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Home My WebLink AboutPO 6016: CODE OF ORDINANCE AMENDMENT - IMPOSITION OF A LIEN ON OWNER'S PROPERTYinteroffice MEMORANDUM To: Mayor, City Council, and City Manager From: Valecia R. Tizeno, First Assistant City Attorne Date: July 24, 2009 Subject: P. O. No. 6016; Council Meeting July 28, 2009 Attached is P. O. No. 6016 amending Chapter 110 (Utilities), Article II (Water), Division III (Service Charges and Billing), of the Code of Ordinances by adding a new section 110-99 providing for the imposition of a lien on an owner's property, other than homestead or rental property, and providing a notice requirement for delinquent bills for water utility service. Attached is Section 402.0025 of the Texas Local Government Code, which gives municipalities authority by ordinance to impose a lien on certain owner's property for delinquent bills for utility service to the property. VRT:gt Attachment ;~~ z.po6016_memo i i r § 402.002 LOCAL GOVERNMENT CODE ordinance, or resolution of the governing body of the municipally owned utility. (d) The municipality may require water works cor- porations, gas companies, street car companies, tele- phone companies, telegraph companies, electric com- panies, or other persons who hold a franchise from the municipality to extend their services to territory as required by the municipal charter. Acts 1987, 70ih Leg., ch. 149, § 1, eff. Sept. 1, 1957. Amend- ed by Acts 1999, i6th Leg., ch. 405, § 44, eff. Sept. I, 1999. Renumbering Acts 2007, 80th Leg., ch. 885, § 3.76(¢)(2) renumbered this Chapter to VTCA, Local Government Code Chapter 552, effective April 1, 2009. § 402.0025. Connection, Disconnection, and Lia- bility for Municipal Utility Services (a) A municipality may not require a customer to pay for utility service previously furnished to another customer at the same service connection as a condition of connecting or continuing service. (b) A municipality may not require a customer's utility bill to be guaranteed by a third party as a condition of connecting or continuing service. (c) A municipality may require varying utility de- posits for customers as it deems appropriate in each case. (d) Except as provided in Subsections (e) and (f), a municipality may by ordinance impose a lien against an owmer's property, unless it is a homestead as protected by the Texas Constitution, for delinquent bills for municipal utility service to the property. (e) The municipality's lien shall not apply to bills for service connected in a tenant's name afier notice by the property owner to the municipality that the property is rental property. (f) The municipality~s lien shall not apply to bills for service connected in a tenant's name prior to the effective date of the ordinance imposing the lien. This subsection shall not apply to ordinances adopted prior to the effective date of this Act. (g) The municipality's lien shall be perfected by recording in the real property records of the county where the property is located a notice of lien contain- ing alegal description of the property and the utility~s account number for the delinquent chazges. The mu- nicipality's lien may include penalties, inierest, and collection costs. (h) The municipality's lien is inferior to a bona fide mortgage lien that is recorded before the recording of the municipality's lien in the real property records of the county where the property is ]orated. The munic- ipality's lien is superior to all other liens, including previously recorded judgment liens and any liens re- corded after the municipality's lien. Added by Acts 1959, 71st Leg., ch. 304, § 1, eff. Aug. 28, 1999. Renumbering Acts 2007, 80th Leg., ch. 885, § 3.76(¢)(2) renumbered this Chapter to VT.CA, Local Government Code Chapter 552, ejjeetive April I, 2009. § 402.003. Acquisition of Existing Public Utility; Payment in Lieu of School Taxes (a) If, after 14Iay 8, 1943, a municipality acquires an existing public utility, the property of which is subject to taxation by a school district, and the municipality fmances the purchase of the utility by issuing revenue bonds, the governing body of the municipality may expressly provide, in an indenture of trust, mortgage, or other lien instrument that evidences the obligation of the municipality for the purchase price, for an annual payment from the income of the utility of an amount equal to the average annual taxes assessed by the school district on the properties of the utility for the five years preceding the year in which the utility is acquired. (b) The school board trustees and the governing body of the municipality may agree on an annual payment of a sum in lieu of school taxes. The sum must be adequate and just under the circumstances of the case considering the school district's needs. (c) The obligation of the municipality to make the payment in lieu of taxes is a proper item of municipal operating expenses that, with other operating ex- penses, E afirst lien and chazge against the income of the encumbered utility. (d) The obligation of the municipality to make the payonent in lieu of taxes as provided in the encum- brance agreement is an "expense or obligation" of the utility system as that term is used in statutes autho- ruing the acquisition of a public utility and the issu- ance of revenue bonds far the purchase of the utility. The obligation extends to and binds any municipality 1156 P. O. No. 6016 vrt 07/24/09 ORDINANCE NO. AN ORDINANCE AMENDING CHAPTER 110 (UTILITIES), ARTICLE II (WATER), DIVISION III (SERVICE CHARGES AND BILLING), OF THE CODE OF ORDINANCES BY ADDING A NEW SECTION 110-99 PROVIDING FOR THE IMPOSITION OF A LIEN ON AN OWNER'S PROPERTY, OTHER THAN HOMESTEAD OR RENTAL PROPERTY, AND PROVIDING A NOTICE REQUIREMENT FOR DELINQUENT BILLS FOR WATER UTILITY SERVICE WHEREAS, Section 402.0025 of the Texas Local Government Code gives municipalities authority by ordinance to impose a lien on certain owner's property for delinquent bills for utility service to the property; and WHEREAS, the City of Port Arthur provides water utility service to properties within the City and experiences owners being delinquent on payment of bills; and WHEREAS, the City Council believes it is in the best interest of the citizens of Port Arthur to have the ability to impose a lien on eligible properties as a means of securing payment of such delinquent bills. NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR: Section 1. That the facts and opinions in the preamble are true and correct. Section 2. That Chapter 110 of the Code of Ordinances of the City of Port Arthur is hereby amended by adding Section 110- 99 to read as follows: CHAPTER 110 UTILITIES ARTICLE II WATER DIVISION 3: SERVICE CHARGES AND BILLING SECTION 110-99 (a) When delinquent charges imposed by this article for utility service remain unpaid, the Director of Finance, his/her designee or such other official as designated by the City Manager, may impose a lien against the real property to which such service was delivered. The lien shall include and secure the delinquent charges, penalties, interest and collection costs. The lien shall be perfected by filing a notice containing a legal description of the property and the utility account number for the delinquent charges in the real property records of the county in which the property is located. (b) The lien authorized in this section shall not apply to bills for service connected in tenant's name after notice by the property owner to the municipality that property is rental property. (c) The lien authorized by this section shall not apply to homestead property as protected by the Texas Constitution. (d) The lien authorized in this section is superior to all liens except a bona fide mortgage lien in the real property records of the county where the property is located. Section 3. That all ordinances or portions thereof in conflict with the provisions of this ordinance, to the extent of such conflict, are hereby repealed. To the extent that such ordinances or portions thereof are not in conflict herewith, the same shall remain in full force and effect. Section 4. That a copy of the caption of this Ordinance be spread upon the Minutes of the City Council. Section 5. That this being an Ordinance amending an Ordinance which does not carry a penalty, and does not require publication, it shall take effect immediately from and after its passage. READ, ADOPTED AND APPROVED on this day of A. D., 2009, at a Council Meeting of the City Council of the City of Port Arthur, Texas, by the following vote: AYES: Mayor City Council NOES: MAYOR ATTEST: ITY SECRETARY APPROVED AS TO FORM: ~A~~ CITY ATT N ~~~ FjB~AI.F ~F~ APPROVED FOR ADMINISTRATION: CITY MANAGER