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3 Delinquent Utility Accounts CITY OF CHANHASSEN nOll1v13rke\ BO,llevard POBJx147 Clar!raSSell\¡1r~ 55317 Administration 9522271100 Flx 9522271110 Building Inspections Prone. 9522271180 Fax 9522271190 Engineering 952.2271160 Fax 9522271170 Finance PhJile 952227.1140 Flx.9522271110 Park & Recreation P!wr18 9522271120 Fax 9522271110 Re~re3!'ür! Celller 2310 Coul!er Boulevard PrrJle 952.2271400 Fax 952.227.1404 Planning & Natural Resources PhJI~e 952 2271130 Fax 9522271110 Public Works 1591 Park Read PrICIÌ'! 9522271300 ~lx 9522271310 Senior Center P1WlIf: 952 2271125 Fal ~52 2271110 Web Site The City of Chanhassen · A rowing /~ "'-" MEMORANDUM TO: Mayor City Council Bruce M. Dejong, Finance Director O~ October 14, 2004 FROM: DATE: SUBJECT: Certification of Delinquent Water and Sewer Accounts Chanhassen city ordinances provide two methods for collection of delinquent water and sewer accounts. The ordinance states "In the event any water service is not paid with three (3) months after the time it is rendered, the city council may recover said amount in an action brought in any court of competent jurisdiction, or in the alternative, may certify the amount due together with penalties to the county auditor to be collected with other real estate taxes levied against the premises served." The procedure for collecting the water and sewer bills is that a bill is generated once a quarter for each account. If not paid, we then send a letter in the fall (August through October, depending on which section the account is in) notifYing the property owner of the delinquency and the consequences of non-payment. They are allowed to have a public hearing to dispute the certification. The list is then sent to the county by December I. The list of delinquent properties is available in the Finance Department. There is one party that wants the City Council to review their situation. This case involves a delinquent account where the property was purchased by another party. There was no escrow established at the time of closing and the prior owner has not paid the delinquent amount. While this situation is regrettable, our recourse is still tied to the property as established in MN Statutes 116A.22. Current practice is to certify the amount due to the property taxes. The city does not go to court on these small amounts. There are 168 accounts with a total value of $59,117.00 to be collected this year compared with 129 accounts on the list with a total dollar amount of $60,696.08 last year and 141 accounts with a value of $67,174.58 in 2002. I believe that at least several accounts will be paid in full by the time that the final list is established in December. The other accounts will be certified to the county for collection with a fee of 20o~ ($20 minimum) added for the administrative costs incurred. Enc: List of properties and delinquent amounts MN Statutes 116A.22 & Request of David C. Owen Minnesota Statutes 2004, 116A.22 MinnGsota Staty tes 2004,T ab IGmQfChapters Page 1 of 1 L1ble-º-Lc()nlGntsJQLCllªpter 116A 116A.22 Service charges; a special assessment against benefited property. Charges established for connections to and the use and availability of service from any water or sewer or combined system, if not paid when due, shall, together with any penalties established for nonpayment, become a lien upon the property connected or for which service was made available. On or before July 1 in each year written notice shall be mailed to the owner of any property as to which such charges are then due and unpaid, stating the amount of the charges and any penalty thereon and that unless paid by October 1 thereafter, or unless a hearing is desired on the question whether such amount and penalty is properly due and payable, the same will be certified, extended, and assessed as a tax or special assessment upon the property for collection with and as a part of other taxes in the following year. Any property owner requesting notice shall be notified of the time and place of such hearing, and the county board, or the commission appointed pursuant to section 116A.24 shall then hear all matters presented by the owner and determine the amount and penalty, if any, which is properly due and payable, and shall cause the same to be certified, extended, and assessed as stated in the notice. The county board or the commission may also provide by resolution for discontinuance of water services to any premises in the event of nonpayment of charges for any water or sewer service provided to the premises, upon reasonable notice to the owner and opportunity for hearing upon any claim that the charges are not properly due and payable. HIST: 1971 c 916 s 22; Ex1971 c 48 s 45; 1973 c 322 s 21; 1986 c 444 Copyright 2004 by the Office of Revisor of Statutes, State of Minnesota. http://www.revisor.leg.state.mn.us/stats/116A/22.html 10/14/2004 Page 1 of 1 Gerhardt, Todd ___,,_______________..__n_.._____.'__ From: Washburn, Danielle Sent: Friday, October 15, 2004 10:13 AM To: Gerhardt, Todd Subject: 2444 Lake Lucy Road Todd, The delinquent charges that are owing on the account for 2444 Lake Lucy Road were incurred from the prior owner during the period of August 12, 2003 through March 1, 2004. The balance at the time the charges were transferred to Mr. & Mrs. Owen's account was $949.03, but there have been additional late charges added for a current total on the account of $1060.35. In February 2004 we received a request from Edina Realty Title to provide the status of the sewer and water bill for the property. We reported on that status check that the account had delinquent charges through November 17, 2003 of $175.67. We did not receive any other written status requests from Edina Realty Title prior to the closing of the home. When Mr. & Mrs. Owen received their first quarterly billing (May 31,2004), they called to question the previous balance on the billing. I informed them that the charges were from the prior owners for the period of August 12, 2003 through March 1, 2004 and that they should contact their title company to have the balance paid. After that conversation, I entered this note on Mr. & Mrs. Owen's account: June 15, 2004 Account #3780101 - Received a call from the current homeowner stating they would be mailing in the current portion of the bill and are working with the realtor to get the previous balance from the prior owner paid. If any late charges are left on the account, which are on the previous balance, we will remove them once the balance is paid. The next phone calli received from Mr. Owen was an inquiry as to the City's formal procedure for getting the prior owner's balance removed from the account. I informed Mr. Owen that he would need to discuss the situation further with Bruce and transferred the call to him. I have not had any other contact with Mr. & Mrs. Owen since that time. We have received payments from Mr. & Mrs. Owen on June 22, 2004 and September 28, 2004 for the current charges on the account. If you have any additional questions or need further clarification, let me know. Danielle Washburn 10/15/2004 Edina Realty Title www.edinarealty.com City of Chanhassen Utilities P.O. Box 147 Chanhassen, MN 55317 RE: ERT File Number: 416208 Property Address: 2444 Lake Lucy Road Chanhassen, MN 5531 7 Current Owner(s): William L. Butler and Bethany J.C. Butler Please provide us with the status of the Water/Sewer bill on the above referenced property. Indicate the amount due and the dates of service in the space provided below. Account #: Amount due: $_ Any Delinquent Amount: $ Dates of service : Closing on or before May 28, 2004 3í7x()!()O o I'X-~ In'! I J - I 7 -Q '~ Due Date The new owner(s) will be David C. Owen and Lisa K. Owen. Please 0 send your information to: o fax De-mail E 01 NA REALTY TITLE 14451 Highway 7, Su ite 200 Minnetonka, MN 55345 Attention:Sarah Pieper Direct Dial:952-563-3808 Fax:952-563-3819 e-mail:sarahpieper@edinarealty.com Sincerely, Áíd ~J!J) Sarah Pieper Closer ,~. cpp ;~ : Creating Profitable Partnerships CPP North America, LLC 5100 Gamble Drive, Suite 600 St. Louis Park, Minnesota 55416 Corporate Legal Department David C. Owen General Counsel The Honorable Thomas Furlong, Mayor And Members of the City Council City of Chanhassen 7700 Market Boulevard P.O.Box 147 Chanhassen, Minnesota 55317 October 4, 2004 Re: Alleged Delinquency - Utility Services Account #3780101 PI D #25-3490020 2444 Lake Lucy Road Dear Mayor Furlong and Council Members: Please accept this letter as my request to have the matters described herein considered by the Council in advance of the October 15 meeting to certify delinquent balances for collection with property taxes. Backqround My wife Lisa and I purchased our home at 2444 Lake Lucy Road on March 1 of this year. We have lived in the house for seven months. Several weeks prior to our closing we provided the City with notice of the pending purchase and arranged for a final utility audit and meter reading on March 1. We were not informed of any existing balance or delinquency of utility charges at that time nor at any time prior to the date we received our first utility bill (approximately June 1, 2004). Our June 1 utility bill, a copy of which is enclosed, reflects charges for services provided from March 2 through May 17 in the amount of $75.16. To our surprise, the bill also included past due charges and late fees in the amount of $862.74. These charges were accrued by the previous owner of the property, William Butler. Immediately upon receiving the bill, we contacted the City, paid the current balance, and asked to have the prior past due amount removed from our future bills. We were told that removal of the prior amounts was not possible as the "bill went with the property". Since that time we have continued to pay for all services provided since we purchased the property, but we have not paid for prior services or associated late fees. In addition, we have remained in contact with the City and we have attempted to resolve the matter through our closing agent and real estate broker. We have attempted to reach the prior owner many times by telephone and mail. To date, we have received no response indicating that any party associated with the closing will accept responsibility for the failure to discover the delinquent utility charges. The prior owner has not responded at all. As of our most recent bill, for the period ending August 16, 2004, delinquent charges and late fees have increased to $1,060.35 and late fees continue to be assessed at the rate of approximately $110.00 per billing period. Basis of Dispute: We dispute the validity of the City's claim against us based on the following: 1. The City does not have the authority to transfer fees for utility services to an innocent third party who did not contract for, or receive, those services. 2. The City failed to inform us of the presence of delinquent charges even though we provided advance notice of a transfer of ownership and arranged for a final meter reading. 3. The City was negligent in allowing the account to accrue well over $800.00 in delinquent charges and late fees without taking reasonable efforts to collect the delinquency such as temporarily terminating services or imposing a lien against the property. 4. The City was negligent in failing to provide a prospective purchaser with notice of the delinquency through the imposition of a lien or other notice discoverable upon review of the associated land records. 5. The City has not attempted to collect the delinquent amount from the party who is primarily and contractually responsible and cannot, therefore, seek to collect from a subsequent owner who may, at most, have secondary or tertiary liability. Lisa and I thank you for you consideration of our dispute. We understand that this is an unusual circumstance and that there may not be procedures in place to resolve this type of dispute in the normal course of business. We hope, however, that you will recognize the validity of our position and that you will not persist in collection efforts to extract these charges from us. With best regards, {)~'ICJC' ----. David C. 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Parcel # District #1 25-0500130 25-0500190 25-08001 00 25-0800190 25-1730010 25-1800220 25-1820310 25-1820420 25-1820500 25-1860180 25-1860230 25-1860330 25-1870050 25-1870230 25-1870370 25-1870660 25-2010180 25-2040160 25-3450660 25-3450960 25-3500080 25-3500271 25-443001 0 25-4430030 25-4530260 25-5300380 25-5500340 25-555001 0 25-5550220 25-7600041 25-7900080 25-7950110 25-81 00030 25-8130150 25-8140180 25-8140370 25-8190020 25-8210120 25-8230020 25-8460020 25-8540260 25-8970030 Amount 169.96 187.21 728.74 162.71 3,412.21 756. 16 324.43 993.04 1,347.08 397.01 965.65 1,230.41 763.38 684.25 601.45 129.01 68.79 438.38 744.34 180.49 189.07 484.20 215.59 703.42 1,433.20 49.13 96.18 136.48 489.65 260.75 629.80 343.79 161 .44 880.85 114.44 405.42 31.55 1,293.97 808.19 38.21 47.07 1,540.58 District #2 25-0125600 25-0790020 25-0790030 25-1600230 25-1600280 25-1600810 25-1601260 25-1601260 25-1601550 25-1601610 25-1620170 25-2000160 25-2000220 25-2000370 25-2000870 25-2020150 25-2020170 25-2020300 25-2020570 25-2020830 25-2021270 25-2021350 25-2021360 25-2030140 25-2031000 25-2300070 25-2620530 25-2730300 25-2730470 25-2730610 25-3000270 25-3000390 25-4200030 25-42001 00 25-4200250 25-56401 90 25-564021 0 25-5640330 25-6710010 25-6710090 25-6840010 25-7550010 25-7550130 93.29 878.42 49.50 404.45 355.28 421.90 203.63 191.03 121.52 666.82 143.65 311.10 975.37 90.17 304.91 189.66 192.59 313.91 353.18 97.86 544.48 31.06 812.78 323.88 370.82 1,023.97 612.46 623.86 751.26 564.05 748.79 233.81 43.88 468.24 609.79 439.31 50.48 397.54 99.30 645.84 31.55 261.37 417.54 25-7550420 515.75 25-7551290 372.50 25-8530020 223.97 25-8590060 239.35 25-8590080 912.65 District #3 25-0050600 31.55 25-0053000 38.21 25-009031 0 85.56 25-0362700 31.55 25-0363000 546.67 25-0363700 166.31 25-0363800 49.25 25-0600040 49.44 25-071 0020 45.53 25-0880480 312.91 25-0880600 366.10 25-11 00080 170.51 25-1150010 31.55 25-1150020 31.55 25-1200010 51.10 25-1200080 49.37 25-1550010 85.56 25-2580010 467.21 25-3320190 53.58 25-3420010 31.37 25-3420050 31.37 25-3420080 31.37 25-3420090 31.37 25-34201 00 31.37 25-3420120 31.37 25-3420130 31.37 25-3420140 31.37 25-3420150 31.37 25-3420160 31.37 25-3420170 31.37 25-3420200 31.37 25-342021 0 31.37 25-3420220 31.37 25-3420230 31.37 25-3420240 31.37 25-3490020 941 .78 25-3490380 381.80 25-3510240 363.83 - 25-3530070 25-3800030 25-4060300 25-4190010 25-4500010 25-4800010 25-4810230 25-4820040 25-4950120 25-4950210 25-4950470 25-5050300 25-535001 0 25-5670160 25-6030330 25-6040030 25-6040050 25-6100010 25-6150520 25-6380040 25-6380160 25-6390160 25-6440080 25-6500150 25-6600190 25-6600210 25-6660060 25-666011 0 25-6730010 25-8481310 25-8481330 25-8481470 25-8481650 25-8481730 25-8481880 25-848221 0 25-8660330 25-8880290 25-894001 0 65-4780090 48.59 119.40 333.68 47.95 84.41 173.35 966.25 396.95 1 06.44 336.77 891.4 7 190.63 756.20 518.24 73.47 127.32 135.24 31.55 394. 1 0 48.48 407.58 86.78 50.53 462.41 232.20 518.30 537.52 175.51 640.24 80.04 37.74 71.79 134.38 234.29 114.97 53.65 926.42 234.64 52.02 66.46 $ 59,117.00 **revised as of 10/13/04** **total of 168 accounts outstanding**