By Michael Salerno
For Hometown News
PORT ORANGE - A presentation on the ongoing water billing fiasco revealed the city lost more money on top of an $825,000 loss from undercharging wholesale customers in Daytona Beach Shores.
Finance department staff said a change was made in 2009 to the rate table that determines how much customers in Daytona Beach Shores are charged, but that change was supposed to be made in 2007. The error, which was discovered by an investigative auditor, caused a loss of $200,000 in revenue.
"We calculated there was a period between 2007 and 2009 that the incorrect rates were billed for Daytona Beach Shores apartments," Comptroller Stella Gurnee said. She went on to say the effective date for the system's implementation was backdated to 2007, but "the system doesn't go retroactive to calculate (rates). It only goes from the date you change it forward."
The billing errors - the result of a breakdown of internal controls and faulty water meters - have not only cost the city more than $1 million, but also caused the city to owe $500,000 to Volusia County for overcharging Spruce Creek Fly-In residents.
Staff discovered the problem last month when a city employee brought it to City Manager Ken Parker's attention, and it resulted in the suspensions of finance director John Shelley and customer service manager Betty Barnhart. Ms. Barnhart was identified as the person who logged and backdated the spreadsheet containing the incorrect information causing the $200,000 error.
Mr. Shelley is on leave after announcing he would retire Jan. 11, while Ms. Barnhart was reassigned to a position in the parks and recreation department beginning Monday. City spokesman Kent Donahue said Ms. Barnhart was reassigned due to the auditor's investigation taking longer than 30 days, the maximum amount of time an employee can be suspended according to civil service rules.
But a concerned citizen doesn't want her working for the city at all.
Small business owner Corey Berman called for the city manager to fire Ms. Barnhart, saying that's what he would do if a similar incident occurred at his business.
"The minute I see $10 gone, people are fired," Mr. Berman said.
Mr. Berman also told city leaders he contacted Gov. Rick Scott's office, the U.S. Department of State and the Florida Department of Law Enforcement about the situation. He believes other agencies should look into the finance department's issues to see if any actions taken rise to a criminal level.
As city council members await the auditor's findings, they remain disturbed by the issue and fear more problems will be discovered. Councilman Dennis Kennedy asked for any information found in the forensic audit to come before the City Council first, not city staff, so it can be made available to the public.
"We need to know about these things," Mr. Kennedy said. "We continue to find problems. I don't think anyone up here (on the council) has a comfortable feeling about this. We're at the point where we're concerned about what's next."
Although he believes there is no evidence of malfeasance, he finds the issues are "serious enough" due to the large amount of money involved.
"I don't know what our entire dollar amount is on this entire problem, but I know we've gone way past a million dollars already," Mr. Kennedy said. "This is money that shouldn't have been wasted in our budget."