Inconsistencies in billing cause concern
by Samantha White
Discussion regarding Resolution 2109 resumed during the regular meeting of the Hines Common Council (held Oct. 8).
Passed June 22, 2010, Resolution 2109 amended Resolution 2056 regarding the setting of water meter rates, and Resolution 2070 regarding the setting of water and sewer charges. The rates set by Resolution 2109 became effective July 1, 2010.
Under Resolution 2109, the base rates for water vary, depending on the size of the water line. In addition to the base rates, a volume charge of $0.0020 per cubic foot was applied to all accounts. The resolution also set a base water rate for low-income customers at $12.15 per month.
Resolution 2109 set a base sewer rate of $23 for residential customers, or $19.50 for low-income residential customers. Under the resolution, hotels and motels are charged a base rate of $23 per month, plus $4 for each unit over three. Customers deemed commercial are charged a base rate of $23 per month, plus a volume charge of $0.0029 per cubic foot.
During the previous meeting (held Sept. 24), the council agreed to ask City Administrator Joan Davies to research inconsistencies in the enforcement of Resolution 2109, which resulted in some accounts being over-billed, and others not being billed enough.
During the Oct. 8 meeting, Davies read the following statement aloud to the council:
“About the end of August, I pulled a report that showed, first of all, a huge credit in one account. When I asked why that account had a $1,700 credit amount, I was told that it was because that account owner reads their own meter, then pays the city what they calculate they owe. I asked why they read their own meter, instead of the maintenance crew reading it, like everyone else’s. I was told, “It has always been done that way,” since meter rates were set by Resolution 2109 on June 22, 2010.
I also discovered that this particular account was being billed the wrong water base amount for their size of line. It should have been $357 for two months (plus metered usage), but their accountant has been paying $396. A note in their city account file says $198 per month, but it should have been $178.50 per month. I have estimated they were over-billed $741, but am comparing records with them.
Second discovery was that another account’s water meter is never read. They have been charged a ‘flat rate’ of $1,580 every two months, and the maintenance crew does not read their meter. I asked why their meter was not being read, and was told that back in 2010, they found with meter installation that the charge would have been much less than the historical unmetered flat rate, so it was decided to keep this account at the flat rate and not read the meter.
Under Resolution 2109, this account should have been charged $83 for a two-inch water line, plus metered water usage. There is no language authorizing this flat rate, and at this point, I have not found any agreement by the customer allowing that flat rate to continue. I have researched meeting minutes back to 2008 and interviewed former council members, and have found no basis for the charge. I am still researching this, but if they did not agree to continue the $1,580 flat rate, they have been over-billed $9,706.38, just on water alone. That may be mitigated somewhat by the fact that they have a separate underground sprinklers line, which would have used water in the summer, but we don’t have consistent meter readings on that line.
A third discovery was that, although Resolution 2109 also provided for charging all commercial accounts a volume charge for sewer, at $0.0029 per cubic foot, it was not being charged. I was told first that it was the fault of the computer programmer, and that they must not have entered the formula when told to do so. A couple of days later, I was told that it was because of the motels protesting the increase in costs, so the charge was never implemented. But it partially was.
I asked the company owner and programmer, and was told that the formula actually was entered, back in 2010, but the computer programmer does not apply specific codes to city accounts, and would not have known which accounts were commercial. City staff had only coded a small number of commercial businesses for it to be applied to. There are five coded commercial, but another 39 that should have been, under Resolution 2109.
Council meeting minutes and councilors’ memories did not support any discussion about only applying the rate to certain commercial accounts, and there is no later resolution repealing the unanimous decision to implement those rates.
The resolution does provide for an exclusion from the sewer volume charge for motels. Instead of the $0.0029 sewer volume charge, they were supposed to be charged $46 for a two-month sewer base rate, and then $4 per room (for each unit over three). That charge, which would have to be applied by city staff, was never applied, resulting in an approximate loss of $10,571 in revenue.
The discussions around metered water usage, from 2008 to 2010, involved increasing revenue and building a reserve for the replacement of our water and sewer lines that are over 80 years old. Failing to implement and/or properly calculate the commercial accounts, as directed by the council at that time, has cost the city thousands in revenue.
So far, an account-by-account check shows that city staff only applied the sewer volume charge to five commercial accounts. It shows three of the commercial accounts were over-billed by $741, $722.53 and $147.32, respectively, and the ‘flat rate’ commercial account shows upwards of $20,000 in over-billing. We continue to research and advise the affected businesses.
That is why I asked the council to allow me to temporarily suspend the sewer volume charge from the five affected commercial accounts, until we could fully research the matter and you [the council] can decide whether you want to enforce the 2010 resolution, amend it, or repeal it.
There are 56 accounts set up for discounted water and half sewer fee. Resolution 2109 only applies for discounted water, and there’s nothing about charging only half the sewer fee.”
Councilor Hilda Allison said, “Due to a clerical error back in 2010, we are in the situation we are in,” and she asked whether over-billed accounts would have to be paid back.
Davies replied that the city is legally obligated to pay over-billed customers back with interest.
“We can’t go back and bill people we didn’t bill, but we have to pay back [over-billed customers,]” she said.
Councilor Dick Baird asked whether over-billed accounts can be credited for future payments.
Davies replied that she has been discussing this option with customers.
Councilor Dick Anderson said the “bigger issue” was ensuring that all accounts are billed consistently.
Mayor Nikki Morgan said the resolution needs to be followed.
“Thirty-nine commercial accounts were never charged [the sewer volume charge of $0.0029 per cubic foot,]” Davies said, and she asked, “Are we going to start charging them now?”
The council discussed whether it would be fair to implement the sewer volume charge for commercial accounts and the $4 per unit charge (for each unit over three) for hotels and motels.
Regarding the hotel and motel charge, Davies said, “I, personally, don’t think that’s fair,” explaining that they are charged, whether they fill their rooms or not. “One motel already closed for lack of business,” she said, but she added that the city needs money for infrastructure.
Morgan and Councilor Tom Choate said they couldn’t remember why the $4 charge was implemented.
Baird made a motion to implement the resolution’s $0.0029 per cubic foot sewer volume charge for all commercial accounts, including hotels and motels. The motion carried unanimously. Baird also moved to amend Resolution 2109 to remove the exclusion for hotels and motels. This motion also carried unanimously.
The council also discussed the low-income discount for residential accounts. Davies said she believed some customers were added to the discount list who should not have been, and the council discussed reviewing these accounts and requesting customers to provide their income information.
Police Chief Ryan DeLange reported that the department responded to a fight between two males in which one pulled a gun on the other.
DeLange discussed the need for bicycle safety awareness, as there have been a number of bicycle accidents in the community lately.
He also reported that two youths escaped from Eastern Oregon Academy, broke into seven vehicles, and stole the eighth. He said the youths took the stolen vehicle on a “joy ride” and then parked it on the Nature Trail. In an unrelated case, an additional vehicle was stolen and taken for a “joy ride.”
DeLange said he’s been working with the Oregon Department of Fish and Wildlife to address the deer population within the city, and he suggested that information be released to the public regarding the negative impact of feeding deer and elk in the city.
He also stated that, due to the government shutdown, people have been unable to obtain permits for cutting firewood, but the permits are still being required.
“I don’t think it’s fair, either,” DeLange said, regarding the permit predicament.
In other business, the council:
• received an update from Fire Chief Bob Spence who reported that the department received two 9-1-1 calls since the last meeting. Spence also reported that the Hines Volunteer Fire Department now has 14 members (up from 11), and training is “ongoing;”
• learned from Superintendent of Public Works Pedro Zabala that the maintenance department has been “getting ready for winter.” Zabala also presented the council with information showing water use since 1986. He said water use was down this year, compared to last year;
• was informed by Davies that the city audit that had been conducted the previous week “went really well;”
• discussed the crack sealing project that was recently completed by TopLoc Asphalt Maintenance. Ron Williams of TopLoc thanked the council for the opportunity to complete the project, stating that the company “did a lot of hard work and cleaned virtually every crack in Hines.” Choate thanked Williams for his work, adding that the streets “look good;”
• was addressed by Baird who said maintenance around the city “looks really good.”
The next regularly scheduled meeting of the Hines Common Council will be held Oct. 22 at 6:30 p.m. at city hall.