Running out of toilet paper may soon be the least of your hygiene worries if you haven't been paying your wastewater bill. Sahuarita has had enough of unpaid bills and is looking to terminate sewer service for delinquent customers.
The proposed 2020 budget includes $30,000 to determine a technical and legal process to terminate sewer service to non-paying customers.
Sahuarita Finance Director A.C. Marriotti said $33,000 per month in active accounts was going unpaid as of a few months ago. Before the town began billing water and sewer separately in 2014, it was common for less than one percent to go uncollected. That has risen to 10 percent, Marriotti said.
As of May, there were 5,937 active wastewater accounts with 447 customers more than 30 days past due; there were 797 delinquent accounts in collections. There were 1,239 inactive accounts owing an average of $638. Unpaid account balances range from one cent to $3,648. According to Marriotti, customers could have more than one account depending on their circumstances.
As of June 30, 2018, the last audited year, there was $746,760 in delinquent balances in wastewater bills.
Unpaid bills are now taking a toll on the town. With less revenue to cover wastewater's debt load, the town has borrowed from the general fund. A loss of revenue from non-paying customers also puts pressure on the town to increase sewage rates to meet loan obligations, currently $2.5 million per year. That puts a heavier burden on paying customers, Marriotti said.
"It bothers me a lot," Marriotti said. "Therefore, I feel compelled to do whatever I can do to get these people to pay."
The town has already tried different ways to collect wastewater debt. Calls, letters and past-due notices have been used in addition to Arizona's Debt Setoff Program. The program allows participants to intercept Arizona income tax refunds or lottery winnings of $600 or more from those who owe debts.
"We've been doing that for several years and that's been successful, but it hasn't solved our issue," Marriotti said.
The town has also been using collection agencies. Unpaid bills will stay with collection agencies six months to a year, but if they remain unpaid the town will take them back and file a small-claims lawsuit.
Cutting them off
With limited success in collecting the debt, the town is now exploring options on terminating sewer service. Marriotti said it is not easy to terminate sewer service, which essentially involves physically plugging the lines. The $30,000 in the 2020 budget is intended to flesh out and implement a plan to plug individual lines and address legal questions.
"I hope just notifying people that their sewer service will be terminated is enough to motivate them to do the right thing and to pay," Marriotti said. "We don't want to do it. I don't want to sue people. I don't want to send people over to collections, they're our residents. I don't want to damage people's credit, but I also can't, in good conscience, make the majority of the people who are paying subsidize the utility on behalf of those people who aren't paying. This is really an equity issue."
When the town began billing sewer and water separately in 2014, there had been confusion surrounding the change. Originally, the private Sahuarita Water Company was contracted to bill for sewer on behalf of Sahuarita Wastewater Utility, but the contract was not renewed. Because of the confusion during the billing system change, the town worked with many of the customers by waving late fees and offering payment plans, Marriotti said.
However, a number of the unpaid bills belong to customers who stopped paying during the 2014 billing change, Marriotti said. And those bills have continued to grow.
While the town still offers a payment plan, Marriotti said he would be hesitant to extend it to these same customers given the past abuse of the program.
"Early on in the process we were working with customers," Marriotti said. "We were extending payment plans for a couple of years even to try and work with people. We're years removed from that timeframe now. At this point, I don't know what more we can do."
While Marriotti said it would be better to get back some money rather than none, he couldn't offer it to people who have already accepted it and then defaulted on making the agreed to payments. In some cases, people will sign up for a payment plan to avoid being sued, starting the process all over again, he said.
The sewer termination efforts are the next step in the town's attempts to force customers to pay for services. Marriotti said he hopes the town will have a process in place early next fiscal year, which starts July 1, but there will be plenty of time for the public to be aware of sewer termination efforts before it begins.
"Part of our effort will be a pretty good communication effort to let people know about the sewer termination efforts," he said. "We're going to try and get that out and, hopefully, if people understand that the town's got a program in place where we're going to start terminating services, again we don't want to, hopefully, just getting the word out would be enough to motivate people to pay."