Water and sewer board changes its policy after lawsuits
RUSSELLVILLE — The city’s water and sewer board has reversed a decision made about 18 months ago that left landlords responsible for any unpaid utility bills by former tenants.
Eric Hill, general manager of the Russellville Water and Sewer Board, said the issue began in late summer of 2024 when the system saw an unusual jump in unpaid bills tied to rental properties.
“In one month, we lost over $10,000 in bad debt,” he said. “That was the worst month I’d ever seen.”
Hill said the loss averaged close to $2 per customer. He said the board’s first concern was finding a solution which would not shift the burden for cover those unpaid bills to paying customers.
“We were trying to figure out how to fix it and not pass that cost on,” he said.
Hill began researching how other utilities across Alabama handled unpaid bills. He contacted multiple systems and reviewed their policies. Many of them placed the responsibility for unpaid bills by former tenants on landlords.
Hill also reviewed past opinions from the Alabama Attorney General’s Office. Hill said he found several that suggested similar policies were allowed, depending on how the utility system was structured.
“There are opinions that apply to water authorities and others that apply to water boards,” Hill said. “We’re not a water authority, so we had to look closely at what applied to us.”
Based on Hill’s research, the water and sewer board adopted a policy requiring past due balances at a property to be paid before service could be restored.
The policy was later challenged in court.
Hill said he first learned something was wrong when a media outlet contacted him in November asking about possible litigation.
“I told them I wasn’t aware of any,” he said. “Two days later, I was served.”
The lawsuits included a class action complaint filed on behalf of property owner William D. Ragan Jr. and others. The complaint named both the water board and the gas board as defendants.
Hill said the legal complaint raised questions for him because the law firm involved had previously done work for utility boards.
“It caught me off guard,” he said. “I had never seen anything like that.”
Around the same time, the Alabama Attorney General’s Office issued Opinion 2026-005. The opinion stated utility boards cannot require landlords to take responsibility for a tenant’s unpaid utility bills.
Hill said a published attorney general’s opinion holds merit, even though it is not law.
“It’s not written in stone, but it does hold a lot of weight in court,” he said.
The AG’s opinion also cited the Alabama Uniform Residential Landlord and Tenant Act, which outlines responsibilities between landlords and tenants. It noted landlords are not automatically responsible for utility payments unless they agree to it in a lease.
Hill said that part of the opinion referenced guidance from another state.
“They used an opinion from Indiana,” he said. “That was surprising to me.”
After learning about the AG’s opinion in December, Hill brought the issue before the water and sewer board. By January, board members decided to reverse its policy.
They also agreed to issue full refunds to customers who had paid past due balances under the policy. Hill said about 73 refunds were issued.
“I’m not aware of anyone else doing full refunds like we did,” he said. “We just wanted to put it behind us.”
At the same time, board members approved new rates and fees to cover ongoing losses from unpaid bills.
