By John Schaffner

An internal audit of the city of Atlanta Department of Watershed Management showed mishandling of rate increases and billing, and improper cutoffs of service, including to many Buckhead residents.

The audit, ordered earlier this year by City Council, confirmed what everyone believed — that all those complaints were true. But Department of Watershed Management Commissioner Rob Hunter claims the problems stemmed from his department simply complying with City Code.

Members of the City Council’s Utilities Committee, agreed Sept. 1 to work with DWM on legislation to revamp the city’s billing rules.

The dispute began July 1, 2008, when the city was supposed to apply a 27.5 percent rate hike to monthly bills. However, the department wasn’t prepared and didn’t apply the hike to bills until 30 days later.

In December, the department decided to go back and bill customers for the amount it would have collected if it had properly applied the new rates to accounts on July 1. That amount apparently was $7.2 million.

City Auditor Leslie Ward said the department’s own records show the change was poorly communicated, that the back-billed amount was often erroneously listed as late and that triggered some service shutoffs that should not have occurred. The number of those erroneous shut-offs was not listed in the audit.

Hunter initially disputed the audit’s findings, but agreed at the Sept. 1 meeting the department had made a number of mistakes and had failed to communicate well with city water customers. He said 124 accounts were cut off because of the back-billing controversy.

Ward’s 51-page audit report, released Aug. 31, contains four recommendations that basically suggest the department review and revamp billing regulations so that rules are clear and deadlines certain. The recommendations also suggest the city find residents whose water was improperly cut off and refund any fees they incurred. Ward only sampled some accounts. So, she did not estimate what the cost might be to the city.

Commissioner Hunter has been consistent throughout the lingering controversy. He has steadfastly maintained that every action taken by his department was authorized by city code and correct.

The council ordered Ward’s audit earlier this year in reaction to a series of complaints about service being shut off, especially in Buckhead.

Ward’s audit says retroactive billing (“back billing”) of the rates set in July 2008 led to hundreds of shutoffs from December 2008 through February 2009, shutting off accounts that were not actually delinquent. “Their accounts were apparently flagged for shutoff based on the date that the back-billed adjustment was posted rather than their bill due dates. Because the customer information system calculated the delinquency from the date that the adjustment was posted, by the time these customers received the bill with the back-billed amount listed, the amount due was already a week or more into the 30-day window” after which service may be terminated.

The audit report also says many “were not notified prior to shutoff. City code requires the department to provide notice to customers before discontinuing water service.

The problems in Watershed Management created an uproar within the Buckhead community where residents weren’t forewarned of the shutoffs or why they had received extraordinarily high bills in December and January.