Using 2011 Water Rates On 2010 Bills Questioned By P-S Residents

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Many Pine-Strawberry water users were scratching their noggins in collective bewilderment when they opened their most recent bills.

The confusion exists because bills for water used in November and December 2010, were the new and sometimes higher water rates that were to be effective Jan. 1, 2011.

“How can service that was delivered in November and billed in December have the new rates that start in January applied to them?” asked Sam Schwalm, a spokesman for the watchdog group Water for Pine Strawberry.

Board attorney David Davis defended PSWID’s decision saying, “The effective date was never moved. It has always been Jan. 1, the board voted for the rate change. This district manager and his staff prepared the bills,” said Davis. “The rate change documents failed to exactly specify the precise hour and day that the rate change would be billed.”

Board president Gary Lovetro did not return e-mails seeking comment on the controversy.

Former PSWID board president Bill Haney did question the billing. Haney, who for almost 20 years worked for the City of Mesa as its water and wastewater director, owns a second home in Pine.

“New rates are normally implemented beginning with the first complete billing cycle for each customer after a new rate schedule goes into effect,” he said. “This is the standard and accepted practice used by nearly all utilities where rates are based upon consumption, whether they are water, wastewater, gas or electric.”

Haney harbors other concerns about the practice of charging customers for water used in 2010 at 2011 rates.

“Billing for usage based upon a rate structure that is not yet in effect at the time the actual consumption occurs is not an acceptable practice and depending upon the jurisdiction a utility falls under, may or may not be legal.”

Kearney Town Manager Gary Eide says what PSWID is doing is contrary to his water department’s practice.

“If we had a water increase on Jan. 1, we would charge the new rates only for water used after that date.” he said. “If the rate change was Jan. 1, we bill at the end of the month, so users would get a bill (on Jan. 31) for water used since the first of the month. We wouldn’t do it their (PSWID’s) way.”

All other water utilities contacted said their practice was to bill for water used only after the rate change was to go into effect.

Pine water user Pam Mason is among those questioning charging 2011 rates for water used in 2010.

“There needs to be some balance between the responsibilities of being a PSWID board member and the rights of rate payers. When it says new rate increase effective Jan. 1, 2011 it means just that,” she said. “At the PSWID board meetings, I never heard or read that the water rate increase was to be backdated. Being a board member does not give anyone the special privilege to pursue or dictate their own personal rules or agenda.”

Those most adversely affected by the decision to use bills due after Jan. 1 as the trigger for the new rates are weekenders and summer residents.

The new rate schedule includes a water base charge of $36, plus a water usage charge above 3,000 gallons.

It is possible for a customer to not use a drop of water in November or December, and if the bill were due in January, the charge would be $36 instead of $24.

Many are saying they don’t object to the rate change the board enacted last summer because there have been improvements in water supplies, infrastructure and customer service.

But many users do have strong objections to being charged the new fees before the effective date of Jan. 1.

Davis defends PSWID saying, “If it is common to apply the new (rate) only to water used after Jan. 1, then logically it is uncommon to apply the new rate to bills due in January,” he said. “Uncommon does not mean illegal, incorrect or immoral, it just means uncommon.”

One statement received by a PSWID customer was for service from Nov. 3, 2010 to Dec. 7, 2010 and was rendered by the district’s computer on Dec. 10, 2010. However, the payment was not actually due until January, so the district applied the new rate.

While it is yet to be determined whether or not it is illegal to bill customers 2011 rates for water used in 2010, several water users have asked the Arizona attorney general to research the matter.

When the rate hearing was held in July, it was not specified what date on the bill constituted the “effective date” for the new rates.

Last spring, when the district enacted a previous rate increase, the PSWID Web site said that rate covered the period from Aug. 1 to Dec. 31.

In that case, the rate took place only after the effective date of Aug. 1, in sharp contrast to the more recent policy.

“They clearly are not being consistent with the August rate increase,” said Schwalm.

Technically, district water regulations in section AIV 3.8 read, “bills are due when rendered,” not on the payment deadline on the bill customers receive.

But the district applied the new rate on the payment due date not when the bill was actually rendered.

Some water users are saying the decision to charge 2011 rates for any bill due in January is inconsistent with PSWID’s rules and regulations.

“It’s disappointing that the board is choosing to ignore the very rules and regulations that they approved less than three months ago, which among other things, defines when and how billings will occur,” said Haney.

The former board president strongly contends that acquisition of the water system from former owners Brooke Utilities was in the best interests of consumers, but “despite all the good that occurred, these types of action by the current board leadership has to have customers wondering.”

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