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Home My WebLink About09-10-39 RESOLUTION NO. 09-10-39 CITY OF OAK PARK HEIGHTS WASHINGTON COUNTY, MINNESOTA A RESOLUTION MAKING FINDINGS OF FACT AND DETERMINING THE APPEAL /CLAIM SUBMITTED BY WASHINGTON COUNTY TO THE CITY OF OAK PARK HEIGHTS RELATIVE TO WATER BILLING FOR THE PERIOD OF TIME OF 2004-2008 WHEREAS, the City has received by letter dated August 26, 2009, an appeal filed to the City Council pursuant to City ordinance under the water billing rate policies of the City, appealing an initial determination by the City Finance and Utility Department that Washington County is not entitled to any refund for an alleged over - billing of water provided to the Government Center buildings (LEC) by the City of Oak Park Heights for calendar years 2004- 2008; and, WHEREAS, the Washington County Government Center, and in particular the County Law Enforcement Center is a building that is served by City of Oak Park Heights water and sewer. The details of the systems at the County Law Enforcement Center affecting the measurement and usage of Water and Sewer Services are as follows: • The County Law Enforcement Center had seven meters that were read in order to determine the amount of water and sewer that was used at the County. Washington County for the periods of time in issue read the meters and sent the reads to the City via facsimile or phone. The City calculated the water usage based on the reads sent in from the County personnel. The meters were read every other month and billed monthly, i.e. meters read in February were billed 1 /2 of the usage for February and 1 /2 of the usage for March. Beginning January 1, 2007 the meters are read quarterly and the usage is billed quarterly The meters were changed by directive of the City to City issued meters in July 2009 and are now read electronically by the City. Washington County had the following meters for the period of time in issue: #1 West Meter #2 Compound Meter Low Flow #3 Compound Meter High Flow #4 Fire Meter #5 Sprinkler Meter #6 Cooling Tower In Meter #7 Cooling Tower Blow Down Meter The #1 West Meter and the 42 and #3 Compound Meters are added together to get the total water use for the LEC. The #7 Cooling Tower Blow Down Meter usage is subtracted from the #6 Cooling Tower In Meter usage. • The #5 Sprinkler Meter and the net usage from the Cooling Tower Meters are water only meters and the usage is deducted from the total usage of the compound meters. The #4 Fire Meter is separate and is billed for water only. Example: Previous Current Read Read Use #1 West Meter 31,298 31,298 0 #2 Compound Meter Low Flow 10,300 10,650 350 #3 Compound Meter High Flow 16,373 16,817 444 Total usage Compound Meters 794 Less - Deduction Meters #5 Sprinkler Meter 1,633 1,633 0 water only #6 Cooling Tower In Meter 2,837 2,854 17 #7 Cooling Blow Down Meter 859 859 -0 Total usage Cooling Tower Meters 17 water only Charge for water and sewer 777 • Charge for water only 17 #4 Fire Meter 88 90 2 water only Washington County is questioning the reads for the Cooling Tower Meters for 2004, the Compound Meter Low Flow in 2005 and 2006, the Sprinkler and Cooling Tower Meters in 2006, the Compound Meter Low Flow in 2007, and the West Meter in 2008. Complicating matters further the County Meters for the period in time in issue were a mixed match of meters from differing manufacturers. The meters tend to read in whole numbers by the thousands of gallons used but some had numbers or columns assigned for reads in volumes of less than thousands. Some meters having as few as 4 digits some up to 7. Meters were also during the period of time in issue rebuilt or replaced by the County without contact with the City Utility department and without confirming reads before and after. Reads reported by the County came in from a number of county staff as opposed to one person being assigned to the task. Reporting errors could occur from human error depending on the meter read, the number of digits reported, the accuracy of the reading, the accuracy of the meter and any number of circumstances. is 2 i City staff would be entirely dependant upon the accuracy of the county reported reads of all • meters in order to prepare the billings. All meters as installed within the Government Center (LEC) for the period of time in issue were installed by the County at their direction and under their supervision. WHEREAS, in order to make the computations from the readings that would be provided, all seven meters needed to be read in order to determine the total amount of water that was used at the Law Enforcement Center. The meter is read, but is a back up meter so may not have usage every quarter. The meters were read once every two months until December 31, 2006 and thereafter were read on a quarterly basis. The west meter and two compound meters were added together to get the total water usage for the LEC. The cooling tower blow down usage was subtracted from the cooling tower in usage. The sprinkler meter and the net usage from the cooling tower meters are water -only meters and are deducted from the total usage of the west meter and compound meters. The fire meter is separate and billed for water only. Compound meters are those capable of reading flows at both high and low pressure and delivery levels. WHEREAS, Washington County has submitted a claim to the City of Oak Park Heights projecting and hypothesizing that county staff misread the water meters from 2004 -2008. The County accounting department is making a projection anticipating that as many as 19,000,000 gallons were misread by the County staff relative to beginning and ending meter readings as provided to the City. They have submitted a claim to the City for $114,745 for water and sewer • services allegedly not used. WHEREAS, the County submitted documentation to the City Council consisting of the following: 1. Letter August 26, 2009 from James Schug, County Administrator 2. Exhibit #1 - Summary of Issues with projections 3. Exhibit #2- Listing of City invoices for the LEC 4. Exhibit 3a - Water meter reading worksheet- Jan -Feb 2005 (county hand written note) 5. Exhibit 3b - County staff new reading for compound meters 3/16/05 6. Exhibit 3c - Water meter reading worksheet- Mar -Apr 2005 (county editorial attached) 7. Exhibit 3d - Water meter reading worksheet- May -June 2005 (county editorial attached) 8. Exhibit 3e - Water meter reading worksheet- Jul -Aug 2005 (county hand written note & editorial attached) 9. Exhibit 3f - Water meter reading worksheet- Sep -Oct 2005 (county hand written note & editorial attached) 10. Exhibit 3g - Water meter reading worksheet- Nov -Dec 2005 (county hand written note & editorial attached) 11. Exhibit 3h - Water meter reading worksheet- Jan -Feb 2006 (county hand written note • & editorial attached) 3 • 12. Exhibit 3i - Water meter reading worksheet- Mar -Apr 2006 (county editorial attached) 13. Exhibit 3j - Water meter reading worksheet- May -Jun 2006 (county hand written note & editorial attached) 14. Exhibit 3k - Water meter reading worksheet- Jul -Aug 2006 (county hand written note & editorial attached) 15. Exhibit 4 Calculated (Projected) total LEC Water usage 12/03 -12/08 16. July 24, 2009 letter to Harley Will from Judy Holst, City Finance Director 17. May 15, 2009 letter to Harley Will from Judy Holst, City Finance Director 18. October 8, 2009 letter from Harley Will to the City Council WHEREAS, the City Staff submitted documentation to the City Council consisting of the following: 1. Identification of Meters current and prior and locations at LEC County Building (3 pages) 2. City Finance and Utility Department - Washington County Utility billing Response to August 26, 2009 Letter. 3. Exhibit A- Summary of issues identified with invoice calculations and meter readings (Meter reading date 03/08/04 4. City Exhibit B - Response to Washington County Exhibit 3a and Exhibit 3b — Readings for Jan — Feb 2005 5. City Exhibit C - Response to Washington County Exhibit 3c — Readings for March — • April 2005 6. City Exhibit D - Response to Washington County Exhibit 3d — Readings for May — June 2005 7. City Exhibit E - Response to Washington County Exhibit 3e — Readings for July — August 2005 8. City Exhibit F — Response to Washington County Exhibit 3f — Readings for September — October 2005 9. City Exhibit G — Response to Washington County Exhibit 3g — Readings for November — December 10. City Exhibit H — Response to Washington County Exhibit 3h — Readings for January — February 2006 11. City Exhibit I — Response to Washington County Exhibit 3i — Readings for March — April 2006 12. City Exhibit J — Response to Washington County Exhibit 3j — Readings for May — June 2006 13. City Exhibit K - Response to Washington County's Exhibit 1 Issue(s) Identified with Calculation and Meter Readings — Meter Reading Date 6/30/08 — 14. City Exhibit L - April 9, 2008 Letter to Washington County, 5 -13 -08 Facsimile Transmittal to Dottie, Financial Services, 2006 — 2007 LEC Adjustment Calculations 15. City Exhibit M — May 15, 2009 Letter to Harley L. Will, Accounting & Finance Director, Washington County • 4 NOW THEREFORE BASED UPON THE RECORD BEFORE THE CITY AND ALL OF THE FILES RECORDS AND PROCEEDINGS HEREIN THE CITY COUNCIL MAKES THE FOLLOWING: FINDINGS OF FACT 1. The County claim relative to water and sewer usage fees is projected upon a number of fact premises which they assume to be correct in order to present their claim. Those fact premises hypothesized in their claim are as follows: 1.) that County staff for a period of 2004- 2008 consistently misread the meters, either sequentially or individually, in reporting volumes of water used verbally reporting errant readings to the City staff of the City of Oak Park Heights; 2.) the County claim is hypothesized on a principal or premise that the meters, as read by the County staff were consistently functioning, calibrated and accurate; 3.) the County claim relative to the overcharge does not come from the County department relative to the reading and supervision of the meters within the County building, but comes from the bookkeeping or accounting department, and then only as a result of filing for a refund of sales tax with the State of Minnesota. 2. The County accounting department submitting the claim has no new evidence relative to their claim. Their claim is based upon a hypothesis of projected, inaccurate readings by County staff. The projection is based upon the assumption that the County could not have used the volume of water that the County staff initially reported to the City of Oak Park Heights which • precipitated the billings received. 3. The meters in issue all have a finite number of digits in their reading process, i.e. four through seven numbers in digit, and then the meter rolls over. Consequently, if a meter is based upon a 5 -digit recording, after the 5- digits in the meter are exhausted, the meter would roll over again and it would begin anew at 00001. The County staff never kept records with regard to how many times the meters would roll over in the process of making their reads. County staff could have made and reported reads from less than whole numbers in those meters that recorded usages at less than 1000 gallons. 4. That the City of Oak Park Heights has received other claims with the County Law Enforcement Center with regard to excessive volumes of usage when inmates would block sewer pipes or otherwise take vandalism type actions so as to create spillages and overflows within the wastewater and water supply systems of the County. 5. That the County acknowledges that the seven meters that they rely upon within the LEC for reading water usage, have never been calibrated, nor demonstrated to be accurate during the period of time of 2004 -2008. County meters have been replaced or rebuilt by County vendors or staff that did not notify City personnel of a change of meter or report before and after readings, period of disconnection or the like. 6. That at times throughout the period of 2004 -2008, City staff questioned the County with • regard to several readings that were being reported, and asked County staff to verify the readings 5 i that had initially been reported to the City staff. At all such times, the County staff either did not respond, responded that the readings as originally provided were accurate or supplied new numbers. 7. That the County's claim is based upon hypothesis and projection and there are no recorded meter readings that were provided mechanically or electronically, and the only records relative to readings supplied contemporaneously with the period of time in which the readings were being made, with all of those being were verbally reported from the County staff to the City staff pursuant to the billing process then in effect. 8. That the City did in billing periods correct readings from the County staff that appeared to be inaccurate to City staff throughout the period of time of 2004 -2008 correcting what appeared to be errors in readings, and giving credit to the County for water usage reported but determined by City staff to be incorrect. 9. As to the County projections and hypothesis of its claims the City Council determines: Exhibit 3A and Exhibit 313 — Readings for January — February 2005. As an example, City staff questioned readings for January through February 2005. The original compound meter flow read for February was sent in by the County as 16,287. Read on 12/31/04 was 9,866. The City questioned the meter read, and the County then re -read the meter and the City received a new read of 0300. The meter had obviously rolled over when it hit 9,999 gallons, and the February read was 10,300. The usage was 434. The billing was determined by City staff to be correct. . The City Council determines that there is no reliable evidence to dispute this determination. Exhibit 3C — Readings for March — April 2005. For the readings of March — April 2005, the compound meter flow read for April was sent in by County staff to be 0650. Because the meter rolled over on the January — February 2005 to 10,000, the meter for April was 10,650. Usage was 350. Billing was correct. The City Council determines that there is no reliable evidence to dispute this city staff determination. Exhibit 3D - Readings from Mav — June 2005. Compound meter flow read for June was sent in at 10,968. Usage was 350. City staff determined that the meter readings and the billings generated therefore was correct. The City Council determines that there is no reliable evidence to dispute this city staff determination. Exhibit 3E — Readings for Julv — August 2005. The read for the compound meter flow that was sent in by the County was 16,102. The City did not question the County read at that point; nor did the County staff question its read of the meter or the usage amount. Use was up for the low flow meter but was also up at the same time for the compound high flow meter. The high flow meter usage was February 2005 at 530; April 2005 at 444; June 2005 at 823; and August 2005 at 1,260. As is demonstrated by these reads, the meter fluctuates and no one questions the read from the County staff perspective. If a read resulting in a negative usage would have been submitted, the City utility system would have identified the read and it would have been investigated. However, the County staff making the reads and supplying the data precluded that 6 I by the nature of the reports that they made. The City Council determines that there is no reliable evidence to dispute this city staff determination. Exhibit 3F — Readings from September — October 2005. The compound meter flow read by the County staff that was sent in was 2,198, and then 2,197,790. The city utility clerk assumed not use the last two digits and rounded to 21,980. The usage was 5,878. The August use was 5,134 and consistent with past usage; therefore the utility clerk did not question the read. The read was not unreasonable compared to the August dates. The compound meter flow was 1,106, which was less than the August flow, but more than the previous three reads. The County staff also did not question the usage.. The City Council determines that there is no reliable evidence to dispute this city staff determination on this matter. Exhibit 3G — Readings from November — December 2005. The read for the compound meter was sent in from the County staff at 25,080. Usage was 3,100. Again, this was not unreasonable compared to the August and October reads if anything was considered less than the previous two usage amounts. The compound meter flow was 417; it was also lower than the August and October reads. Again, if a negative usage had been calculated or reported by the County staff, the City would have verified the County staff reads and reinvestigated the problem. The City Council determines that there is no reliable evidence to dispute this city staff determination on this matter. • Exhibit 3H — Readings from January — February 2006. The read for the compound low flow meter was sent in by the County staff at 30,570. The utility billing clerk questioned the read and thought it was too high. Usage would have been 5,490. The utility billing clerk for the City verified the read with Mr. Dave Beaver at the Washington County LEC on March 16, 2006. The utility billing clerk was informed by the County staff as of that date was 31,135. The County was billed based upon the read as sent in at 30,570. The City staff has supplied the read notes received from the County staff and the notes verifying same. The City Council determines that there is no reliable evidence to dispute this city staff determination on this matter. Exhibit 3I — Readings from March — April 2006. The read for the compound meter flow was sent in by the County at 34,170. The utility billing clerk did not question the read as the usage was lower than the February 2006 usage. Usage was at 3,600. The City Council determines that there is no reliable evidence to dispute this city staff determination on this matter. Exhibit 3J — Readings from Mav — June 2006. The reads were corrected by the Washington County staff. The billing was correct at that time. At no time did the County staff request that the City adjust for previous incorrect reads sent in by the County staff, or question the billing sent out by the City. The City Council determines that there is no reliable evidence to dispute this city staff determination on this matter. 10. At the time that the City was completing the 2007 annual audit, the City staff discovered an error that had been made by the City on the County water and sewer billings for 2006 and 2007. Adjustments were made to the March 31, 2008 utility billings to reflect the billing errors I for 2006 and 2007. These adjustments matched the revised request in Washington County Exhibit 2, from June 2006 — December 2007. A letter dated April 9, 2008 was sent to the County by the City's accountant informing them of the error and enclosing the current utility billings with the water and sewer adjustments. The City received no response from the County at that time. On March 11, 2009, the City staff met with Ms. Ann Hudson from the Washington County accounting department who provided the City with the County's documentation for the first time for a claim for a refund at the LEC's utility bills, which the City's staff reviewed and responded to. Exhibit 19 is a copy of the City letter to Washington County dated April 9, 2008. The June 30, 2008 reads as sent in from Washington County show usage on the west meter and the compound meters of 1,862, and a deduct amount from the cooling tower and cooling blow down meters of 135. The total usage of water and sewer is 1,727. 11. That the County's delay in presenting their claim and not correcting any perceived errors in the readings of the various meters over the period of several years has made it impossible for anybody to verify the following: 1.) whether or not the meters were actually misread by the County staff, 2.) whether or not the meters were actually functioning in the manner that they were projected to do; 3.) whether or not there are any leaks, faults, or other failures in the system that could have precipitated an error. 12. That the County has engaged in several construction projects from 2004 -2008 which could have easily impacted water usage, as well as the accuracy and deployment of meters within the County's meter systems within the LEC. The potential for those errors and anomalies are not accounted for in the County's projection. County building improvements and modifications thru • out the same period of time could also have impacted readings and usage 13. There are no affidavits signed by County personnel actually charged with the task of conducting the readings and submitted to the City of Oak Park Heights acknowledging any errors in meter -reads by County staff. 14. That the County has not supplied the City with reasonable documented evidence that indicates in any regard that the meter readings implemented by the County staff were in error, or precipitated an error in billing when reported to City staff. 15. City staff acted promptly and reviewed billings reasonably when reported by County staff, questioning them when appropriate, and making adjustments and credits to the County for water usage caught by the City staff, which appeared to be an anomaly and incorrect. 16. At times County staff did not respond to City staff on a timely basis when City staff questioned reads from the various meters and systems implemented by the County on their premises, being their meters, and read by their personnel. That the error by the County by not responding correctly to City staff, re- reading meters when requested to do so, or responding to the City when asked to perform certain functions relative to meter readings has precluded any opportunity to reasonably reevaluate this claim for the period of time in issue. 17. That the County has delayed to the prejudice of the City in making this claim on a timely basis, and has done so based upon hypothesis and projection as opposed to data and evidence. 8 RESOLUTION NO. 09-10-39 CITY OF OAK PARK HEIGHTS WASHINGTON COUNTY, MINNESOTA A RESOLUTION MAKING FINDINGS OF FACT AND DETERMINING THE APPEAL /CLAIM SUBMITTED BY WASHINGTON COUNTY TO THE CITY OF OAK PARK HEIGHTS RELATIVE TO WATER BILLING FOR THE PERIOD OF TIME OF 2004-2008 WHEREAS, the City has received by letter dated August 26, 2009, an appeal filed to the City Council pursuant to City ordinance under the water billing rate policies of the City, appealing an initial determination by the City Finance and Utility Department that Washington County is not entitled to any refund for an alleged over - billing of water provided to the Government Center buildings (LEC) by the City of Oak Park Heights for calendar years 2004- 2008; and, WHEREAS, the Washington County Government Center, and in particular the County Law Enforcement Center is a building that is served by City of Oak Park Heights water and sewer. The details of the systems at the County Law Enforcement Center affecting the measurement and usage of Water and Sewer Services are as follows: • The County Law Enforcement Center had seven meters that were read in order to determine the amount of water and sewer that was used at the County. Washington County for the periods of time in issue read the meters and sent the reads to the City via facsimile or phone. The City calculated the water usage based on the reads sent in from the County personnel. The meters were read every other month and billed monthly, i.e. meters read in February were billed 1 /2 of the usage for February and 1 /2 of the usage for March. Beginning January 1, 2007 the meters are read quarterly and the usage is billed quarterly The meters were changed by directive of the City to City issued meters in July 2009 and are now read electronically by the City. Washington County had the following meters for the period of time in issue: #1 West Meter #2 Compound Meter Low Flow #3 Compound Meter High Flow #4 Fire Meter #5 Sprinkler Meter #6 Cooling Tower In Meter #7 Cooling Tower Blow Down Meter The #1 West Meter and the 42 and #3 Compound Meters are added together to get the total water use for the LEC. The #7 Cooling Tower Blow Down Meter usage is subtracted from the #6 Cooling Tower In Meter usage. That there is no evidence to support the accuracy of the County's hypothesized claim. 18. That the City staff has reviewed the county materials reasonably requesting background data and information where available. BE IT RESOLVED BY THE CITY COUNCIL FOR THE CITY OF OAK PARK HEIGHTS AS FOLLOWS: That the request of Washington County for a refund in utility charges for the period of time of 2004 to 2009 is denied. PASSED BY THE CITY COUNCIL FOR THE CITY OF OAK PARK HEIGHTS THIS i %; SAY OF Ci &D lot +- 2009 David Beaudet, Mayor Z A /s. , rt y Administrator i 9 That there is no evidence to support the accuracy of the County's hypothesized claim. 18. That the City staff has reviewed the county materials reasonably requesting background data and information where available. BE IT RESOLVED BY THE CITY COUNCIL FOR THE CITY OF OAK PARK HEIGHTS AS FOLLOWS: That the request of Washington County for a refund in utility charges for the period of time of 2004 to 2009 is denied. PASSED BY THE CITY COUNCIL FOR THE CITY OF OAK PARK HEIGHTS THIS i %; SAY OF Ci &D lot +- 2009 David Beaudet, Mayor Z A /s. , rt y Administrator i 9