Lawsuits and audits leave water customers ‘in limbo’ in Opa-locka
■ The city of Opa-locka is facing criticism for holding onto customers’ security deposits when they attempt to close out their water accounts.
In September, Raul Fernandez sold an apartment building that he owned on Sharar Avenue in Opa-locka and asked the city to return his $1,000 security deposit for water service. Five months later, he says he still hasn’t gotten it back — but he has received an unexpected bill for $286,000 in past-due water fees that the city says he owes on a different complex.
“No explanation,” Fernandez said. “Are they trying to bankrupt us?”
Fernandez isn’t alone in waiting to get deposits back while the city reviews his accounts. A whistleblower lawsuit filed last week by an eight-year employee of Opa-locka’s water-billing department, Ann Barnett, alleges that since February 2019 more than 400 water customers have requested deposit refunds that “were never processed.”
The lawsuit suggests that collection has been prioritized over complaints by water customers who have complained about billing issues.
“Hundreds of customers requested reviews of their accounts with complaints [about] billing from 2016 to 2019,” Barnett’s lawsuit says. “The direction was to place them on a pile and not address them because the city had determined that the priority was billing.”
Barnett claims the city retaliated against her for raising concerns about the practices, including by reducing her hours and denying her medical leave.
The city manager denies the accusations, which mark the latest chapter in a years-long saga over water bills in a city that has been under state financial oversight since 2016. That year, Opa-locka relinquished control of its water-billing system amid reports of overcharging and corruption, including employees shaking down residents for cash and bills being waived for politically connected customers.
The Miami Herald revealed at the time that the city, then on the verge of financial collapse, had spent about $1.7 million of customers’ security deposits, depleting an account meant for residents and businesses.
“The city just insists on treating the customer deposits like its own money,” said Michael Pizzi, an attorney for Barnett and for the plaintiffs in a classaction lawsuit filed in 2017 over the city’s water bills.
In a statement to the Miami Herald, City Manager John Pate said he “adamantly denies” Barnett’s allegations.
“It is unfortunate [that] such frivolous complaints are filed against the city at a point where we are healing and rebuilding relationships with our stakeholders,” he said.
CITY ‘INUNDATED’ WITH REQUESTS
Pate said the city has cleaned up its billing system with help from MiamiDade County, which has replaced faulty or nonfunctioning meters throughout the city. Now, he said, before returning the deposits, the city is auditing all of its water accounts to determine if customers still owe money for past usage.
Pate said Opa-locka has been “inundated” with requests to close out water accounts. And given the lengthy history of water-billing troubles, he said, he “thought it was essential to ensure that, when individuals ask for their deposits back, we audit their accounts.”
Pate said the city has been careful to charge customers accurately for the water that they use, focusing on readings from the new meters installed by the county.
As for Fernandez, Pate said the city and the county have been working “diligently” with him to address his concerns, but maintained that Fernandez still owes the city a significant amount for past-due bills.
“His accounts are accurate,” Pate said. “He just does not want to pay those bills for some apparent reason.”
CLASS-ACTION LAWSUIT SET FOR TRIAL
Under a contract between the city and the county, Opa-locka has been working to pay off about $5.5 million in debt to Miami-Dade since 2017.
At the same time, the city has over $7 million in uncollected water bills, a financial consultant told the city commission in December.
The ongoing class-action lawsuit over Opa-locka’s water billing, though, has complicated the city’s attempts to collect on unpaid bills.
Last year, after Opalocka placed liens on some accounts, the plaintiffs in the case requested a temporary restraining order, saying the bills were still in dispute. In response, the city said in court filings that the liens were legal and hadn’t been placed on any of the plaintiffs’ properties.
At a city commission meeting on Feb. 10, Pate cited the lawsuit as a road block after Mayor Matthew Pigatt asked how the city plans to address collection concerns.
“Our collection attempts, as we tried to do them, have now been intermingled with the current class-action lawsuit,” Pate said. “All directions lead to this current litigation.”
Pate told the Herald the city is continuing to audit water accounts and “preparing liens pending the outcome” of the lawsuit.
Last month, Florida’s Third District Court of Appeal upheld a lower court’s certification of a class of water customers who were overbilled, setting the class-action lawsuit over the city’s water billing practices on a path toward trial.
Separately, the appeals court rejected the creation of a separate class of customers who never got their deposits back, saying the city can legally use that money as it pleases until service is discontinued. Because the plaintiffs in the case haven’t closed out their accounts, the court ruled that they “have suffered no damages” specifically related to their deposits.
Miami-Dade County Circuit Court Judge Michael Hanzman said this month that a trial in the case would begin in September with “no continuances” to a later date.
The case could leave Opalocka on the hook for millions of dollars for excessive bills that were based on estimates and faulty meters.
In the meantime, the city is struggling to collect the bills that it says are due and reconcile those accounts that its customers say should be closed out.
“There are literally thousands of residents that have kind of been in limbo,” Pigatt said at the Feb. 10 meeting. “At what point do we get clarity?”