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Water Company Pays City $60,839 to Help Settle Sewer Billing Mix-Up

Posted on: Wednesday, 29 March 2006, 12:00 CST

By Michelle Ku, The Lexington Herald-Leader, Ky.

Mar. 29--Kentucky American Water gave the city a check for $60,839 Monday to help resolve a foul-up over sewer billing.

In November, Kentucky American gave the city a check for $463,067. With the new payment, Kentucky American has transferred a total of $523,906 to the Urban County Government to resolve the billing dispute.

Kentucky American plans to give the city an additional $109,812 from a fee called an "extra strength" charge, a sewer charge added to some larger commercial, industrial and institutional customers' accounts to pay for extra water treatment.

Donna Counts, the city's finance commissioner, said she was satisfied with Kentucky American's review of the billing errors, but still plans to have the city's internal audit division conduct its own review.

"We welcome the review," said Herb Miller, vice president and attorney for Kentucky American. "All of our work papers are out and available to them."

Miller added: "If we find anything that's still owed, we'll pay it."

In the fall, city officials discovered that the water company had not been billing some new residential properties for sanitary sewer service. Kentucky American bills residents for sewer service on their water bills

The error resulted in a nearly $1.3 million discrepancy in sewer-fee collections during the fiscal year that ended June 30.

The difference between what the water company plans to pay the city and the $1.3 million figure comes from a number of factors, including a decline in water usage which led to a decline in sewer billing, reporting differences between fiscal years and overbilling in one fiscal year which affects the next year's overall collection, Miller said.

To ensure that billing problems do not happen in the future, the company plans to name a local liaison who will work directly with the city on sewer billing matters.

Kentucky American has also begun charging the sewer fee as soon as water service is connected.

The billing error occurred when the water company did not upgrade its information after new residential properties were added to the sewer system.

During its review of the situation, Kentucky American found 4,056 properties, totaling 6,137 accounts, that were not coded properly for sanitary sewer billing.

The water company does not plan to back-bill customers who were never charged a sewer-user fee, Miller said.

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Copyright (c) 2006, The Lexington Herald-Leader, Ky.

Distributed by Knight Ridder/Tribune Business News.

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Source: Lexington Herald-Leader (Lexington, Ky.)

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