Leaks found: Company helps city discover $1.9M in utility revenues
The city of Vicksburg’s utility system will get an extra $1.9 million each year after an audit of its water and sewer systems found the city was underbilling two businesses and not billing a third for service.
The Board of Mayor and Aldermen in December 2016 signed an agreement with Houston, Texas-based Water Company of America to perform an audit of the systems to find users who weren’t paying their fair share for what they use.
Under the agreement, once auditors discovered any unbilled use in the city, they sent the discovery to the city’s utility billing department.
According to the performance-based contract, Water Company of America received 55 percent of the total revenue recovered during the 36-month contract, which ended in January. Based on the revenue discovered, the company received $1.04 million for its work, with the city getting $874,903.
Beginning in February, the city will begin receiving the revenue uncovered by the audit.
“That 55 percent (to WCA) was worth every bit of what we got,” Mayor George Flaggs Jr. said. “We weren’t getting anything from water that was either on the ground or going into the river. This was a no-brainer.”
The audit found billing problems involving three companies using city water and sewer service:
• The U.S. Army Engineer Research and Development Center was being billed a flat monthly sewer fee of $1,300 when it should have been paying an estimated amount of $168,000 per month.
The city, assisted by WCA, and ERDC reached a negotiated solution where ERDC would be charged for sewer service based on water consumption. No back payments were required.
• An error in reading the city’s water meter for the Culkin Water District, which buys water from Vicksburg, resulted in the city billing Culkin for 10 percent of the district’s water consumption. The city was reportedly losing an estimated $180,000 a year in revenue. The problem was corrected.
Also, a back-bill was recently generated by the city and paid by the customer in the amount of $88,000.
• A water meter at Ergon Biofuels was not in the city’s billing system and causing the city to lose about $300,000 a year. For more than 36 months, from July 2015 to July 2018, the city lost $1 million, according to WCA.
The city and Ergon negotiated an $809,000 back payment and a six-month payment plan of $134,000 a month to recover the lost revenue. The city has been paid in full.
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