Rehearing to full court Supreme Court granted Town s petition VML has filed an amicus brief as case affects local governments across the Commonwealth, most of which operate their own utilities and many of which provide service outside their borders

8 Town of Leesburg has 3 classes of rates: In-Town, Out of Town and Qualifying Elderly Bills mailed out on a quarterly basis Bills based on charges from Automated Meter Reading 8 cell towers which send info twice a day Bill includes a base or fixed charge to recover meter and billing costs; and A consumption or use charge billed on the basis of usage 2 types of consumption charge for water: regular and excess or conservation higher rate begins if usage is 35% higher h than winter quarter. Sewer consumption charge is based on winter quarter usage.

9 Third party (ECHO) sends bills Leak policy will credit 50% of water and 100% of sewer--must be underground leak Availability fees used for capital costs Will allow payment plan for commercial customers Easy payment availability goal

10 Quarterly billing 30 days to pay If not paid after 30 days, 10 % penalty added 2 nd bill sent after 30 days Shut off notice sent after 2 nd bill Shut off occurs after 5 days if unpaid Do not shut off water on Fridays Service charge of $20 to turn service back on and deposit Locks on meters if tampered with and another $20 deposit if occurs allows $35 fee for canceled check or stop payment may still collect SS#s to allow for debt collection

11 provides that the treasurer must collect taxes or other charges that have become delinquent by distress or otherwise. Distress means to sell property belonging to the delinquent account holder in an effort to pay the delinquent amount owed to the locality. **The property sold under distress does not necessarily have to be the same property being taxed.

12 Treasurer w/approval of governing body may employ collection agency Gov. Body with (A) or without (B) approval of the treasurer may hire attorney to collect local taxes or other charges. The treasurer is entitled to credit for delinquent taxes that are referred and collected. (hostile takeover) Can file suit in General District Court or Circuit Court (sewer charges) Can record lien against property owner if judgment obtained against tenant. Also authorizes owner to be liable for tenant s charges. BUT: certain localities may enact an ordinance which allows lien to be recorded without judgment

13 Any lien for water and sewer charges when properly docketed d may be enforced in the same manner as taxes Leesburg 2605 has used this code section to enact Town Ordinance which authorizes a lien for unpaid water and sewer charges rd party or Treasurer s liens can be used et seq.-- Setoff Debt Collection can be used

14 Especially common in localities home to universities and colleges. For localities qualifying under a lien may not attach unless the user of the water and sewer is also the owner or unless the owner of the real estate negotiated or executed the agreement for the service For all other localities, sewer service under may be charged to and collected from: Any person contracting for the service or the owner, lessee or tenant or some or all of them who use or occupy the real estate

15 Leesburg uses years for oral or implied contracts 3 years from the last day service provided or payment made 5 years for availability fees since a written contract (permit) is signed

16 Recall that a locality by ordinance may provide that t utility charges, such as water and sewer fees become liens against private property. p ( , , , , ) Because such liens are created statutorily, there is no violation of the automatic stay. Thus, if the debtor owns the real estate served by the utility, the claim should be filed as secured; otherwise, utility fees should be filed as unsecured non-priority debts.

17 The automatic stay prevents shutoff of service for nonpayment only if the trustee or the debtor within 20 days after order of relief (30 days for a Chapter 11) provides adequate assurance (a deposit) of post-petition payment, and pre-petition p deposit may be used to set off utility debts without notice or order of the court. Section 366 (b) and (c) of Bankruptcy Code.

Department of Public Works Water & Sewer Divisions. Water & Sewer Divisions Customer Service Policy & Procedure Manual

Department of Public Works Water & Sewer Divisions. Water & Sewer Divisions Customer Service Policy & Procedure Manual Department of Public Works Customer Service Page 1 I. Application for Service Anyone may apply for water and/or sewer service to a property provided they are the owner, owner s agent, or an occupant of