BY PHIL CUSTODIO
Clarkston News Editor
Errors in sewer billing look to cost the City of the Village of Clarkston Sewer Fund about $43,000.
About a third of that, $15,515.26 in industrial waste charges, is the fault of Independence Township, said Dave McKee, Independence Township DPW director.
“The error is entirely on us – there’s nothing the village did wrong,” McKee said at the March 25 City Council meeting. “This was an oversight. We did not do our due diligence.”
However, $27,492 in unbilled sewer assessment charges was from the city. Both errors were discovered during a township internal audit in August 2018, McKee said.
“I apologize for both of these,” he said.
The township was collecting sewer payments from the city equalling 491.5 Residential Equivalent Units (REU) from 2012 through July 2018. However, the number of REUs in the city had grown to 500.99 in January 2015, and to 562.4 by November 2017, coinciding with redevelopment of properties into restaurants. The township billed about $60 per REU from 2013 until 2016, increasing it to $78.87 per REU in October 2016, with a rate of $80.25 by November 2018.
Changes in building use should have triggered reevaluation of water usage, said City Manager Jonathan Smith.
The township’s industrial waste water error stems from a change in industrial waste treatment from the City of Detroit to the Great Lakes Water Authority in January 2016. Independence Township began to pay all industrial waste charges invoiced from the Great Lakes Water Authority, but failed to bill the city for its portion of those charges, McKee said.
“An internal audit of all utility billing was conducted in August 2018 and discovered the error,” he said.
From January 2016 to September 2018, Independence Township failed to invoice Clarkston the $15,515.26 in industrial waste charges. Corrective actions include Independence Township DPW creating separate accounting entries for industrial waste charges for the city, sending invoices directly to the city with all supporting documentation, and DPW staff conducting semi annual audits of all utility billing functions to ensure correct, accurate, and efficient billing practices, he said.
“Industrial” means anything other than residential, including restaurants. The city collected the industrial sewage fees from local businesses but they were not forwarded to the township, Smith said.
“We weren’t paying out as much as we should have, but we did collect the money,” he said.
City Council member Scott Reynolds asked if the city was legally obligated to pay the industrial fees, in light of the township’s error.
“This would not work in the corporate world,” Reynolds said.
Repaying the money is the right thing to do, said Council member Sue Wylie.
“I think the township treats us well – I wouldn’t want to harm that relationship,” Wylie said.
The township’s position is the city is obligated to pay it, McKee said.
City attorney Tom Ryan said he will review both issues, including whether individual businesses should be billed to make up the REU shortfalls.