Resolution calls for second opinion on controversial billing methodology while leaving future rate decisions to the City Council
MANDEVILLE — The City Council unanimously voted Thursday to authorize Mayor Clay Madden to seek an independent consultant to conduct a comprehensive audit and review of the city’s recently adopted water and sewer billing system, reopening debate over a rate structure that has generated months of public criticism.
Resolution 26-28, sponsored by Councilman-at-Large Jason Zuckerman, requests that the mayor retain a qualified consultant to examine the city’s current billing methodology, evaluate whether it accurately reflects actual water and sewer usage, and recommend revised rates or an alternative rate structure that will keep the utility enterprise fund financially self-sustaining while maintaining eligibility for state funding for future capital projects.
“This is just a resolution to encourage and authorize the mayor to bring in a firm to revisit our sewer and water rate structure,” Zuckerman told the council.
He said the city has already taken action to temporarily cap residential sewer charges — a measure co-sponsored by District II Councilman Kevin Vogeltanz and Councilman-at-Large Scott Discon last month — but questions remain about whether the overall strategy adopted by the council last year was the right one.
“It was clear since its implementation that … the anticipated revenue wasn’t being generated before we made the cap on sewer rates,” Zuckerman said. “This is kind of a chance to revisit all that.”
The resolution follows the council’s adoption of Ordinance 26-20 last month, which temporarily capped residential sewer charges after many residents experienced significantly higher bills under the city’s new billing methodology. While the cap reduced bills for many customers, it also lowered projected utility revenue from the plan originally adopted under Ordinance 24-40.
Under Resolution 26-28, the consultant would be asked to review the methodology, assumptions and data used to develop the current rate structure, determine whether customers are being charged for water that never enters the sewer system — such as lawn irrigation, pool filling and other outdoor uses — and evaluate whether similarly situated customers are being treated fairly and consistently. The consultant also would be asked to recommend alternative billing methods and rate structures, including winter averaging, seasonal averaging, irrigation adjustments, separate irrigation meters, tiered rates and other approaches that may more accurately reflect actual sewer usage while generating sufficient revenue for utility operations and capital needs.
District I Councilwoman Cynthia Strong-Thompson said she specifically wanted the city to retain a different consultant than the one previously used to develop the existing rate structure.
“I think we need to have a second set of eyes on it,” Strong-Thompson said.
Vogeltanz voiced support for the proposal but asked whether the resolution would allow the administration to hire a consultant without additional council approval.
Zuckerman responded that the resolution simply authorizes the mayor to begin the process of identifying a consultant and establishing the scope of work. Any contract requiring council approval would still have to return to the council for authorization.
Vogeltanz then successfully amended the resolution to direct the consultant to also evaluate whether the city should continue administering its own water and sewer billing or instead hire a third-party company to perform those services.
“I would like the auditor to analyze whether or not it’s beneficial, desirable, feasible, financially worth it, for the city to administer its own water and sewer collection versus hiring just a third-party vendor,” Vogeltanz said.
The amendment was approved unanimously before the council unanimously adopted the resolution as amended.
The resolution also states that any long-term review should be based on at least one full year of actual collection data under the city’s new billing system so the consultant can better evaluate whether any proposed rate structure would adequately support the utility enterprise fund.
Although the resolution authorizes the administration to seek an independent consultant, it does not change any water or sewer rates. The document specifically states that any future modifications to the city’s billing practices or utility rates would require separate action by the City Council.
The action marks the latest step in the city’s continuing effort to refine its water and sewer rate structure following widespread criticism of the methodology adopted last year. The issue has remained one of the council’s most closely watched policy debates as officials attempt to balance customer fairness with the financial requirements necessary to operate the city’s water and sewer enterprise fund and qualify for state infrastructure funding.
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