DRAFT: Resolution on water usage over-billing

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Don Zimmerman
Posts: 168
Joined: Fri Jan 09, 2015 11:05 am

DRAFT: Resolution on water usage over-billing

Post by Don Zimmerman »

CM Colleagues,

We continue to get calls on dramatic increases in measured water usage.
In last months PUC meeting, Austin Water made it clear they did NOT wish "profit" from the extraordinarily high water bills. While we continue investigating the root cause of the problem, we propose this draft Resolution on helping users cope with the high bills.

My current speculation on the problem is, Austin Energy and their contractor Corix Utilities have not been able to physically read all the meters on a monthly basis, leading to "catch-up" readings, which reflect several months of higher readings lumped into one very large reading. Of course we need cooperation from AE and Corix to audit this problem and get a final resolution. I'm looking forward to discussing this more in Octobers' PUC meeting.

RESOLUTION NO._________________ (DRAFT)


WHEREAS, the City Council has received numerous customer complaints about Austin Energy’s assessments of greatly increased water usage from residents; and

WHEREAS, judging from the dilapidated condition on some water meters, it does not appear that every water meter is being read each and every month; and

WHEREAS, only about 50 meter readers, contracted through Corix Utilities, are responsible for reading nearly 240,000 meters per month, and are only permitted to read meters as directed by Austin Energy billing staff, NOW, THEREFORE,

BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF AUSTIN:

That the City Manager is directed to: compare the calendar 2014 year’s monthly usage to the 2015 year’s (thus far) monthly usage for residential and multifamily accounts; for accounts that are showing usage at over 200% the previous year’s usage for a given month, then any usage above the 200% will be billed at the 0-2,000 Gallons tier and no Water Revenue Stability Reserve Fund Surcharge will be included over the 200% usage level.

BE IT FURTHER RESOLVED:

That the City Manager will credit the accounts any difference in compliance with this resolution.
Don Zimmerman
Council Member District 6 (northwest Austin)
Don Zimmerman
Posts: 168
Joined: Fri Jan 09, 2015 11:05 am

Re: DRAFT: Resolution on water usage over-billing

Post by Don Zimmerman »

UPDATE: Important message from city legal staff:

Councilmembers –

Before tomorrow’s meeting of the Public Utility Committee, I’d like to address an issue raised by the draft resolution concerning high water bills that CM Zimmerman has posted on the message board for discussion. I’ve discussed this with CM Zimmerman’s office and want the Committee to have the same background for the discussion. Briefly stated, if utility service is billed in accordance with the city’s service regulations (City Code Chapter 15-7), it would be unlawful to retroactively adjust the rates by which the consumption is charged or otherwise reduce the debt owed for services rendered. This is not to say actual metering errors or billing irregularities cannot be addressed – only that charges for service rendered cannot be reduced or changed in the absence of demonstrated factual or procedural error in a given case.

As written, the resolution would retroactively impose a rate restructuring on consumption even if properly billed. Article III, Section 55 of the Texas Constitution provides that “[t]he Legislature shall have no power to release or extinguish, or to authorize the releasing or extinguishing, in whole or in part, the indebtedness, liability or obligation of any…individual, to this State…or any defined subdivision thereof, or other municipal corporation therein, except delinquent taxes which have been due for a period of at least ten years.” The Courts have consistently held under this provision that once a debt accrues and is owed to a municipality, the municipality has no power to release or diminish that obligation. Nor can rates be retroactively changed or established.

Further, both §15-9-145 of the City Code and §1502.057 of the Gov’t Code require rates charged for services provided by a utility system to be equal and uniform, and prohibit free utility service for any location except those operated by the City. For bills that are incorrect, the City’s utility service regulation at Section 15-9 of the City Code allows a customer to dispute a bill and bring the issue before the utility for review and administrative hearing before a hearings officer. Sections 15-9-131 through 15-9-145 address the process for billing adjustments for error and sections 15-9-191 through 15-1-195 address the review and hearing process.

Our advice is that any resolution on this action focus on the process for identifying and correcting billing errors, but avoid an across-the-board action that retroactively affects a subset of customers absent specific factual findings of error in each particular case. Resulting charges for services would still need to be billed under the rate structure in effect – by ordinance – at the time the services were rendered.
Don Zimmerman
Council Member District 6 (northwest Austin)
Shannon Halley
Posts: 36
Joined: Mon Nov 24, 2014 10:27 am

Re: DRAFT: Resolution on water usage over-billing

Post by Shannon Halley »

Mayor Pro Tem Tovo may not be able to make it to today's Public Utilities Committee. She woudl appreciate it if one of the committee members could inquire whether collections are being suspended for customers who are requesting that their account be investigated.

Thank you,
Shannon
Senior Policy Advisor
Office of Kathie Tovo, District 9
Don Zimmerman
Posts: 168
Joined: Fri Jan 09, 2015 11:05 am

Re: DRAFT: Resolution on water usage over-billing

Post by Don Zimmerman »

Apologies for only seeing this posting just now - it's a great question, but based on what I heard yesterday, I would say the answer to the question is no.

Moreover, we were told that thousands of requests (over 90%) of investigated accounts have been closed with no adjustments to bills. Around 200 adjustments have been made with over 10,000 billing irregularity complaints received. Most of those 10,000 inquiries (say 80%) were not escalated for managerial review.

Commitments were made to adjust the wastewater charge (with potential refund) of the Greenslopes community, since a large fresh water leak was finally discovered 100s of feet away from where anyone had thought to look before. Also the cause of 2 months of extremely low water usage/bills for Greeslopes is still unexplained and hopefully still under investigation.

The Council agreed that a meaningful audit of meter reading was necessary, and passed a resolution to that affect.
Don Zimmerman
Council Member District 6 (northwest Austin)
Don Zimmerman
Posts: 168
Joined: Fri Jan 09, 2015 11:05 am

Re: DRAFT: Resolution on water usage over-billing

Post by Don Zimmerman »

In answer to the city attorney letter stating, in part:

"...charges for service rendered cannot be reduced or changed in the absence of demonstrated factual or procedural error in a given case", I wish to concur in general with this opinion. Currently we cannot tell the difference between a meter reading based on someone actually using 200% more water, versus a meter reading showing 200% based on some kind of error. The point of the Resolution was to remove a profit incentive for Austin Water which exists as an unintended consequence of the higher tiered water bills.

However, I need to underscore precedence for AWU in refunding overcharges not related to "factual or procedural error", and that's the recent case of the PUC ordering AWU to refund millions of dollars in overcharges to north Austin wholesale customers North Austin MUD No 1, Northtown MUD, Travis County WCID No. 10, Wells Branch MUD. See following documentation:
Public Utility Commission Docket No. 42857
State Office of Administration Hearings (SOAH) Docket No. 473-14-5138.WS

In part, "The ALJs [Administrative Law Judges] also recommended that the Commission [PUC] order the city to refund to petitioners any amounts over-collected for water services under the appealed rates and that the Commission disallow recovery by the city of rate-case expenses".
Don Zimmerman
Council Member District 6 (northwest Austin)
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