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Agenda Item: 7(a) |
Prepared By: Jeffrey E. Poteet, General Manager, Water & Sewer |
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Business: Consent Agenda Item |
Department: Water & Sewer |
Subject:
Title
Approval of a Water and Sewer Billing Refund - Marco Island Senior Living, LLC in the amount of $112,742.33 - Jeffrey E. Poteet, General Manager, Water & Sewer Department.
Body
BACKGROUND:
Marco Island Senior Living, LLC (Account No. 50705), located at 1170 San Marco Road, contacted the City regarding concerns with its utility billing. The Water and Sewer Department's Customer Service staff conducted a comprehensive review of the account, including historical billing records, meter configuration settings, applicable utility rates, and account setup.
The investigation determined that one of the customer's commercial water meters had been incorrectly configured in the utility billing system when it was installed in July 2024. Commercial and large-diameter water meters commonly use meter multipliers because their registers record water usage in larger increments rather than displaying the total gallons that pass through the meter. The utility billing software applies the assigned multiplier to convert the meter register reading into actual water consumption for billing purposes. In this case, the meter multiplier was inadvertently entered as 1,000 instead of the correct value of 100, causing the water consumption recorded by that meter to be overstated by a factor of ten. In addition, the associated water and sewer base charges for that meter were not established correctly when the account was configured. As a result, both the monthly base charges and the water and sewer usage charges were calculated incorrectly over an extended period.
Customer Service staff recalculated each affected billing period using the correct meter multiplier, applicable utility rates, and the proper base charges. A detailed reconciliation was prepared comparing the amounts billed to the amounts that should have been billed. Based on this review, the customer was determined to have been overcharged $118,156.73.
The recalculation and proposed adjustment were independently reviewed by the City's Finance Department, the General Manager of Water and Sewer, and the City Manager to verify the accuracy of the calculations and ensure the billing corrections were appropriate.
The utility billing system has since been corrected to ensure all future bills for this account are calculated accurately. A credit in the amount of $118,156.73 was applied to the customer's utility account. After applying the current billing charges of $5,414.40 reflected on the June 30, 2026 utility bill, the account has a remaining credit balance of $112,742.33.
Following application of the account credit, the customer requested that the remaining credit balance be refunded rather than retained on the utility account. Because the requested refund exceeds the City Manager's approval authority, City Council approval is requested to ratify the billing adjustment and authorize a refund of $112,742.33 to the customer. This action corrects an administrative billing error, ensures the customer pays only the utility rates and fees established by City ordinance, and maintains the integrity and accuracy of the City's utility billing system.
FUNDING SOURCE / FISCAL IMPACT:
Funds for the refund will be paid from the Water and Sewer Fund. The associated reduction in water and sewer revenue was recognized when the customer credit was applied to the utility billing account. Therefore, issuance of the refund will relieve the customer's Accounts Receivable credit balance and reduce cash but will not result in an additional reduction to current-year operating revenues. Our Finance Department will ensure the refund is recorded in accordance with applicable governmental accounting standards.
RECOMMENDATION:
Staff recommends that City Council ratify the utility billing adjustment for Marco Island Senior Living, LLC, authorize a refund in the amount of $112,742.33 for utility charges that were overbilled as a result of an administrative account configuration error, and authorize the City Manager to execute any documents necessary to process the refund.
POTENTIAL MOTION:
“I move to ratify the utility billing adjustment for Marco Island Senior Living, LLC, authorize a refund in the amount of $112,742.33 resulting from an administrative utility account configuration error, and authorize the City Manager to take all actions necessary to process the refund.”