Petersburg mayor, treasurer upset they didn’t hear of lawsuit sooner

PETERSBURG, Va. -- The lawsuit seeking $1.2 million dollars from the city owed to South Central Wastewater Authority.

There are concerns over a lack of communication between Petersburg officials when it comes to involvement by city council, acting city manager and the  city treasurer.

Treasurer Kevin Brown says he heard about the lawsuit from CBS 6 Senior Reporter Wayne Covil.

"It doesn't make sense for me to hear from you on yesterday around 10:30 that we have a lawsuit," Brown says.

Sources tell CBS 6 a copy of the lawsuit was sent to the city 72 hours before it was filed and that is cause for concern for Mayor Howard Myers.

"We were notified on Tuesday at the waking hour, that there is a pending lawsuit," Myers said. "It's very disappointing to me that as our appointees, you need to reach out to council, so that council can make the appropriate decisions, to help guide you and move you forward".

Both Myers and Brown say the lack of communication inside City Hall is a problem and needs to be corrected.

"This is a situation that has now set the tone that you don't have the basic experience to move this city forward and so we need to do everything we can to get a new city attorney and new city manager in place to help us move the city forward," says Myers.

In a statement to CBS 6, Acting City Manager Dironna Belton says:  "The city must have the courage to make a plan and stick to it to maintain our great city.  Taking a stand and managing the city's finances in a way that protects its longevity is or utmost importance".

The statement goes on to say "Although the timing of this lawsuit is unfortunate, as the city embarks upon the implementation of the city's $12 million dollar budget cut beginning October 1st.  We will continue to applaud city council,as they make urgent and tough decisions to stabilize our city".

The 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."