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APPROVE A MOTION TO AUTHORIZE A REFUND TO THE PORT OF STOCKTON FOR AN OVERCHARGE OF INDUSTRIAL WASTEWATER USER FEES
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RECOMMENDATION
It is recommended that the City Council approve a motion authorizing the City Manager to authorize a refund to the Port of Stockton in the amount of $91,953.87 for an overcharge of industrial wastewater user fees.
It is further recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of this motion.
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Summary
In September 2024, City of Stockton Municipal Utilities Department (MUD) Environmental Control (EC) staff noted an error had been made in the calculation of monthly charges paid by the Port of Stockton for industrial sewer utility services. Upon review of the monthly billing, it was determined that the calculation error impacted sewer utility bills between March 2024 and August 2024. In total, the Port of Stockton was billed for $91,953.87 in overcharges due to the calculation error in monthly wastewater flows. This type of wastewater service fee is eligible for a refund under Stockton Municipal Code section 3.60.020. To avoid future overcharges, the EC staff have implemented a system to improve data-entry processes to prevent any future overcharges.
If approved by the City Council, this motion authorizes a refund to the Port of Stockton in the amount of $91,953.87.
DISCUSSION
Background
The City of Stockton Municipal Utilities Department (MUD) is responsible for the City’s sanitary sewer system including collection, treatment and recovery of wastewater. Sewer or wastewater rates for commercial, institutional, schools, and industrial customers are charged a fixed monthly rate and a variable consumption rate. The variable consumption rate is designed to recover the costs of treating the amount of wastewater discharged into the wastewater system (water flow) and wastewater constituent types (strength) generated by each commercial, institutional, and industrial customer. The Port of Stockton is classified as an industrial user and is charged accordingly. The City of Stockton Administrative Services Department - Utility Billing Division is responsible for the monthly billing of industrial wastewater customers. The billing amounts reflect the prior month’s charges.
Present Situation
In September 2024, EC staff noted a discrepancy in the data for the Port of Stockton’s monthly wastewater flow. Upon further review, it was determined that a flow entry of 8.66 million gallons per day (MGD) each month was erroneously entered to Port of Stockton sewer utility bills between March 2024 and August 2024. The table below outlines the reconciliation of this error and the total refund amount due to the Port of Stockton.
|
Month |
Corrected Flow (MGD) |
Amount Billed |
Corrected Billing |
Refund Due |
|
March 2024 |
7.19 |
$31,270.27 |
$25,992.87 |
$5,277.40 |
|
April 2024 |
6.61 |
$31,270.27 |
$23,872.61 |
$7,397.66 |
|
May 2024 |
4.83 |
$31,270.27 |
$17,450.56 |
$13,819.71 |
|
June 2024 |
2.84 |
$31,270.27 |
$10,283.57 |
$20,986.70 |
|
July 2024 |
2.56 |
$31,286.19 |
$9,267.51 |
$22,018.68 |
|
August 2024 |
2.44 |
$31,286.19 |
$8,832.47 |
$22,453.72 |
|
TOTAL |
$187,653.46 |
$95,699.59 |
$91,953.87 |
Wastewater service fees are eligible for a refund under Stockton Municipal Code Section 3.60.020-A.2. Refunds
“Where the money paid was not required by law, ordinance, resolution or regulation, or was erroneously or illegally collected, or received by the City through mistake, inadvertence or error of law or fact”
To avoid future overbilled amounts, the EC staff have implemented a password-activated system to better control access and improve data-entry processes to prevent any future overcharges.
FINANCIAL SUMMARY
The refund of $91,953.87 will be issued to the Port of Stockton from the Wastewater Fund as follows: Municipal Wastewater Utility/Charges for Service - Industrial.
This action has no impact on the General Fund, or any other unrestricted fund.