City flushes out old debtors

As the city of Atlanta considers tripling rates to fix its sewers, it's also looking at delinquent accounts.

The Atlanta Journal-Constitution

As Atlanta City Council weighs whether to triple base water and sewer rates today, the city has yet to tap one possible source of revenue for a massive sewer project: customers who don't pay.

City officials say their records show as much as $50 million in uncollected water and sewer bills from several thousand accounts, but they also acknowledge the records are shoddy and likely inaccurate.

No. 1 on Atlanta's delinquency list is the Fulton County Jail, which owes nearly $1.5 million, according to the city's computerized billing database.

But Jack Ravan, the man who runs the city's water and sewer operation, says there are too many questions about the jail's account to compel payment. For one thing, the county complained that the meter was broken.

Atlanta is hiring a contractor to overhaul high-volume meters and then monitor them to establish a typical consumption rate. The old bills will be adjusted based on that rate.

But many of the alleged debtors are smaller residential users and businesses that racked up tens of thousands of dollars in unpaid bills. The city will have to sift through those accounts to determine who owes what. That will be difficult because in many cases the bills are inaccurate, owing to a broken meter and a billing system that was based on estimating water usage instead of actually reading meters.

Then comes the nettlesome task of collection.

Ravan, who is commissioner of the Watershed Management Department, said the city has brought in a private collection company and has begun a water turnoff policy for people who don't pay.

The estimated millions have gone uncollected even as city officials are asking paying customers to dig deeper for a massive upgrade of the city's pipes and treatment plants. Mayor Shirley Franklin also wants to spend more money hiring and training staff.

Franklin has asked for a tripling of the base water and sewer rates. Even some Wall Street bond analysts wonder whether that much is collectable given the city's poverty rate: 24 percent among individuals and 21 percent among families.

The higher rates would cover the debt on more than $2 billion in construction and provide money for Watershed Management operations.

The debt accumulated because the water contractor, United Water Services Unlimited Atlanta, was unwilling to shut off service when it knew people didn't pay, said Melinda Langston, director of customer and government relations at Watershed Management. United Water averaged a collection rate of 94 percent, Langston said. That compares with the 98.5 percent Atlanta maintained before handing control to United Water in 1999, she said.

Langston acknowledged that the city could have a hard time collecting from customers who have canceled service and moved away -- and no longer fear a shutoff.

"It's not realistic to think we can collect all of that," Langston said. "We're not even at a point where I can guess how much we can get, or even collect, out of that 50 [million dollars]. But we're going after every bit of it."

To succeed, the city will have to squeeze money from debtors such as financially strapped Morris Brown College, which lost its accreditation last year. City billing records show the college started falling behind on payments four years ago, yet its water service was never shut off. As of Dec. 31, it owed $121,694.

Unlike many large accounts, the records for Morris Brown show no evidence of a billing dispute. But so many large accounts are disputed that Atlanta officials can't say how much of the paper debt is real.

Fulton County officials say they are paid up in full and that they have the records to prove it.

"We really want to resolve this with the city, but at this particular point we don't have a whole lot of confidence in the reports that they send us," said Rod Cantrell, financial systems manager in the county's General Services Department.

The county sends a lump payment for its water and sewer bills, and the city has misapplied the money, said Willie Hopkins, the county General Services director. The city overpaid some accounts and underpaid others, he said.

One county property that uses an average of $17,000 a month in water showed a credit of $29,000 on the most recent bill, Hopkins said. Another property, an undeveloped piece of land near Charlie Brown Airport, owes $30,000, though it doesn't use water, he said.

The city allowed a reporter to inspect a handful of accounts at a city computer terminal. A review of five selected at random from a list of the 200 biggest debtors showed mistaken or disputed bills with three. There were notations showing broken meters on two accounts.

In a residential account that showed an $80,309 debt as of Dec. 2, there is a notation indicating that an inspector recently realized the property no longer exists. The bill was for a house on Longleaf Drive in Buckhead.

Not only is the house gone, the whole block has been redeveloped into a subdivision. The meter hadn't been read since Dec. 15, 1999, and all the bills since then were estimated by the computer. Water officials recently adjusted the bill back to the $7,581 balance that had accrued by that date, and sent a message to the city finance department to file a lien against the property.

It's unclear whether the customer can ever be made to pay, since the city apparently doesn't know who the person was. The name field in the account was blank.

Ravan said he and his staff can't vouch for the data because, "No. 1, we weren't here when it was created."

United Water left more than eight months ago, and at some point city officials will have to take responsibility for the system's problems, said Councilman Derrick Boazman. He is among the eight council members who oppose Franklin's water and sewer rate increases.

The councilman said he recently got a call from a constituent who hadn't received a bill in five months.

"I have not seen any changes. We still have brown water running into people's houses. We still have meters that take months to install. And we still have a collection rate that I understand hasn't improved," the councilman said.

Atlanta officials say they are making improvements, but say it'll be difficult to make much progress without money for new computer equipment. That is why the rate increases must take place, they say.

Langston said the city recently hired staffers to turn off water service for delinquent accounts. "We have a fairly aggressive termination policy in place," Langston said. "We're terminating water service every day."