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Item No. 8.
| MEETING DATE: 03/21/2022 |
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| TO: | HONORABLE MAYOR AND COUNCILMEMBERS |
| FROM: | JIM SADRO, CITY MANAGER By: Elias Saykali, Public Works Director |
| SUBJECT: | APPROVE AND AUTHORIZE THE MAYOR TO EXECUTE A SETTLEMENT AGREEMENT AND RELEASE BETWEEN TAPESTRY COMMUNITY HOMEOWNERS ASSOCIATION AND THE CITY OF LA HABRA
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RECOMMENDATION:
That the City Council:
A. Approve and authorize the Mayor to execute a settlement agreement and release between Tapestry Community Homeowners Association and the City of La Habra in the amount of $190,416 for water service overcharges; and,
B. Approve and authorize staff to issue a check in the amount of $190,416 from the Water Enterprise Fund to the Tapestry Community Homeowners Association.
DISCUSSION:
The Tapestry Community (Community) is located on the northwest corner of Idaho Street and Lambert Road. Water service to this private community of 113 homes is provided through two six-inch metered connections owned by the City. The meters are read monthly by City staff and water bills are generated based upon the monthly consumption. Water bills are then sent to a third-party property management firm who pays the water bills. The management firm sub-meters each home within the community and contracts with a third party to read the private water meters at the beginning of each month. The management firm then bills each homeowner according to the sub-meter consumption.
In December 2021, the management firm noted a discrepancy in the water consumption billed by the City compared to the cumulative monthly consumption recorded by their private sub-meters. Upon noticing this discrepancy, the management firm contacted City staff to request an evaluation. Staff investigated the disputed billing and determined that monthly meter consumption of one of the City's six-inch meters was being recorded in increments of ten cubic feet whereas the City bills in one hundred cubic foot increments. The erroneous differential was calculated over several billing cycles and staff determined that the Community had been overcharged in the amount of $190,416.
To prevent further misreadings of the six-inch meter, staff adjusted the meter equipment to avoid future erroneous misreads, provided additional training to staff responsible for meter reads, and will be modifying the existing meters in the future so that water usage data can be recorded and collected electronically.
In December 2021, the management firm noted a discrepancy in the water consumption billed by the City compared to the cumulative monthly consumption recorded by their private sub-meters. Upon noticing this discrepancy, the management firm contacted City staff to request an evaluation. Staff investigated the disputed billing and determined that monthly meter consumption of one of the City's six-inch meters was being recorded in increments of ten cubic feet whereas the City bills in one hundred cubic foot increments. The erroneous differential was calculated over several billing cycles and staff determined that the Community had been overcharged in the amount of $190,416.
To prevent further misreadings of the six-inch meter, staff adjusted the meter equipment to avoid future erroneous misreads, provided additional training to staff responsible for meter reads, and will be modifying the existing meters in the future so that water usage data can be recorded and collected electronically.
FISCAL IMPACT/SOURCE OF FUNDING:
The refund of this overpayment will not have an impact on the General Fund. There will also be no net impact to the Water Enterprise Fund for the settlement agreement of $190,416 as no water purchases were made as a result of the misreads. The settlement will be paid from the Water Enterprise Fund balance.
GENERAL PLAN RELEVANCE:
WS 1.2 Reliable Supply and Cost-Effective Distribution