LAKE PLACID - Some village sewer users outside village limits were mistakenly under-charged for seven quarters dating back to May 2011, and by law they now have to make back payments.
Village Mayor Craig Randall addressed the issue at Monday's Board of Trustees meeting. He said that nearly two years ago, the village created new classifications for water and sewer billing. At the time, Tyler Technologies of Texas was performing a software conversion to set up a new accounting and billing system, and creating new rate structures for sewer customers.
Randall said that when the rate structures were changed, Tyler Technologies switched metered customers outside of the village onto a flat rate. Outside customers are supposed to pay more when they exceed 2,000 cubic feet per quarter.
"The impact of that is pretty significant - it's roughly $111,000," Randall said.
It took a while to discover the mistake, according to village Treasurer Peggy Mousaw.
"It was like trying to find a needle in a haystack because not everyone was over the 2,000 cubic foot limit," she told the Enterprise Thursday. "We had to review the bills to find out why the revenue dropped."
The village's accounting office has drafted new bills for customers affected by the mistake. Randall said the bills range from "modest amounts for most residences to quite a few that are in the four-figure amount.
"My sense is, it's going to be difficult for some of our utility customers to have to make this up between now and the end of May," he said. "I'm of the opinion that there should be - and I know this is special and it's outside the range of normal activities - some consideration or some mechanism given to these customers to spread that payment that they have."
Mousaw suggested that for customers in good standing - those who have historically paid their bills on time - the village extend the deadline for payment. For customers who have a history of being delinquent in paying their bills, the extension wouldn't be granted.
The board agreed to extend the payment deadline until next fall.
"If we don't go back to do this, we're running our water department at a 30 percent loss," Randall said.
Trustee Jason Leon questioned whether the village could charge for the back payments.
"If someone charged you for an $80 (hotel) room, when the room is actually $150, two months later you can't say, 'We're charging you $70,'" he said.
Randall said that by law, the village has to collect the money; otherwise it would be considered a gift of services. Mousaw noted the village is legally able to go back as many as six years to charge for under-payments.
Mousaw said starting in May, sewer bills will be accurate.
Some trustees, including Randall and Peter Holderied, expressed frustration that customers didn't point out the billing mistake sooner. Randall said when bills are too high, the village is flooded with phone calls. When bills are abnormally low, he said, people generally don't say anything.
"Nobody complains when it's less," Holderied said. "They only complain when it's more."
"This is a tough situation," Randall said. "Ideally, we should be responsible for our activities. But this is one of those things that we're running on automated systems. It doesn't kick out an exception report if you would, or anything that would have caused our staff to say, 'Whoa, there's something wrong here.'"
The vice president of Tyler Technologies will meet with village officials on Tuesday.