Residents of Beaumont are grappling with the news of impending water rate increases while witnessing local businesses having thousands of dollars in unpaid water bills written off by the city.
The Beaumont City Council, in a meeting Sept. 17, agreed to write off over $53,000 of a total $91,829.01 in debt from various accounts deemed “uncollectible” by the city’s financial team.
Among the accounts are those belonging to several prominent businesses, including ALH Properties Best Western Jefferson Inn, which owes $9,410.21, and the Beaumont Housing Authority, which owes over $8,500. These sums, along with other debts surpassing $1,000, were flagged as unlikely to be recovered. City Manager Kenneth Williams presented the accounts to council as “housekeeping items,” though the financial implications of the decision weigh heavily on the public questioning why these businesses aren’t held accountable like residential consumers are.
Councilmember Randy Feldschau voiced the concern of many Beaumont residents, questioning why well-known commercial entities like Best Western Jefferson Inn and the Beaumont Housing Authority were allowed to default on their bills.
“Individuals, I get,” said Feldschau, “but I’m struggling with these. We know where the hotel is. Can we drive over there and cut their water off?”
City Chief Financial Officer Cheryl Ray explained that cutting off water to businesses, especially those housing multiple tenants or individuals, is not a viable option. Cutting off service to residential clients, however, is still an undertaking the city manages – with a host of water customers inquiring for service reconnection just weeks prior as water cut-off day hit the city Aug. 20.
“When we tried to do that in the past… we’re talking about individual citizens that live within those complexes, you can’t just shut their water off,” Ray responded. She acknowledged the frustrations surrounding the uncollected balances but stated that, for now, the city had no other choice but to write off these debts.
Ray mentioned that she would explore new methods of collecting outstanding payments that hadn’t been tried previously. However, she also made it clear that, for the time being, these accounts would need to be written off.
The discussion of alternative collection strategies sparked a lively debate within the council. Councilmember Taylor Neild, familiar with some of the businesses involved, suggested turning the accounts over to the city’s legal team for potential collection. Beaumont City Attorney Sharae Reed expressed her willingness to take on the challenge, though she was quick to point out that there were legal complications with how the city has billed for unpaid utilities in the past.
“There are some very specific requirements for when you collect for nonpaid utilities,” Reed explained. “In the past, our department has not always billed in accordance with that statute, so it may not be feasible to collect all of them because we haven’t billed properly, but I sure like a challenge.”
Part of the problem, Ray pointed out, is that some entities have 30-day billing cycles, which conflicts with the city’s traditional method of billing. The city’s billing system has reportedly now been updated to accommodate the different requirements, but that doesn’t erase the historical debts that have accumulated due to these discrepancies.
Feldschau pressed for reassurance that the problem had been corrected moving forward, asking, “So I’m assuming we’ve identified the problem, corrected the problem, and moving forward we’re going to…”
The short answer is not yes, Reed interjected, hesitant to confirm that all issues had been fully addressed, simply stating, “I’m not confident in saying yes to that.”
While Williams tried to downplay the situation as a routine accounting issue, Ray and Water Customer Service Manager Jeff Downs both acknowledged the need for the city to develop more effective methods for collecting outstanding utility bills.
“We were kinda kickin things around this year to try and come up with how we can try to recoup some of that revenue,” Downs said, signaling that the city is exploring new strategies. To date, the city has not enacted old strategies, though, such as placing a lien on properties with defaulted utility bills.
When asked whether the city had placed liens on any of the properties with outstanding utility debt, Ray admitted that no liens had been placed. Despite a section in the Texas Local Government Code that grants cities the right to place liens on real property for unpaid utility services, city staff advised no ordinace pertaining to liens for utility debts could be found.
Among the businesses with significant alleged unpaid bills is the Beaumont Housing Authority (BHA), which reportedly owes the city nearly $10,000. BHA has 406 active accounts across various addresses, the city reports, and, while “most” of these accounts are regularly paid, the question still unanswered by city officials is: How is it that the Beaumont Housing Authority is allowed to accumulate such large debts without repercussions? In contrast, individual citizens would face swift penalties for much smaller delinquencies.
Feldschau additionally raised a concern shared by constituents: Why is there a discrepancy between how businesses and private citizens are treated when it comes to unpaid water bills? This failure to collect from large commercial accounts is compounded by the fact that citizens will soon face rate hikes to offset the city’s financial shortfall. Water rates are expected to rise by 4%, sewer rates by 8%, and there will be an additional monthly charge of $1.75 for solid waste. For many residents, the knowledge that these increases are, in part, a result of the city’s inability to collect outstanding debts, is a hard pill to swallow.