PETERSBURG, Va. (WRIC) — The City of Petersburg is facing more financial troubles in the form of a $1.2 million lawsuit.
South Central Wastewater Authority is suing the city for unpaid bills. The authority issued a press release stating Petersburg hasn’t paid for water treatment services since May. Their monthly bill is about $376,000.
Authority officials say Petersburg residents pay for wastewater services and that money should be used to pay the authority for the services they provide.
“We are basically requesting to be set up as a receivership so when the customers pay their utility bills that portion that is due to South Central is paid to South Central,” said South Central Wasterwater Authority Chairman Robert Wilson.
Residents say the news is disheartening.
“To me, it’s a form of stealing from people that are struggling in our community,” city resident Shaneka Turner told 8News Reporter Nakell Williams. “It is disappointing. It’s disappointing and sad.”
In a statement, city officials said it’s disappointing that South Central Wastewater Authority is suing since they say the two parties had been working together to resolve the debt.
City officials say they’ve identified the amounts it owes to South Central Wastewater Authority but argue the lawsuit does not help the city or the authority in achieving resolution for the city’s obligations. They say authority officials know that city officials and council have been working to resolve the city’s financial difficulties.
If the City of Petersburg fails to pay the debt, the authority would resort to reserve funds and then other localities including Colonial Heights, Dinwiddie, Prince George and Chesterfield would have to essentially pay Petersburg’s portion.
“Chesterfield, Prince George and Dinwiddie, their waste water flow, either all of it, or part of it flows through the Petersburg’s collection system to get to the plant,” Robert Wilson with South Central Wastewater Authority said.
All of the localities contribute financially for wastewater treatment.
“Speaking strictly for Dinwiddie, their monthly portion is about $57,000. That amount would basically double,” Wilson explained.
On October 4, 2016, a judge ordered a referral to dispute resolution. He ordered the McCammon Group to act as mediator between the the City of Petersburg and the South Central Wasterwater Authority. The McCammon Group is located at 6641 West Broadway Street, Suite 400, Richmond, VA 23230. 8News reached out to them, but they declined to comment. Their role includes the following:
1)Facilitate open communication between the City of Petersburg and the South Central Wastewater Authority
2) Improve the relationship between the two entities
3) Act as special receiver of funds collected from residents to be paid to South Central Wastewater Authority
The Treasurer Kevin Brown is directed to transfer the balance of funds for utilities to the McCammon Group. The treasurer, fiance director, and clerk of the water department are directed to send a regular accounting of all water treatment and/or sewage utility billing, receipts and past due accounts to the McCammon Group for processing.
The McCammon Group as special receiver is directed by the judge to secure an indemnity bond in the amount of $1,000,000. Funds from the city treasurer will be used to pay the premium on the bond, paying the special receiver’s hourly fee for worked performed, and payment for any accountant fees or audit services contracted.
Petersburg Acting City Attorney, Mark Flynn,says the judge issued the order independently. He says the city did not receive a notice regarding any hearing.
In a statement the South Central Wastewater Authority says:
” The South Central Wastewater Authority appreciates the court’s swift response to this urgent matter and we are eager to have it resolved quickly. It is vitally important to the operations of the Authority, the public health and environment of South Central Virginia and the well-being of the citizens of Petersburg that the fees the citizens pay to the city for wastewater service be used to fund its continued provision.”
The City of Petersburg has hired Sands Anderson law group to work on taking steps to ask the court to reconsider and allow them to resolve the matter.