DATE: Friday, February 28, 1997             TAG: 9702280564

SECTION: LOCAL                   PAGE: B1   EDITION: FINAL 

SOURCE: BY JON GLASS, STAFF WRITER

DATELINE: NORFOLK                           LENGTH:   63 lines

NORFOLK PLANS TO COLLECT $342,000 LOST IN BILLING ERROR

Calling it a matter of fairness, city officials said Thursday that they plan to go after about $342,000 in sewer revenue that was not collected because of a billing error.

Department of Utilities officials discovered earlier this month that about 1,300 of the city's largest producers of wastewater, all of them industrial and commercial users, had been underbilled since July 1.

City officials acknowledged making the mistake. But they said Thursday that the undercharged customers should pay for the full amount of wastewater produced during the previous seven months - just like the rest of the city's estimated 63,000 sewer customers.

``The service was provided, withstanding the fact an error was made, and we felt in fairness to all our customers that the appropriate charges should be made,'' Assistant City Manager Sterling B. Cheatham said. ``If we had not made an error, they would have paid this anyway.''

City Councilman Herbert M. Collins Sr., who raised the issue at a City Council meeting last week, said, ``With the astronomical cost of water and sewer to the average customer, I don't think they'd allow us to just write it off. It wouldn't be fair.''

Council members discussed the matter in closed session Tuesday.

Louis L. Guy Jr., Norfolk's director of utilities, said the maximum back charge any customer will face is about $1,827, and only about 40 of the 1,300 will pay that much.

The underbilled customers will be notified by letter within a few days, Guy said.

Officials said Thursday that the city utilities department could not afford to lose the revenue.

While $342,000 is a relatively small percentage of the sewer operations $14.3 million budget this year, it would be missed, officials said. The sewer system is designed to be self-sustaining through user fees.

``The wastewater fund is hard-pressed to support all the replacement and rehabilitation necessary in a city sewage system that is greater than 50 years old, and is falling down around our necks,'' Guy said. ``It is a real bear to come up with enough resources . . . to prevent the sewage system from reaching emergency situations. We really need every penny that is coming in.''

City officials would not release the names of customers that were underbilled.

But officials said the customers include hotels, large apartment buildings, hospitals, a few large industries and government agencies, including the city's Department of Civic Facilities.

All of the customers generated between 10,000 and 100,000 cubic feet of wastewater during a one- or two-month billing period. By comparison, an average residential customer generates about 1,500 cubic feet during two months.

The billing error came to light as city administrators began to prepare next year's budget.

Guy said the mistake was linked to the city's conversion to new sewer rates, a phased process that began nearly three years ago. Utilities employees last summer inadvertently entered the wrong sewer rate into a computer-billing program for customers using more than 10,000 cubic feet of sewage, Guy said.

The underbilled customers should have been charged $1.34 for every 100 cubic feet up to 100,000 cubic feet of use. Then the rate dropped to $1.05.

Instead, they paid $1.34 for only the first 9,900 cubic feet. They were incorrectly charged $1.05 per 100 cubic feet for sewage use over 10,000 cubic feet.

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