Spokane lawmakers put on hold proposal to forgive unpaid utility bills totaling $450,000

Spokane lawmakers hit pause Monday on a measure that would have erased roughly $450,000 in overdue payments and late fees for sewer, water and trash service within city limits during a 14-year period.

Spokane City Councilwoman Candace Mumm asked her colleagues to table the proposal for a month in an effort to give delinquent payers more time to settle their accounts with City Hall. Mumm said she did so after receiving the list of 58 businesses that had outstanding utility charges from city officials and approaching Mayor Nadine Woodward’s office about potentially pursuing another chance to collect.

“I started the conversation with the mayor’s office, to see if the mayor would be interested in joining the council in sending a notification to these businesses and give them one more chance to pay back the citizens,” Mumm said.

The city’s utility collections staff came to lawmakers in December with the proposal, arguing the debt accrued would be difficult to collect because it was older than 5 1/2 years. Washington state law limits legal debt collections to within six years of delinquent payment. The debts that would be forgiven were accrued between 1999 and 2013, with most more than a decade old, according to the city.

Mumm said she believed some of the businesses would repay if notified, even if the city had already hinted the debt would be forgiven.

“It would give them one more chance to clear their name from a bad debt and retain their reputation in the community as good citizens and ethical corporations,” she wrote in a follow-up text message.

Spokane is also set to switch to a new utility billing software system, and staff wanted to write off old debt before it was entered into that system.

Mumm said she’d received word from city staff that old methods of billing that had allowed debts to mount had been revised in recent years, including sending utility bills not only to leaseholders but also property owners to make them aware of nonpayment sooner.

The proposal would also eliminate the debt of 116 residential accounts, according to the city. While there are more residential accounts on the hook for unpaid balances, commercial accounts make up the majority of the $297,000 in utility payments that would be forgiven under the proposal. The rest of the debt is $153,000 in unpaid late fees.

The largest debt owed belongs to West Terrace Golf at roughly $55,000, as reported Monday in The Spokesman-Review. That debt was transferred from previous owners of Fairways Golf Course, privately owned links in Cheney, to its new owners, said Bob Dunn, an attorney representing the new ownership group in a lawsuit against the city tied to water rates.

“As a result, our guys have tried to dig themselves out of this,” Dunn said.

Marlene Feist, acting communications and marketing director for the city, told lawmakers Monday the amount appearing on the city’s books that was owed by West Terrace had already been negotiated with the property holder. While that amount accurately reflects what the city believes it’s owed, she said in an interview Tuesday, it’s an example of a payment the city should not expect to be paid back if it pursues additional debt notifications.

The lawsuit from the golf course owners alleges Spokane has imposed unlawful charges for water service on the West Plains, a question that is now the subject of a $30 million, class-action lawsuit. The city argues its charges are supported by case law and legal decisions in other parts of Washington.

Dunn said if the city did forgive the previous debt, it wouldn’t affect the lawsuit underway, which is focused on the water rate the golf course has been ordered to pay by the city. Mumm said the decision to delay a vote on the debt forgiveness this week was not tied to litigation underway between Spokane and Fairways Golf Course.

Spokane County Superior Court Judge Julie McKay is considering arguments whether to settle the lawsuit before a trial, which is currently scheduled for June in the case.

Mumm said she hoped the council could revisit the debt forgiveness measure next month.