Petersburg hit with lawsuit over $1.2 million in overdue sewer bills

Posted at 1:07 PM, Sep 21, 2016
and last updated 2016-09-22 14:43:51-04

PETERSBURG, Va. -- The financial future of the City of Petersburg just became more uncertain, after members of the organization that operates the South Central Wastewater Treatment Plant filed a lawsuit.

The suit, filed by the South Central Wastewater Authority, seeks to put the city in receivership, which means paid sewer bills would no longer pass through City Hall. Instead, they would go to a third party, who would then give that money directly to the authority.

The SCWA provides wastewater treatment services to the cities of Petersburg and Colonial Heights, and the counties of Chesterfield, Dinwiddie and Prince George.

Petersburg currently owes the authority $1.2 million. The problem, according to the lawsuit, is that when Petersburg residents pay their sewer bills, the city frequently uses that money to pay other bills, instead of giving it all directly to the authority.

SCWWA is represented by McGuireWoods law firm. SCWWA released the following statement to CBS 6:

South Central Wastewater Authority (“South Central”) was established by the Cities of Colonial Heights and Petersburg and the Counties of Chesterfield, Dinwiddie and Prince George.   South Central serves wastewater treatment needs in all five localities and charges each locality for this service in proportion to its usage.  South Central is particularly dependent upon the regular and timely payment by the City of Petersburg, whose share of these costs account for more than half of South Central’s budget for operations and maintenance.

The City of Petersburg has failed to pay for any wastewater services provided after May of 2016.  The City currently owes South Central approximately $1.2 million in overdue service charges and penalties.  Today, South Central filed a lawsuit in Petersburg Circuit Court to collect this overdue amount.

The City of Petersburg charges its residents for wastewater service.  Under the Service Agreement between South Central and the City these fees should be used to pay the costs of that service, including the costs of having the wastewater treated by South Central.

South Central has filed this lawsuit against the City of Petersburg not only to recover the past-due amounts, but also to request the court to appoint a receiver to supervise Petersburg’s billing and collection of wastewater fees from its residents.  South Central seeks this appointment to ensure that the money is used for its intended purposes and that residents continue to receive the wastewater service they pay for.

South Central values the professional relationships with each member locality and appreciates the difficult financial circumstances the City of Petersburg is experiencing.  Nevertheless, efforts to resolve the arrearages have been unsuccessful and – if left unaddressed - threaten the continued operation of South Central and the finances of the other member localities and their residents.

Petersburg officials expressed disappointment that the authority filed a lawsuit, "at this time."

"The City is and has been working with the Authority to resolve the amounts it owes," wrote Mark Flynn, Interim City Attorney, in a statement to CBS 6. "The lawsuit does not help the city and the Authority in achieving resolution for the City’s obligations.  As the Authority and citizens know, the city council and management have been working to resolve the city’s financial difficulties."

CBS 6 Senior Reporter Wayne Covil will have more on this story beginning tonight on CBS 6 News at 5 p.m.

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