The following is an article written by Research Attorney
Jeanette Behr with the League of Minnesota
Cities
Seeking Payment for
Delinquent Water Bills
Minnesota cities
use one or both of two methods to get paid for water services when
the normal billing process fails. This article provides an overview
of shutting off water services or certifying unpaid water bills to
the county auditor for payment with property taxes. This article
does not address municipal gas and electric utilities.
Any city may
provide comprehensive water services and systems, including sewer
and storm sewer services, for citizens. Coincidently, a city may
use reasonable rules to enforce payment for water services from the
owner, lessee, occupant of the property or all of them. Water
services, as stated in this article, refers to water, sewer, and
storm water services.
What process is
required to enforce payment? Cities must establish reasonable
and appropriate timelines to provide water consumers written notice
of their right to contest unpaid bills, water shut-off, or
certification of unpaid bills to the county auditor. The notice
must clearly identify the person or persons the city authorizes to
listen to consumers and make appropriate decisions based on the
facts. A discussion of unpaid bills, or hearing, is an informal
proceeding and cities can enter into installment agreements with
consumers to address delinquent bills.
If the consumer
does not respond to reasonable notice or not resolution is reached,
the city may proceed with shutting of water or certification to the
county auditor to procure payment. First, cities should use
reasonable methods to ensure the responsible person receives written
notice of the pending action. Some cities send notice by certified
mail to the person's last known address, other cities deliver a red
tag to the front door of the property as a warning of water shut off
or certification.
When is a city
barred from shutting off water? The cold weather rule is an
important exception to keep in mind before shutting off water
service. No utility shall disconnect service to a resident unit
during cold weather months, between October 15 and April 15, if that
shut-off would in any way affect the primary heat source of the unit
and the consumer complies with the provisions of the rule. This
rule applies to shutting off water if the primary heat source is
related in any way to the water supply.
Can cities shut
off tenant's or landlords' water? The law allows cities to
enforce charges against a lessee or occupant, but also requires
cities provide tenants notice and a hearing as discussed
previously. Since it is often difficult to engage in this lengthy
process with individuals who live in an area for a short time, most
cities pass an ordinance making property owners financially
responsible for water services. As to landlords, a tenant's water
supply must not be terminated due to a landlord's outstanding water
debt without notifying the tenant and providing a chance to discuss
the situation.
How is shutting
off water affected by property sales? If the owner of a
particular property sells the property and has delinquent water
bills, cities cannot require the buyer to pay those delinquent bills
before providing water services. Nor can cities shut off water
services to a new owner based only on the outstanding water bills of
the seller.
What about
bankruptcy proceedings and water shut-offs? Initially, water
may not be shut off when a property owner with delinquent bills
files a petition for bankruptcy. Twenty days from the date of the
filing, however, a city can terminate water to the property unless
the owner or bankruptcy trustee provides a deposit or some assurance
of payment for continuing water service. A state law makes
governmental services a prior lien in bankruptcy proceedings by
operation of law.
Is
certification for collection with taxes a better option than
shutting off water? There are many exceptions to consider
before shutting off water to a particular property. To avoid this,
cities can certify unpaid water bills to their county auditor once a
year. The outstanding debt then becomes a lien, or charge, against
the property, collected with property taxes. Even if the property
is sold after certification, the buyer must pay the debt. Also, a
prior lien against the property secures the debt if the owner later
declares bankruptcy. Additionally, certification prevents large
delinquent bills carrying over from year to year and, once
delinquent bills are certified, staff time spent trying to collect
payment is eliminated.
Cities should ask
their county auditor when unpaid water bills must be certified; the
state implies a deadline of December 28 in conjunction with property
taxes, but some counties require certification of unpaid water bills
by November 29 with special assessments. Remember, notice and a
hearing must be provided prior to certification.
For examples of
notice and hearing procedures, please call the League Research
Service at (651) 281-1200 or 800-925-1122.
Reprinted with permission from Jeanette
Behr, League of Minnesota Cities.
Jeanette Behr is a research attorney with the League of Minnesota
Cities. |