Legal Aid and housing authority reach estimated $500K settlement over class action suit

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Residents of Westhaven and other public housing developments who have been overcharged for utilities will soon receive checks in the mail. Photo: Jack Looney Residents of Westhaven and other public housing developments who have been overcharged for utilities will soon receive checks in the mail. Photo: Jack Looney

Hundreds of low-income city residents will receive checks in the mail now that the Charlottesville Redevelopment and Housing Authority has reached a proposed settlement with the Legal Aid Justice Center over a utility allowance dispute that may be worth upwards of half a million dollars, including $160,000 in cash payouts. A federal class action suit filed last year claimed that the housing authority failed to provide adequate electric utility allowances to its residents, resulting in thousands of dollars of overcharges to public housing tenants.

“This is a big victory for tenants,” said Brandon Collins of the Public Housing Association of Residents. “It’s been a long time in the making.”

Collins said the settlement is a step in the right direction in terms of smoothing out the relationship between tenants and the CRHA, which has been rocky for years.

“Moving forward, the problem should be solved in a way that’s beneficial to both residents and the housing authority,” Collins said. “This affects every resident of public housing.”

The proposed settlement was filed Monday, September 30, and must be approved by Federal District Court Judge Glen Conrad on Monday, November 4, and go through a fairness hearing—during which residents will have the opportunity to voice any concerns about the agreement—before it’s final.

When they filed last year, plaintiffs demanded that the housing authority reevaluate its utility allowance and establish a new policy, and they wanted each tenant to be reimbursed for all overcharges since 2003.

According to Legal Aid attorney Brenda Castañeda, the settlement is worth nearly $500,000 in cash and relief to tenants. The proposed agreement states that $95,400 will be distributed among tenants who paid utilities to the CRHA from June 2, 2007 through May 31, 2013, and another $6,000 will be divided among renters whose utility charges were below their annual utility allowance. According to Castañeda, everybody who was overcharged will get back 33 percent of what they paid since June 2007. Current public housing residents will also receive a $15 per month credit on their accounts for 36 months, and $5 per month for an additional two years.

CRHA Executive Director Connie Dunn said most of the payback money will come from the housing authority’s insurance company, and the remaining $60,000 will be pulled from its reserve fund. She also noted that the monthly credits will only benefit families who remain under their utility allowances, and that monthly rates have gone up.

Dunn said she’s glad they were all able to come to an agreement, but she’s not convinced that the impact will be staggering.

“I don’t think the average tenant is going to see much of a difference,” Dunn said.

The plaintiffs didn’t get everything they asked for, but they’ve left a legacy for future tenants. CRHA conducted a new utility allowance study shortly after the suit was filed last year, and Castañeda said residents will start receiving checks in the mail early next year.

The settlement was four months in the making. Castañeda said she’s glad the two parties were able to come to an agreement through mediation, but she hopes it won’t have to come to that again.

“We’d like to be able to get along, and the tenants would like to feel like the CRHA is going to be more responsive to their concerns,” Castañeda said. “I hope that in the future we can resolve things without going through litigation to do it.”

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