T he village of Whitehall has developed a plan it hopes will allow it to recoup delinquent water rates while avoiding the need to shut off service to some users.
The board passed a resolution at last week’s meeting to enter into a confession of judgment with users who are willing to make monthly payments but cannot pay off their debt by the September deadline imposed earlier this spring.
The decision is part of an effort by the village to recoup unpaid water bills from users who reside outside of the village.
Initial efforts to collect have had some success, but nearly two-thirds of users have yet to pay their bills in full and at least one-third have to make any payment.
Officials believe the new plan will enable people who can’t pay off the balance by the Sept. 30 deadline to comply, while at the same time avoid costly litigation.
“The goal the village has is to collect the money we are owed and it’s not going to do us any good to shut off the water and not collect,” said Mayor Peter Telisky. “If we shut off the water and put someone out of business, the chance that we collect is not very good.
My particular feeling is this is what we should do.”
A confession of judgment is a written agreement in which a defendant (in this case, the delinquent water user) admits liability and accepts the agreed-upon damages which they must pay to the plaintiff (the village). If the defendant does not pay, it is filed as a court judgment against them.
Fit the situation
“They are perfect for this kind of situation,” said Erika Sellar Ryan, village attorney, adding they are used frequently in Medicaid liens.
She said confessions of judgment can save both the village and the debtor money because it avoids the need for litigation. If the debtor were to lose a judgment in court, they would be responsible for the village’s legal costs and would have to pay that and their debt immediately.
The terms of the judgment are determined by the board of trustees. They establish the time frame for repayment and can establish an interest rate–which according to state law can’t exceed 9 percent–if they see fit.
“It’s like renegotiating to pay a credit card bill,” said Sellar Ryan.
The board agreed upon a term of up to three years, meaning anybody who enters into a confession of judgment with the village will have a maximum of three years to pay off their balance and any interest that accrues.
The duration of payments will be contingent on the size of the balance. For instance, someone who owes $2,000 will likely be given less than three years to pay off their balance whereas someone who owes $17,000 is more likely to be given the full allotment of time to pay off the debt.
It will be up to the debtor to contact the village and its attorney if they wish to enter into a confession of judgment.
‘An honest mistake’
Shaki Bhatti, who runs the Budget Inn and has a balance exceeding $16,000, attended Tuesday’s meeting to address his bill.
“I made an honest mistake. I thought the bill went to the county,” Bhatti said. “I need some help. The money is just not there.”
Bhatti said it was unlikely he could pay off his debt by the Sept. 30 deadline but said he could make monthly payments of up to $500 and may arrange for a confession of judgment.
How many additional users would agree to a confession remains to be seen. Officials conceded that some users may never pay.
The new plan did not sit well with everyone on the board. Ken Bartholomew was the one trustee to vote against the measure.
“I have an easier way to make them pay: Shut the water off,” he said. “Shut the damn water off and they’ll pay.
“No one in this village has sympathy for them. People ask me all the time: When are we going to shut off the water.”
If users do not pay, or don’t enter into a confession of judgment, the village is expected to carry through with their plans to shut off water.
If they enter into a confession of judgment and don’t abide by the terms, their water will be turned off and they would likely face the applicable legal repercussions.
In March, the village discovered that a number of water users who reside outside of the village hadn’t been paying their water bills.
At the time it was estimated that the village was owed more than $142,000.
Part of the problem is the village has no authority to re-levy the bill onto a user’s property taxes if they live outside of the village. Users in the village who don’t pay their water bills have their balance levied onto their taxes at the end of the year.
To compel the external users to pay their bills, the village decided in April to send a letter to delinquent users warning them if they didn’t pay their bills in full by Sept. 30 their water service would be terminated.
The letter also stated they had 30 days from the time they received the letter to notify officials of their intent to pay.
As of last Tuesday’s meeting, officials said a half dozen people had paid their bills in full, five others had made some payments or notified them they would pay in full by the deadline, and a handful of other have called to express they would pay, but had yet to put anything in writing.