COLUMBIA — Doug Miller, manager of University Place Apartments, noticed something amiss in his utility bill in 2008.
His base rate doubled from the previous month.
"We were told that that’s the new rate,” Miller said. "I believe their explanation was we were paying the wrong rate before, and we should be happy we got to pay the rate we did. We didn't have much choice in the matter."
Miller wasn’t the only one with a rude surprise.
In a Nov. 30 sewer task force meeting, Curt Kirtley, property manager for Broadway Communities, expressed concern that his sewer bill had gone from $100 per month to $1,000 per month. He said he felt he was being treated unfairly, and some apartments had not been given the same “rate shock.”
According to the meeting minutes, Mark Stevenson, president of Real Estate Management Inc. and member of the sewer task force, said “how differently and unfairly owners of many master metered apartments and mobile home parks were treated” in sewer billing.
Before 2008, the city charged a single base rate both to master metered accounts and individually metered accounts. This meant complexes with scores of individual units, such as University Place Apartments or MU, paid the same base charge as a single family home.
MU paid $4.35 per month for its entire base charge until 2008, when an audit revealed it used the equivalent of 8,100 base charges, which would have cost $60,000 per month. The university has agreed to pay the equivalent charge in increasing increments over 10 years. Public Works Director John Glascock said the agreement is in its third year, and MU now pays about $15,000 per month for its base charge.
An ordinance, which will come before the City Council in a public hearing Monday, will attempt to rectify the uneven charges some apartment owners have had to pay.
The city currently separates sewer bills into a base rate, which is the same for all customers, and a volume rate, which varies by use.
The new plan proposes to charge users with master meters a base rate according to the size of the meter. Users with larger master meters will pay a larger base rate. It will also raise the volume rate by about 10 percent.
Master meters, which are often used in apartment and office complexes, divert several users’ sewage through one pipe. Individual meters are most often used in single-family residences, though some apartments use them, too.
University Apartments, along with 823 other sewer accounts, uses a master meter.
Stevenson said there has yet to be any additional sewer charge billed to any master metered commercial property, meaning the additional charge was billed only to apartment complex owners.
Columbia Sewer Superintendent Bill Weitkemper, who first discovered that master metered accounts, including MU's, were only being charged an individual rate, said the city’s new plan for sewer billing aims “to keep the city from getting sued.”
Weitkemper said a 2007 audit of residential accounts identified 4,500 units that weren’t being billed properly. He said only a fraction of units were sent updated bills.
Both Miller and Kirtley were upset MU got a 10-year agreement with the city and commercial users did not get a rate increase, while Miller and Kirtley’s bills went up with no warning.
“If they make a concession to one person, say MU, why wouldn’t they do that to other people?” Miller said. “I want to know how they chose which people got billed in 2008. Did somebody have an axe to grind, not liking these individuals, and they basically got screwed? I want to know who made that decision."
Repeated calls to the city manager, the Public Works Department and the city Finance Department did not yield how many complexes were billed the extra charge in 2008 and how many weren’t. The calls also did not yield how the complexes who were billed an extra charge were chosen or who made that decision.
“Mistakes were made in billing,” Glascock said. “There’s no question about it. I don’t know why those owners were billed separately."
Miller said after seeing the latest proposal, he thinks "there may have been a cover-up."
"How long have we been overcharged?" Miller said. "Is this their way of making up for it?"
City Finance Director John Blattel said he is aware of Miller and Kirtley’s complaints.
“I think the new bill will solve the problem,” Blattel said.
He said he doesn't think there will be any reimbursement for apartment owners who were overcharged.
The new bill seeks to “correct all these inequities,” Glascock said. Users with master meters would be billed a modified base rate according to the size of their meter.
But Weitkemper said the new bill doesn’t correct the inequities.
“Under the new ordinance, a master meter with a 4-inch pipe and 174 apartments would pay $184,” Weitkemper said. “But if they had individual meters, each would pay the lowest base charge or $5.52 each, meaning the total they would pay would be $960. The same building would pay much less, just because they have a master meter.”
Public Works Senior Budget Analyst Sarah Talbert said the task force committee "felt this was a fair method of charging the base charge because it costs less to go out and read and bill for one meter than it does to go out and read and bill for 174 meters."
Weitkemper also pointed out a loophole that would allow some owners with master meters to downgrade their meter size and pay a smaller base charge. He said the potential annual loss of base charge revenue that could result from the proposed bill could exceed $319,808.
Weitkemper said the difference in revenue would be made up from individually metered accounts.
“If it costs $10 million to run the city sewer, we’ll get that one way or another,” Weitkemper said.