A recently established advisory committee voted on Wednesday in favor of a City Council ordinance that would prohibit the Sewerage and Water Board from disconnecting service or sending debt to a collections agency if the customer is disputing an unpaid bill.
The ordinance still has to be approved by the full council. But that appears likely, since six out of seven council members are co-sponsoring the ordinance. The seventh, Councilman Joe Giarrusso, is also supportive of the ordinance, according to a spokesperson.
If passed, the ordinance would represent the first time the council is using its new powers to regulate SWB’s billing practices. Earlier this summer, the state legislature passed a bill that granted the City Council the power to regulate the Sewerage and Water Board’s billing policies. That law went into effect Aug. 1.
The law required the council to create a working group — called the SWBNO Billing Ordinance Advisory Committee — made up of council members, state legislators, a representative of the Sewerage and Water Board and a representative of Mayor LaToya Cantrell. Wednesday was the first meeting of that new advisory committee.
The Sewerage and Water Board has faced consistent billing issues in recent years. Examples of outrageously inaccurate bills have been widely covered by local media. Recently, some residents have claimed that unpaid bills were being sent to collections agencies, even though they were in the process of disputing the bill.
“Individuals who were disputing their bills were either having their service shut off by the Sewerage and Water Board or they were being sent to collections,” Councilwoman Helena Moreno said on Wednesday. “We thought this was an inappropriate act to take while someone is still in the dispute process.”
Once a collections agency is involved, it can affect a person or business’ credit score.
“The detrimental impacts of being reported are very, very serious,” Councilman JP Morrell said on Wednesday. “Credit is also how you determine if you can even get a house or an apartment or a car.”
When these allegations came to light, the Sewerage and Water Board said it wasn’t the “policy or practice” of the agency to send disputed bills to outside collections agencies. But Moreno said her office is still receiving those complaints.
“I know there’s been a little back and forth with Sewerage and Water Board sending us a letter saying this isn’t happening,” Moreno said. “Yet we’re still hearing from customers who said that it did.”
On Wednesday, the agency reiterated that under current policy, disputed bills aren’t sent to collections agencies.
“It is neither policy nor practice at the Sewerage and Water Board of New Orleans (SWBNO) to send a customer’s account to an external collection agency when it is under dispute,” spokesperson Grace Birch said in a statement to The Lens.
Birch explained that an unpaid bill greater than $50 for longer than 60 days is eligible for a delinquent notice from the agency.
“However customers are able to request a high bill investigation, a hearing or a re-hearing to be exempt from the collections process.”
If the bill isn’t deemed exempt, the agency begins to reach out to the customer to make payment arrangements. If the bill is still unpaid 30 days after that, “customers may face disconnection, meter removal, an account closure and / or as a last resort, referral to an outside debt collection agency,” Birch said.
The City Council only recently gained the power to regulate the Sewerage and Water Board’s billing practices. Earlier this year, Morrell worked with state Rep. Stephanie Hilferty to present a bill that would have given the council full regulatory authority over the Sewerage and Water Board, similar to its current powers over Entergy New Orleans.
The bill was introduced during a period of high tension between some council members and Mayor LaToya Cantrell. Cantrell, who serves as the President of the Sewerage and Water Board, was strongly opposed to the bill. She argued the bill represented a direct attack on her leadership and would only add “bureaucratic red tape” to the process.
With both Cantrell and Morrell lobbying at the legislature, the bill was rolled back to something of a middle position. Under the final version of the bill signed into law, the council only gained the ability to pass laws related to Sewerage and Water Board billing issues, rather than total regulatory control. The bill also gives the council power to open investigations and subpoena the agency for records.
Both Morrell and Cantrell claimed victory in that dispute.
The new law requires the council to create a “working group” — the SWBNO Billing Ordinance Advisory Committee — to consider ordinances related to the Sewerage and Water Board before the council can pass them. Although it appears the council would be able to pass those ordinances whether or not the working group votes in favor.
Now that Wednesday’s ordinance on disputed bills has cleared the advisory committee, it moves onto the full council, where it will likely be approved.