BARSTOW • City officials announced the the City Council will vote on issuing nearly $1 million of refunds for sewer fees after discovering many commercial accounts were being overcharged.
Of the 492 commercial sewer accounts in the city, more than half were found to be overcharged for their bills, City Manager Curt Mitchell said at Monday's City Council meeting.
The city charges accounts based on sewer units: one for each residential account, and several units for businesses depending on their waste water needs. These needs are calculated by looking at normal waste water production for the type of business as well as how much water the business uses.
After reviewing each account, city staff determined 254 accounts had overestimated water usage, 124 were underestimated, and 114 were appropriate.
Assistant City Manager Oliver Chi said after the city approved sewer rate increases, which took effect May 2011, they were approached by numerous businesses that asked the city to audit the sewer units calculations.
What they found was the city used incorrect estimates of the businesses approximate water usage. After looking at actual water usage of many accounts, they noticed many were overestimated.
"We said 'Wait a minute something doesn't feel right with the way the rates are actually being calculated for our business community,'" Chi said.
To remedy the problem, the city is presenting a resolution to be considered by the Council Nov. 21 that will refund one year of excess charges to overestimated commercial accounts, totaling about $485,000.
The resolution also postpones the implementation date for the sewer rate increases for both commercial and residential accounts to Dec. 1, 2011.
This includes refunding the sewer rate increase of $7 already collected from residential accounts from May to November. Each residence will have refunded to them $49 each, costing the city nearly $450,000.
Chi said being that many of the commercial rates were overestimated, it's only fair they not be charged the increase until December; and if commercial accounts aren't paying the increase, neither should the residential accounts.
"And at that point in time we made the decision it probably wouldn't be appropriate to implement the rate increase yet, the $7 effective May first," Chi said.
If the resolution is adopted, those accounts who are overcharged will be charged for fewer sewer units. Those who were underestimated or properly estimated will be charged for the same number of sewer units as before.
Chi said it's hard to determine how long these customers were being overcharged, adding the city "could have been more consistent" in estimating water usage of businesses.
The city is hosting a series of community meetings to answer any questions and address concerns. Meetings will be 5-7 p.m. Wednesday, 7 p.m. Thursday, and 5-7 p.m. Nov. 15.
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