Lynchburg utility disconnections will resume in March after being suspended for a year.
Since last March, the number of Lynchburg residents behind on water payments has climbed steadily, resulting in hundreds of thousands of dollars owed to the city by delinquent accounts.
New state legislation that took effect in November put a moratorium on cutoffs and prohibited the charging of late fees, interest or penalties to overdue accounts, but because the amount owed to the city, totaling about $727,000, exceeds 1% of the $41 million operating budget of the Department of Water Resources, Lynchburg is eligible for an exemption to the moratorium.
On Tuesday night, Lynchburg City Council unanimously voted to verify the arrearages and allow city staff to resume disconnection of water service for nonpayment.
In December, more than $344,000 was made available to the city through the state’s COVID-19 Municipal Utility Relief Program to assist businesses and residents with sewer and water payments. Director of Water Resources Tim Mitchell said about $258,000 still is available.
Mitchell said a mailer has been sent to all delinquent account owners with information about applying, as well as details of a new repayment plan, which would amortize the repayment of debt over several months. Customers can contact billings and collections to set up their plan and get more information based on their situation.
Currently, the department has allocated about $86,000 of its available funds after receiving more than 360 applications, a fraction of the more than 2,300 delinquent accounts that are eligible to receive this aid, and are more than 30 days overdue with bills of higher than $35.
“If we don’t resume cutoffs, our concern is that customers are going to continue to get further and further behind and it will be much more difficult to get out of the hole that they’re in,” Mitchell said.
He and councilors, including At-large Councilman Randy Nelson, expressed concerns that despite available aid, the bulk of residents falling behind on payments have not applied for aid.
While the $344,000 in aid can only be applied to water and sewer bill relief, the repayment plan can be used to payback water, sewer, stormwater and trash bills. Initially, the aid was only available through Jan. 22, but an extension allows the city to offer it on a first-come, first-serve basis until December 2021.
Chief Financial Officer Donna Witt said it is likely the funds will run out by February, and encouraged residents to apply as soon as possible. Customers must certify that their inability to pay has been affected by COVID-19 in order to receive the aid.
Customers participating in repayment plans will not be cut off as long as they remain current with their plan, according to Mitchell.
Another letter will be sent out this week with this same information, as well as a notification that cutoffs will resume in March and correspond with the customer’s due date for their March payments.
Disconnections have been on hold since March 2020, and by October, 1,186 accounts had been delinquent for more than 60 days, the amount of time that usually would make customers eligible for a disconnection. The late customers owed a total of $283,874 to the city, according to a November report given by Chief Financial Officer Donna Witt.
Before the coronavirus pandemic, the city generally saw about 250 to 350 delinquent accounts at any one time.
While these numbers include only active accounts behind on water payments, Mitchell said if the department totals all accounts that are more than 30 days late on water and sewer payments, more than $700,000 is owed to the city.
Mitchell said the department hopes to see another surge in applications for aid after the second mailer goes out, and the information is also available through the department’s social media and online.
Some assistance is still available through various city nonprofits, such as Lynchburg Community Action Group and Interfaith Outreach. Although the Coronavirus Aid, Relief, and Economic Security Act funds available for utility assistance through these organizations expired in December, Witt said, there are other funding streams available.
On Tuesday night, Mayor MaryJane Dolan said she had spoken with Interfaith earlier that day, and confirmed they have funds that are still available.
Witt hopes resuming disconnections will drive people to accept the available aid and set up repayment plans. She said cutoffs are necessary to incentivize further action.
“We are going to try to work with them any way we can, but we are really not doing them any favors by not trying to help them pay their bills ... the more that grows, the harder it’s going to be to pay it off,” Witt said. “They are still going to have a bill that they need to deal with, and the longer that goes, the higher it is.”