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Dunedin commission upset over $694,000 utility bill mistake

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By Mark  Schantz | The Suncoast News

Published: September 11, 2009

Updated:

DUNEDIN - To the shock of the City Commission, a misplaced decimal point resulted in a $694,420 loss to the city in storm-water utility fund revenue.

Commissioners are equally dismayed that a host of auditors and consultant reports did not catch the error, in place since a rate increase in 2003. They will decide whether to hire an auditor to review utility rates and other fees when they meet this Thursday, Sept. 17.

While preparing for a proposed storm-water rate increase, interim Finance Director Annette Stahura discovered commercial users have been underbilled for storm-water service since 2003. In 2003, the commission vote to raise the monthly storm-water rate to $4.50 to $3 for both residential and commercial users.

The 2003 residential fee increase was implemented. The commercial rate, however, was only raised $0.15, not $1.50.

In addition, when rates were increased once again in 2005 to $6, no adjustment was made for commercial users, also a staff error.

The mistakes came to light this month, when city staff was preparing to implement a storm-water fee increase - to $8.25 a month per equivalent residential unit - the commission approved earlier in the year.

In effect, commercial customers have been charged just $3.15 since 2003, according to Stahura. The loss has amounted to about $125,000 each year.

City Manager Robert DiSpirito said storm-water utility fee revenue is used for the city's drainage and treatment programs, which have not been affected by the loss of revenue. Capital projects have not been affected by the loss either.

Employees no longer working for the city made the mistake. The error was discovered after they left the city staff, DiSpirito said.

"To say that I am upset is a tremendous understatement," said Commissioner Dave Carson.

Carson questioned why the city did not run standard tests when implementing new fees. Why were no red flags raised when increases did not produce predicted revenue increases? he asked.

Commissioner Julie Ward Bujalski said her confidence in consultants and auditing reports and revenue projections has been shaken.

DiSpirito called the mistake inexcusable and pledged that safeguards will be implemented to prevent a repeat.

The commercial undercollection per year, he noted, was relatively small in comparison with the total revenue collected, amounting to 5 to 7 percent. It appeared to be within normal fluctuations of yearly revenue, taking into account variations in demand and the declining economy.

Most commissioners said they would not ask commercial customers to make up for the city's error, even though the city could seek back revenue for up to four years.

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