Agenda - Council - 09/23/2003 - Laserfiche WebLink

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UNDERBILLING OF COMMERCIAL ACCOUNTS FOR SEWER & WATER UTILITIES By: Diana Lund, Finance Officer Background: At the worksession of September 15, 2003, City Council was made aware of the under billings that have occurred on several commercial utility accounts within the City. It was discovered by City staff that commercial accounts that had a 10,000 water meter installed in their establishments were incorrectly getting billed based on a 1,000 water meter usage. The effect of this under billing is that commercial businesses were only being billed for 1/10 of their actual usage for sewer and water. A listing of the affected commercial businesses was prepared by Connexus Energy, who performs the City's utility billing. Based on the under-billed calculations to date, almost $400,000 is owed to the City for under-billed commercial accounts. The City can handle the situation in the following different ways: 1. Waive the amount owing. 2. Back-bill each affected commercial business for total amount owing. 3. Have Connexus Energy assume some of the material responsibility. Mr. Goodrich, the City's attorney, has been asked by staff if the City was allowed to back-bill, and he quoted the State Statute which allows Cities to go back six years to collect on accounts past due. Based on discussion during the September 15, 2003 worksession, City Council was unanimous in decision in that the City needed to collect the amount owing on the under- billed accounts and that the item should be brought back to a City Council meeting for formal approval. Recommendation: Based on the recommendation of City Council during the worksession of September 15, 2003 - the City will back-bill under-billed commercial utility accounts. Action: Approve the recommendation of City Council from the September 15, 2003, worksession.