BANGOR, Maine — The Bangor Housing Authority has reached a settlement with 30 tenants who were unfairly assessed heating oil surcharges last winter, avoiding a possible class action lawsuit.
Rufus Brown, a Portland attorney, had brought a suit to court on behalf of two female tenants of Bangor public housing — Amanda Black and Melissa Seidell — and was seeking to widen his case into a class action.
Instead, the matter was settled out of court on Wednesday.
“The arrangement going forward is deemed acceptable to all parties,” Brown said Thursday by telephone. “We were very satisfied with how the authority handled the situation.”
Essentially, the agreement establishes a firmer policy by which the housing authority must notify tenants in a timely fashion of any surcharges related to heat. It also requires the housing authority to pay back nearly $4,000 to tenants who were wrongly assessed surcharges dating back to last winter. Finally, it requires the housing authority to pay $17,000 in legal fees to Brown and his legal associates.
Paul Chaiken, chairman of the Bangor Housing Authority’s board of commissioners, said the settlement accomplished what was intended.
“But I’ve got some disappointment,” he said. “We acknowledge in this resolution that we did not follow precisely all of the regulations. What I was disappointed with was that the other side jumped right to litigation instead of picking up the phone and calling us to say, ‘I think we have a problem.’”
The initial suit was filed on Nov. 7 in U.S. District Court in Bangor on behalf of Black and Seidell. According to court documents, Black and Seidell were among several tenants who were assessed heating oil surcharges last winter.
The lawsuit alleged that the Bangor Housing Authority and executive director Elsie Coffey violated federal regulations set by the U.S. Department of Housing and Urban Development when it imposed the surcharges. HUD regulations call for public housing tenants to pay 30 percent of their monthly adjusted income, which includes rent and a “reasonable amount” for utilities.
In April, Seidell was charged an additional $118 and Black was charged more than $360 for what BHA called excessive use of fuel oil last season. Both women live on the same street in the Capehart area of Bangor, according to the lawsuit.
Black and Seidell had complained to BHA about heating problems in their apartments last year but said BHA failed to take steps to remedy the problems. Both women were granted hearings over the surcharges, but the hearing board rejected their complaints, according to the lawsuit.
“The other side has agreed that our calculation of allowable amount was consistent with regulations,” Chaiken said. “The problem was whether enough notice was given.”
Brown said he was happy to raise the issue on behalf of his clients.
“We certainly appreciate the difficulties of a housing authority, particularly in a time of increasing energy costs and limitations on funding,” he said.
As far as the possibility of a class action suit that would have included all 450 tenants of Bangor housing, Chaiken said he doubted that was ever realistic. He said among the 30 people who were assessed surcharges, only Black and Seidell sought legal counsel. The other 28 either did not respond or did not complain, Chaiken said.
The approximately $4,000 has either been paid back to tenants or has been credited toward future utility bills. The $17,000 in legal fees will be paid by the housing authority’s insurance provider.