Billing Error Costs Wastewater Fund $200,000 Some Projects On Sewer Mains May Be Put On Hold For Another Year
An error in how the city determines its sewer rates cost Coeur d’Alene’s wastewater fund $200,000 last year, but officials are calling the amount “insignificant.”
The fund lost out on about 3 percent of its $6 million budget. While a number of maintenance projects on existing sewer mains may be put on hold for another year, city finance director John Austin said the loss won’t affect day-to-day operations.
“Three percent is just not that big of an impact,” said Austin. “A couple of years ago we had to pay out $3 million for a lawsuit from that fund. That was substantial.”
Austin was referring to a $2.4 million breach-of-contract suit in 1994 won by a contractor fired from the city’s wastewater treatment expansion project.
The current problem occurred when the city gave 1,100 multifamily residences and 100 commercial customers what amounted to a double credit for sewer services last year.
The wastewater division calculates sewer charges based on how much water is used each month. But during the summer, some of the water used by these multifamily residences and commercial customers goes for watering lawns and washing cars - and not back into the sewer. As a result, these customers receive a reduced sewer rate based on their water use during the winter months.
The $200,000 loss came about when the firm hired to determine city’s water rates, Brown and Caldwell, factored in an additional rate credit. Austin said the city won’t try to recover the loss, but will charge these customers the correct amount this year.
“We knew in time to not lose the $200,000, but we wanted to be able to notify everybody properly,” said Austin, explaining that officials noticed the error shortly after the rate study was approved in May 1996. “We realized we would take a hit in our wastewater fund, but we also knew we could absorb the loss.”
Although rates simply will be changed back to what they should have been a year ago, neither Alf or Mildred Solberg is happy about the increase - or particularly thankful for last year’s discount.
The couple manage Oak Crest Park, 4301 N. Ramsey Road. With 470 mobile homes, it is the largest park of its kind in the state - and the Coeur d’Alene sewer division’s biggest customer.
Last summer, the Solbergs paid about $5,500 in sewer costs per month. When rates increase from the current $1.72 per 1,000 gallons to an expected $2.46 per 1,000 gallons this summer - about 43 percent - their costs will go up more than $2,300 monthly.
“I don’t like it one bit,” Mildred Solberg said. “We pay enough as it is here.”
A public hearing has been scheduled for May 20 on the rate increase, and new rates should go into affect June 1. The rates of other customers in the city, including single-family home owners, will remain unchanged.