By Michael Salerno
For Hometown News
PORT ORANGE - There's a plot twist in the scandal that erupted over $825,000 in lost revenue from water billing errors - now the city owes money, too.
Volusia County Council members recently raised the issue of water bills at Spruce Creek Fly-In, saying Port Orange overcharged wholesale water customers living in the residential airpark about $500,000. That's on top of an $825,000 undercharge to customers in Daytona Beach Shores since 2009.
"We've provided our assessment to (Port Orange officials)," Mary Anne Connors, Volusia County deputy manager, said in a phone interview. "We're going to meet with them to discuss how we reconcile and what the scope (of the issue) is. From there we'll work out an equitable resolution."
Both city and county leaders wish to recoup the lost revenue.
City Manager Ken Parker said he is "confident" city leaders would be able to reach an agreement with county leaders.
"We have a good relationship with the county," Mr. Parker said. "As we sit down and get through the issues, we should have a better understanding."
But Port Orange might have a hard time getting back the $825,000 in lost revenue from Daytona Beach Shores.
Mike Booker, Daytona Beach Shores city manager, said he believes it's unlikely his city council would approve paying Port Orange the lost revenue because "it was not our error."
"We certainly don't feel like any of this is our fault," Mr. Booker said. "... I don't see us writing a check for the difference."
Daytona Beach Shores leaders will make a decision once Mr. Parker gives city staff something in writing to work from, Mr. Booker said.
A breakdown of internal controls, as well as faulty water meters, caused the ongoing water billing issue, which came to light after a city employee discovered rates were being reported incorrectly. The firestorm that erupted in City Hall when the issue went public caused finance director John Shelley to submit a letter of retirement shortly after he and customer service manager Betty Barnhart were suspended, pending an investigation.
City leaders met last week to begin the process of hiring an independent auditing firm to investigate what caused the billing errors. A request for proposals or request for statement of qualifications will be brought to the City Council for consideration Tuesday, Oct. 30, with an auditor selected by December, Mr. Parker said.
Meanwhile, Mr. Parker hired another auditing firm to investigate what went wrong as it relates to personnel.
Hoping to avoid a repeat incident, Port Orange leaders are looking to correct departmental and meter reporting issues.
Mr. Parker said the organizational structures of the finance and public utilities departments would be changed to provide greater oversight on water billing and meter reading.
Under the new structures, the comptroller would oversee the accounting, purchasing and customer service divisions. Customer service would no longer be responsible for meter installation, which would be handled by the field ops division in the public utilities department.
An administrative code change that would formally alter the departmental structures would be brought to the City Council the first week of November, Mr. Parker said. "We're trying to get finance focused on financial issues," he said.
City leaders will also look into installing thousands of new water meters to replace faulty meters, including some "zero-read" meters that report no water consumption.
Most of the meters in the city come from Sensus, a North Carolina-based water meter manufacturer. But given the rate of Sensus meter failures in Port Orange and other cities, council members and city staff recommend buying meters from another company, Alabama-based Neptune Technology Group.
"Our experience (with Sensus) has been miserable," Councilman Bob Ford said. "... I'm not sure I want to be tied to this company at this point."
Mr. Parker said 200 meters from Neptune are installed in the city with no failures reported, and 300 more have been ordered. Neptune meters cost $75.80 each.
In the short-term, city leaders expect billing errors to be fixed and water meters to be replaced, which would give way to operational changes in the longer-term.
Mr. Parker said the water billing issue would continue to unfold in the weeks to come, as the city awaits the recommendations from auditors.
"It's changing daily," he said.