A $1.2 million lawsuit filed by the South Central Wastewater Authority on Wednesday over unpaid sewer bills has pushed Petersburg one step closer toward financial ruin.
The authority said in a statement that the city has failed to pay for any wastewater services provided after May.
“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,” the statement said.
According to the suit, which was filed in Petersburg Circuit Court, the authority is not only seeking to recover past-due amounts, but is also requesting that the court 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,” the authority said.
Robert B. Wilson, chairman of South Central’s board, did not respond to calls and emails requesting an interview Wednesday.
Interim Petersburg City Attorney Mark Flynn said in an email that the city “is disappointed that the authority has chosen to file a lawsuit.”
“The city is and has been working with the authority to resolve the amounts it owes,” Flynn said. “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.”
A recent state audit of Petersburg’s finances found that the city is facing a $12 million budget gap in the current fiscal year while dealing with nearly $19 million in unpaid bills — among them the obligations due to South Central.
At an Aug. 18 meeting that was closed to the public, the South Central board of directors discussed the option of suing the city over the unpaid bills.
Petersburg’s representative, Daniel Harrison, the interim director of the Public Works Department, left during the closed session “due to a prior commitment,” according to the minutes.
South Central was established by the cities of Colonial Heights and Petersburg and the counties of Chesterfield, Dinwiddie and Prince George.
The authority treats the wastewater in all five localities and charges each locality for the 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 authority’s statement said.
The suit deals a major blow to efforts by city officials to close the budget gap and repay unpaid obligations.
Earlier this month, the City Council approved a series of austerity measures aimed at freeing up much-needed cash flow, including tax increases, pay cuts of city staff members and the closing of the city’s three museums.
And in August, Petersburg temporarily averted the threat of suspension of curbside trash collections by making a monthly payment to the Central Virginia Waste Management Authority, which the city owes more than $600,000.
The city had billed residents for the service but has not been remitting the fees to the CVWMA — a situation similar to what prompted South Central’s lawsuit.