Violaltion in Frequency of Meter Readings for Utilities

After receiving this month's utility bill dated 12/09/10, I was puzzled by the higher than normal usage, until I noticed the reading dates of the previous month and this month.  My previous meter reading was done on 10/26/10 and the next meter reading was done on 12/07/10.  That covers a period of 43 days.  There was no meter reading performed during the whole month of November. 

The State of Florida has a very detailed set of rules in place which can be read in the following link:  Florida Administrative Weekly & Florida Administrative Code  Chapters 25 - 30 contain detailed rules and regulations which a municipality must follow in their day-to-day operations of their water and waste water utilities department.  In other words, THIS IS THEIR "UTILITY OPERATIONS BIBLE".  For example:

25-30.261 Meter Readings.

(1) The utility shall read its service meters at regular intervals and, insofar as practicable within regularly scheduled work days, on the corresponding day of each meter reading period.

(2) The utility shall read the register of each meter in the same units that the utility uses for billing purposes, except that a water meter may register in gallons or in cubic feet.

(3) The service meters shall be marked to indicate the units measured by that meter.

(4) The meter shall be marked with any constant or multiplier that the utility uses to determine the amount of service used by a customer.Specific Authority 350.127(2), 367.121 FS. Law Implemented 367.111, 367.121 FS. History–Amended 9-12-74, Formerly 25-10.95, 25-10.095, Amended 11-10-86 

The city is clearly in violation of the above quoted Chapter 25-30.261 (1)

By not reading the meter at regular intervals, it will greatly fluctuate the usage per billing cycle. This December, 2010 bill covers a period of 43 days, or 6 weeks. That is equal to 1 1/2 months usage, instead of 4 weeks or 1 month's usage. By extending the meter reading over a longer period of time, it dramatically increases the usage for that month, and will bump many users into the higher "Rate per 1,000 Gallons Block". For example, if a customer has an average usage of 4000 - 5000 gallons per month, it will bump this customer into the Block 2 usage with the extra gallons over 6,000, which is billed at $5.23 per 1,000 gallons, instead of the Block 1 usage rate of $2.62 per 1,000 gallons. If this occurs several times per year, it will dramatically increase the revenue for the city, especially from the water and sewer customers. For the county residents using city water and sewer it is compounded even further with the extra 25% added to their bill.

The city is already over-billing with their practice of rounding off the total gallons used to the next 1,000 gallons figure. When our meter was read on 12/07/10, we saw the meter reader taking the reading on our water meter. We immediately wrote down the reading ourselves, which was 24,560. Our bill showed the meter reading at 25,000, therefore we were over-billed by 440 gallons. Sure, it will balance out next month, but, every month, the city is getting paid in advance for thousands of gallons not yet used.

Below is my actual utility bill with name, address & account number blanked out for privacy purposes.

Polk City, County At Financial Impasse

It was a very short meeting at the Lakeland City Hall between representatives of Polk County and Polk City.  In exactly 10 minutes is was established that there is no room for negotiations on the part of the County, and that Polk City will be facing an long, expensive legal battle against the county.  Here is a link to The Ledger article:  Polk City, County At Financial Impasse  One note regarding the article, it fails to mention the 12% utility increase that was implemented in November, 2009, only 6 months prior to the 50% increase voted on at the June 8, 2010 City Council meeting, with an effective date of July 9, 2010.  But the city couldn't wait that long to get the extra income, therefore started applying the 50% increase to the water and sewer usage beginning on May 26, 2010 on forward, even before the resolution was even signed!!!

The public better brace themselves for more creative ways for the city to increase their revenue to pay for this upcoming legal battle with the county. 

Today's Public Notice Meeting in Lakeland at 3:00 PM

We have confirmed that this meeting WILL BE OPEN TO THE PUBLIC.  Seating may be limited, but it sounded like they were doing their best to accommodate the expected crowd volume.  See the previous post for details and location  Public Notice Meeting December 17th at 3:00 PM

Please try to attend, if at all possible!  This should be a very good meeting.

Water Pumped vs. Water Billed Data Visualized

In the newsletter inserted in the 12/10/10 water bill, Polk City made a weak attempt at damage control concerning the disturbing information revealed by a public records request comparing gallons of water billed to Polk City Utility customers versus actual gallons pumped out of the ground during the same time period by the utility company.  Details can be seen in a previous post Magnitude of Polk City Utility Overbilling Revealed.

The newsletter "In the News" section states, "Water usage from Polk City Wells - It has been reported that Polk City wells are not correctly registering the number of gallons pumped correctly.  Frank Sanderson, Polk City's Interim Utilities Director, has been on top of this issue since before it was reported.  There are several reasons this may be occurring and we are working to resolve the issue.  The following action has already been taken:
* The flowmeters at the wells have been recalibrated
* The original design of the placement of the flowmeters is being evaluated.
Individual meters on customer properties are correct."

"Meter readings - Polk City Utilities found an error in the programming of approximately 20 water meters out of approximately 2000 water meters that caused a higher reading than normal.  The software has been updated and the meters now read correctly."

Using the data from the public records request that covers billing cycle 6/10/09 through 11/10/10, anyone can clearly see that those excuses don't even start to explain the discrepancies.  Please keep in mind that this data and graph reflects the GALLONS billed and pumped, not the price per gallon charged.  The only semi-consistent trend is the total gallons pumped figures.  Referring to the chart below, you can see that the gallons pumped decreased slightly following the first recent rate increase in Resolution 2009-07 with an effective date of October 24th, 2009, then again the gallons pumped dropped slightly again following the most recent rate increase in Resolution 2010 - 01 with an effective date of July 9th, 2010.

On the other hand, the gallons of water billed seems to have absolutely no logical correlation to the gallons pumped out of the ground.  The outrageous spike on the July 10, 2009, billing cycle might have a closer correlation cash flow, or lack of, in the city's bank accounts.  There was a mention in the September 2, 2009 Budget Workshop Minutes about an ongoing computer conversion, which may have played a roll, but how many of these bills were actually corrected?  At least of our neighbors had a 10,000 gallon overage in their reading that billing cycle and had to fight for at least 6 weeks over their bill and suffered a water shut off, before the issue was finally resolved.  This was also the same time the city posted a notice by the window of the utility department that if you come in with an attitude, they can refuse to serve you.  How coincidental!

Logic would stand to reason that during the colder months when the snow-birds come back in town from the North, that there would be a noticeable increase in both the gallons pumped and the gallons billed.  That doesn't seem to effect the data very much.  During the colder months of November, 2009, through February, 2010, gallons billed averages at or below the gallons pumped.  Could this also have a correlation to the city's cash flow?  This is also the same time frame when the Ad Valorem Taxes start flowing in every year easing up on the city's tight financial situation, so if there is some creative billing going on, that would be the time of year when those extra funds from the utilities are not as vital to the over all cash flow.

Another area of the gallons billed that appears to have a closer correlation to the city's cash flow instead of the gallons billed is the time following the February 2010 billing cycle.  This is around the same time when the former City Manager Cory Carrier really took notice to the dire situation of the city's financial state as evident in the February 9, 2010 City Council Meeting Minutes.  Per the minutes, Ms. Carrier stated, "money is not coming in as expected. We are still working on the $100,000 that was taken out of this year’s budget, and we are “barely squeaking by.” City Manager Carrier advised she has laid off two employees and is looking at other city operations to see where we can make cuts." 

In the March 9, 2010, City Council Meeting Minutes, The city received the petition for contraction from Fantasy of Flight for approximately 300 acres.  The next month, the gallons billed increased yet again out of proportion with the gallons pumped, maybe in anticipation of the legal bills.

In the April 6, 2010, City Council Workshop Minutes, the 2008 Financial Audit findings were announced by the Auditor, Mike Brynjulfson.  Per the minutes, Mr. Brynjulfson stated, "Statement of Net Assets in the Water and Sewer Funds – the City met a condition of financial emergency (unreserved balance in the General Fund is a negative $101,392 and the Enterprise Funds (w/s) is a negative $173,888)"  The following month, the gallons billed took another steep increase, yet again out of proportion with the gallons pumped.  Also that month, in the April 20, 2010, City Council Workshop Minutes, under the leadership of the new Mayor, Joe LaCascia, "Mayor LaCascia advised he would be asking for 50% increase in rates in order to get revenue in as quick as possible."  This steep gallons billed increase trend takes a steeper increase each month following until the July 10, 2010 billing cycle, where it hits a slight plateau.  This dramatic increase occurred despite, the gallons pumped begins to slowly drop after the May 10, 2010 billing cycle after the rate increase was applied to the water usage in the water bills, despite the July 9th effective date.

Another major "Ahh-Hah" moment comes into play when you read this additional quote from the April 20, 2010 City Council Workshop Minutes above.  On page 2, bullet point number 10 states, "Mayor LaCascia and Pam Lawson then discussed the revenue/expense projections, which show General Fund will have a deficit in July, Sewer Fund will have a deficit in April, and the Water Fund will not have a deficit. By the report it shows the water fund will carry the other two funds until September (copy is attached)."  This is the same month where the gallons billed peaks, when there is no obvious change in the gallons pumped. 

Starting after the August 10, 2010, billing cycle, a steep decrease in gallons billed occurred with no major drop in gallons pumped at the wells.  August 2010, is when the Polk City Utility customers were fed up and finally starting to get involved due to the awareness our blog had created.  At city meetings around this time, on numerous occasions, Vice Mayor, Trudy Block, makes references to seeing a light at the end of the tunnel, being at the cusp of a financial shift in the city which will result in financial relief for the citizens, etc., etc.  Could this be because they were manually manipulating the billing numbers because the natives were getting a little too restless for their liking?

How are the actual meter reading numbers entered into the billing system????  How much human interaction is coming into this equation?  Are there any checks and balances built into this process to make sure that these numbers are accurate?  Is the same person who is handling the cash flow for the city the same person controlling the revenue coming in from the utility bills?  Who is rounding the meter readings to the next 1,000 gallon increment when the meter readings appear to be by the gallon in some months, when other months the figures are all rounded?  How many customers are unfairly being bumped into a higher rate bracket due to this rounding practice?  Inquiring minds want to know!!!!

 

Florida Elections Commission Complaint

In my mail yesterday, December 16th, 2010, I found a thick envelope with an official looking seal from the Florida Elections Commission.  Upon opening it, I found out that our City Vice Mayor/Acting City Manager Trudy Block is on a witch hunt.

Ms. Block, with the obvious help of our City Clerk, Patricia Jackson, and Temporary City Attorney, Tom Cloud, filed a formal complaint with the Florida Elections Commission naming myself personally in violation of election law.  In the response letter from the FEC, the Executive Director, Ms. Rossanna Catalano, states that Ms. Block's accusations are not based on facts and therefore deemed this complaint as legally insufficient.  Here is a link to the complete 14 page document that I received:  FEC Complaint  Just like I had informed Ms. Jackson when she had contacted me previously, I and the others working together do not meet the legal definition of a Political Action Committee and therefore are not required to do anything the city is claiming we need to.  I know the city would love to have a "hit list" of the people, besides myself, to target, but why should people be in fear of sticking up for their rights to be informed, have an opinion about how the city government spends their hard earned tax dollars, and demand proper representation from their public officials?  The many accusations in this complaint are outright lies and they know it.  Other points brought up, there is no legal standing for them to be prohibited.   Many of the possibilities you say we stated as "facts," we are still waiting on answers to many of those questions to be researched further.  We never made promises we couldn't keep, unlike the Mayor.  Mayor LaCascia has yet to follow up on his promise about working together with us and the County Officials to get those questions I posed to the former County Manager, Michael Herr, answered.   We simply wanted other possible solutions to the city's financial crisis to be explored and researched further as an alternate solution to the plans the city already had in mind.  I understand that it must be frustrating for city officials to have their dirty laundry aired out for everyone to see.  If city officials were more open about what is going on and were more trustworthy, there would be no need for what this blog does.  This blog is a way for the public to keep informed and voice their opinions and it doesn't cost anyone a dime! 

By the timing of Ms. Block's filing with the FEC, my guess is that the loan with BB&T was denied and she was so ticked off, she felt the need to retaliate, regardless of the facts!  How petty!   And for your information, Ms. Block, I did send a confidentiality waiver to Ms. Patsy Rushing via Fax this morning, so I am not violating any Florida Statutes!!  Instead of focusing your energy on trying to keep the public in the dark and causing problems for the individuals trying to keep the public informed, maybe you should focus your frustrations and energy on something more productive like getting the city out of it's financial hole and stop spending the hard earned tax payers money for the attorney you love to hide behind because you are not qualified to run this city properly.

The public has yet to receive any information regarding the status of the BB&T loan application, but in previous meetings in November, Ms. Block stated that this information would be forthcoming at the December Council Meeting, which it was not.  Maybe this is why Ms. Block could not even provide me the courtesy of eye contact when I addressed the council on another issue at the December meeting.  One word of advice, Ms. Block, you should not attempt to play poker.  We assume this loan was denied, and rightfully so.  You were trying to add additional millions to the already astronomical high city debt of this tiny city.  If this is the case, we applaud BB&T for making a viable decision based on the high risk facts and not your rosy glasses perspective on the city's current financial situation.

Obviously, the information we are sending out to the public must not be that far from the truth or you would not see me as a credible threat enough to target me personally.  What are you so worried about?  City Officials always complained about the lack of public participation and interest.  Now that we are more active and taking an active role in our futures, this is how you choose to respond?  Seems a little contradictory.  Maybe there is more to uncover that is not so on the up-and-up that the city does not want to reveal.  Maybe the city is attempting to be proactive and shut us up.  The little newsletters in the utility bills are obviously being used as a strategic attempt to discredit the facts that we have been uncovering.  The topics mentioned mirror our blog to a tee.  I'm honored that you feel our blog is worthy of taking your precious time to read it.

Mr. Mayor, you had questioned at a previous meeting, why didn't so many people put their names on their comments on the blog and preferred to leave them signed as anonymous?  I had brought up the possibility that maybe they feared retaliation, and you blew that possibility off as nonsense.  I was verbally attacked by Council Woman Adorno for even insinuating the possibility of this occurring.  Obviously, those individuals fears are not so far off, are they?!!  The city is looking to get revenge since they have not been able to easily push through their agendas, as hoped.  Is the city running out of options?  An animal can get pretty feisty and nasty when driven into a corner with little options to get out.



Lisa B. Shifflett

New Ledger Article about New City Manager Search

Polk City to Begin Manager Search

Water Rate Increase Effective Date Discrepancy

We received this letter from a very concerned citizen who lives in Polk County but receives utility services from Polk City. 

Subject: For Concerned Citizens - Water rate effective dates

To Concerned Citizens of Polk City,   After the 50% rate increase in the Polk City water & sewer rates, I took a look at Resolution 2010-01 dated June 8, 2010, to see when that rate increase took effect.  After reviewing the wording of that resolution and also Resolution 2009-07 dated October 13, 2009, it is evident  that Polk City charged the higher rates sooner than they should have.   For example, my meter was read on May 26, 2010.  Then the City Council passed Resolution 2010-01 on June 8 to raise the rates 50%.  Resolution 2010-01 had an effective date of July 9.  On July 10 they made out the bills and billed all the water consumed from May 26 – June 24 at the higher rate.  On the next billing period they charged the higher rate for water consumed from June 25 – July 8.  This was all water consumed before the resolution’s effective date of July 9.  Even water that was used for 2 weeks prior to the June 8 meeting date was charged at the higher rate.  I obtained signed copies of both Resolutions 2009-07 and 2010-01 from the city clerk and did some calculations.  I then sent a letter to the utility department asking for a $50 credit to my account.    Trudy Block called me soon afterward and tried to explain to me that their intent at the June 8 meeting was to have the rate increase take effect for the billing date of July 9, but this is not what the resolutions say.  I have brought this up to several friends and neighbors and they all agree that we should not have been billed the higher rate until usage of the water & sewer after the July 9 effective date.  Trudy Block sees it differently.  She told me that I shouldn’t feel singled out; they did it the same for everyone and I replied “that is exactly my point.”  I think Polk City should credit all the water and water/sewer customers for those time periods.  Via phone calls Trudy implied that there would be a legal opinion forthcoming from Tom Cloud.  So far they have used the usual stall and diversion tactics.  One email reply from her stated that “The resolution or ordinance is the legal document for the City”.  Another email reply addressed the State Statute for proper notice, but gave no further comment about a legal opinion regarding the effective dates of the resolutions.  I have given her eight weeks to resolve this and now have decided to turn over the letter I wrote to you.  I realize that this is nothing of the magnitude of your awesome research regarding gallons pumped and billed by Polk City, but if you decide that it can help your cause, feel free to use it.  I have already shared my letter with a neighbor who in turn sent it to the Polk County Manager & County Attorney on October 26.    I have followed your blog from the beginning and commend the Concerned Citizens for the fine job you have been doing.  I have stayed in the background because I do not live in the city, but rather am merely subjected to Polk City’s out of control methods of managing our water & sewer system that was previously run just fine by the County.   We have never become involved in matters such as these before.  Our plan was to retire, move to Florida, and enjoy our retirement.  We take no pleasure in keeping an eye on a city to which we don’t even belong, but this has gone on long enough.  Most people seem to acknowledge the bad things the city council is doing, but there seems to be no way to stop it.  We applaud you for your efforts with the petitions, but it seems like no matter what anyone tries, the city just deflects it.  It doesn’t appear that there is any entity in the State that oversees the cities of Florida.    If you can find a way to use my letter for your cause, feel free to do so, and keep up the good work.   Sincerely, Linda Bittel       ************* Here is a copy of Linda Bittel's letter to Polk City Utilities:  Letter to Polk City  Polk County Resolution 07-137         Polk City Resolution 2009-07 To prove her point, Linda Bittel attached a copy of Resolution 2010-01 which Polk City council passed on the 8th day of June, 2010.  Polk City Resolution 2010-01 which clearly states in Section 3 - Effective Date  "This resolution shall become effective on July 9th, 2010 which is 31 days from the adoption of this resolution as required by Florida Statute."   ADOPTED by the City Council of the City of Polk City, Florida, this 8th day of June, 2010, and signed by Joseph LaCascia, Mayor.      Directly above is the Polk City Announcements enclosure that accompanied the July, 2010 utility bill. It clearly states:  Utility Customers:    Effective on the July invoice due 07/25/10 for your utility service for June, the water and sewer rates have been increased by 50%.  The due date of the bill makes it appear that it is well passed the July 9th effective date for the rate increase.  However, on my bill for that month, dated 07/10/10, the billing period is 06/01/10 to 06/30/10, with the previous reading done on 05/26/10.  The meter reading was done on 6/29/10, well before the July 9th effective date for the 50% rate increase, and this same bill reflects the 50% rate increase.  That is unlawful!    The city is not entitled to apply this 50% increase on the water and sewer usage until the effective date of July 9th, 2010, going forward.  We should all be entitled to a refund for the water and sewer usage during the few days in May, the whole month of June, and the first 8 days of July, 2010.  As the Resolution 2010-01 clearly states in Section 3 - Effective Date:  "This resolution shall become effective on July 9th, 2010 which is 31 days from the adoption of this resolution as required by Florida Statute.  Obviously, the Florida Statute requires a 31 day notice before the effective date of the rate increase.  This was not done by Polk City Utilities.  They applied the increase to usage even before the Resolution was signed on June 8, 2010, therefore negating the 31-Day notice required by Florida Statute.  Even if you don't have you bills, you should request a copy from Polk City Utilities and request the refund you are entitled to.

Public Notice Meeting December 17th at 3:00 PM

Ledger, The
12/09/2010
Miscellaneous Notices

NOTICE OF PUBLIC MEETING



NOTICE IS HEREBY GIVEN that the County Manager of Polk County, Florida, and the City Manager of Polk City, Florida, will hold a conflict assessment meeting pursuant to Chapter 164, Florida Statutes, on Friday, December 17, 2010, at 3:00 p.m., or soon thereafter as may be heard in the Office of the City Attorney of the City of Lakeland, located at 228 S. Massachusetts Ave., Lakeland, Fl.



DATED THIS 2nd day of December 2010.



December 8, 2010;L1749

City Council Meeting Agenda for December 13th, 2010

Here's a link to the agenda for Monday night's meeting at 7:00 PM.  Please try to attend.

December 13th, 2010, City Council Meeting Agenda

Sewage Drives Polk City Family From Home

This article appeared in The Ledger on Saturday, December 4, 2010.  Sewage Drives Polk City Family From Home  and speaks volumes as to the sewer problems and repairs that Polk City is facing.  Will these problems continue to plague our city residents until, possibly, Polk City Officials can eventually obtain grant money to pay for extensive repair and replacement of the old pipes?  There is no money in the present city budget that will pay for these expensive repairs.  Even under the newly signed contract with Woodard and Curran, only $500.00 is allotted for each repair, and the balance is additional expense for the city.  Not a great way to start out the new fiscal year.  Which fund will be depleted to pay for this "unplanned" expense?

 In February, 2011, the third payment in the amount of $174,386.00 is due to the County on the Mt. Olive Spray Field loan, and let's not forget the outstanding debt of $531,199 for impact fees that Polk City collected in 2007 and 2008 but did not forward to the county.  According to The Ledger article dated November 4, 2010, the city has budgeted $150,530 in the 2010-11 budget to make a partial payment of the impact-fee debt, but Polk County is demanding PAYMENT IN FULL.  It doesn't sound like Polk City residents can expect a reduction in utility rates and fees or a lower milleage rate anytime in the near future!

Stacking the Deck for the State and the County Mediation?

Even though it might seem it has been relatively quiet between the city and the county for the time being, things are working in the background.  We have heard through the grapevine that the county has notified the state about the city's financial state of emergency.  If this rumor is true, this state statute 218.503 would apply:
 
(1) Local governmental entities,... shall be subject to review and oversight by the Governor,... as appropriate, when any one of the following conditions occurs:
(a) Failure within the same fiscal year in which due to pay short-term loans or failure to make bond debt service or other long-term debt payments when due, as a result of a lack of funds.
(b) Failure to pay uncontested claims from creditors within 90 days after the claim is presented, as a result of a lack of funds.
(c) Failure to transfer at the appropriate time, due to lack of funds:
1. Taxes withheld on the income of employees; or
2. Employer and employee contributions for:
a. Federal social security; or
b. Any pension, retirement, or benefit plan of an employee.
(d) Failure for one pay period to pay, due to lack of funds:
1. Wages and salaries owed to employees; or
2. Retirement benefits owed to former employees.
(e) An unreserved or total fund balance or retained earnings deficit, or unrestricted or total net assets deficit, as reported on the balance sheet or statement of net assets on the general purpose or fund financial statements, for which sufficient resources of the local governmental entity,... as reported on the balance sheet or statement of net assets on the general purpose or fund financial statements, are not available to cover the deficit. Resources available to cover reported deficits include net assets that are not otherwise restricted by federal, state, or local laws, bond covenants, contractual agreements, or other legal constraints. Fixed or capital assets, the disposal of which would impair the ability of a local governmental entity,... to carry out its functions, are not considered resources available to cover reported deficits.

(3) Upon notification that one or more of the conditions in subsection (1) have occurred or will occur if action is not taken to assist the local governmental entity or ... the Governor or his or her designee shall contact the local governmental entity ... to determine what actions have been taken by the local governmental entity ... to resolve or prevent the condition.

With this in mind, the county appears to have made the right move because these conditions surely exist or will in the very near future.  Once the state of emergency is officially declared by the State, then this section of the statute applies:

If state assistance is needed, the local governmental entity ... is considered to be in a state of financial emergency. The Governor ... has the authority to implement measures as set forth in ss. 218.50-218.504 to assist the local governmental entity... in resolving the financial emergency. Such measures may include, but are not limited to:
(a) Requiring approval of the local governmental entity’s budget by the Governor ....
(b) Authorizing a state loan to a local governmental entity and providing for repayment of same.
(c) Prohibiting a local governmental entity ... from issuing bonds, notes, certificates of indebtedness, or any other form of debt until such time as it is no longer subject to this section.
(d) Making such inspections and reviews of records, information, reports, and assets of the local governmental entity.... The appropriate local officials shall cooperate in such inspections and reviews.
(e) Consulting with officials and auditors of the local governmental entity ... and the appropriate state officials regarding any steps necessary to bring the books of account, accounting systems, financial procedures, and reports into compliance with state requirements.
(f) Providing technical assistance to the local governmental entity ...
(g)1. Establishing a financial emergency board to oversee the activities of the local governmental entity .... If a financial emergency board is established for a local governmental entity, the Governor shall appoint board members and select a chair. ...The financial emergency board shall adopt such rules as are necessary for conducting board business. The board may:
a. Make such reviews of records, reports, and assets of the local governmental entity ... as are needed.
b. Consult with officials and auditors of the local governmental entity ... and the appropriate state officials regarding any steps necessary to bring the books of account, accounting systems, financial procedures, and reports of the local governmental entity ... into compliance with state requirements.
c. Review the operations, management, efficiency, productivity, and financing of functions and operations of the local governmental entity ....
2. The recommendations and reports made by the financial emergency board must be submitted to the Governor for local governmental entities ... for appropriate action.
(h) Requiring and approving a plan, to be prepared by officials of the local governmental entity ... in consultation with the appropriate state officials, prescribing actions that will cause the local governmental entity ... to no longer be subject to this section. The plan must include, but need not be limited to:
1. Provision for payment in full of obligations outlined in subsection (1), designated as priority items, that are currently due or will come due.
2. Establishment of priority budgeting or zero-based budgeting in order to eliminate items that are not affordable.
3. The prohibition of a level of operations which can be sustained only with nonrecurring revenues.

Is this why there was such a push for this $43,000 utility study by GAI?  Ms. Block asked if this study would provide a, "5 year pro forma," during the discussions about going forward with the GAI study.  By definition, pro forma accounting is a statement of the company's financial activities while excluding "unusual and nonrecurring transactions" when stating how much money the company actually made.  This may be one of the requirements the state is asking for as part of the plan they need to present to show how the city plans to get out of the hole.

As far as Outsourcing is concerned, obviously the utilities were not being run as efficiently as they could and are the main area of concern causing the financial heartburn for the city.  If the city calls in these so called "experts" to fix all the problems, the state will again be presented with more "facts" to show that the city has a master plan to handle the debt.  On paper, it might look like it is a much better solution, but in reality with fees for each "incident" over $500 cost, things will more than likely add up much quicker than the city anticipates. 

Sources inform us that just over this weekend, sewers were backing up and flooding homes near the intersection of Golden Gate and Damascus.  Under the new contract with Woodard & Curran, how much would this cost the city each incident?  This sounds like it happens quite often in some parts of town.  Woodard & Curran tried to imply that with all the repairs done to the system already, what type of major problems would the city run into?  What could be left to need repair? Obviously, Woodard & Curran did not do a thorough study of Mt. Olive Utility System if the County estimates there is approximately $3-4 Million dollars in repairs needed. 

According to the grapevine, Woodard & Curran were the preferred choice even before the meeting took place to present their proposals at the Monday, November 29th Special City Council Meeting.  This company has worked with both Mr. Cloud and GAI in the past out of Orlando, so how they heard about Polk City is no mystery.  The City Officials gave Woodard & Curran a much warmer reception than the FGUA team.  Even the TV monitors for slide presentations MAGICALLY started working for the Woodard & Curran presentation, when just minutes before they showed nothing but snow for the FGUA presentation.  Rumor has it that Woodard & Curran were so confident they would get the contract that they even approached Mr. Frank Sanderson (the $1,700 week consultant currently working for FGUA) regarding employment with their company a week BEFORE this meeting.

Mr. Cloud surely has been quite involved in running the city lately, proving how incompetent our current Interim City Manager really is.  How much do you think this tab has added up to by now?  That first $10,000 must be running out soon. 

Ledger Article - Polk City will Outsource Utilities

Polk City will Outsource Utilities

Amended City Council Special Meeting Agenda

The City Council Special Meeting Agenda for tonight's meeting, November 29, 2010, has a last minute addition under B.  NEW BUSINESS.    City Council Special Meeting Ammended Agenda

Please try to attend this very important meeting.  Thank You.

New Ledger Article on Subcontracting Utilities

Polk City May Give Up Managing Utilities

Important Meeting Monday, November 29th at 6:00 PM

If you are wondering what meeting we are talking about, you are not the only one.

If you have not been to the Post Office over the last few days, or have been out of town over the holiday weekend, you more than likely did not hear about it.  No "complimentary notification" was sent out to those individuals who have opted in to receive emails from the City for their meeting agendas.  No notice was posted on the City's Official web page, and we were not even able to find a record of this meeting agenda in the city archives.  The link here is to a picture we took of the posting in the post office so you all can have a copy and know what to expect.  November 29, 2010 Special City Council Meeting Agenda

By the lack of notices sent out, this is more than likely a meeting you DO NOT want to miss.  Why is the city being so sneaky about this meeting?  Technically, they did put out notification, at the post office, but obviously they didn't want too many people to see it. 

The most important item on this agenda is the "New Business" item #2, Outsourcing of Operations for Water and Wastewater.  This is a big deal and can substantially impact all Polk City Utility customers residing both in City limits and in the county.  Have the Council members been given ample time to research this new contract?  Where and when was this request for sealed bids advertised for the past 30 days, as required by Ordinance 2010-09.  Were at least 3 sealed bids received before this contract is going to be considered?  If the city does end up going under, will the County be bound to this new contract the City will be considering?  We need to know!  Will the city residents be the ones stuck paying high rates for the remainder of the contract? Will the public be able to get these questioned answered or will we be forbidden to speak once again!!
PLEASE TRY TO ATTEND THIS VERY IMPORTANT MEETING.

Wishing you a Happy Thanksgiving

We would like to thank all of our readers for your continued support and wish you and your families a Happy Thanksgiving.  Take time to enjoy the simple things and appreciate all of God's blessings.

Sincerely,

Concerned Citizens of Polk City

Unlimited Billing and Questionable Practices for GAI and Tom Cloud

We've done some further research into the relationship between Attorney Tom Cloud, a partner in the Gray/Robinson Law Firm, and Mr. Gerald Hartman, Vice-President of GAI Consultants, Inc., both from Orlando.  They have been working together as a team for many years in handling sewer/water disputes and consultations for towns in Florida.  Like ambulance-chasers, these guys refer business to each other when they see a vulnerable situation where there is a lot of money to be made.  Tom Cloud uses Gerald Hartman as an expert witness in his legal disputes in the courts, and Gerald Hartman recommends Tom Cloud when his contracts require legal advice.  Many of the small municipalities do not have experienced city officials, and rely blindly on the advice of these "highly experienced" professionals with very impressive resumes.

But this experience comes at a price, and in most cases this price is very unpredictable, even if a contract is signed.  As in the case of a joint utility committee that was composed of Indian River County, the Town of Indian River Shores, and the City of Vero Beach hiring GAI to provide a comprehensive evaluation of complete consolidation, partial consolidation, or status quo for the water, wastewater, and reuse systems that exist within the three jurisdictions. The County decided not to participate in the study, and Vero Beach and Indian River Shores entered into separate contracts with GAI Consultants and Attorney Tom Cloud as a legal consultant. 

GAI was retained by the Town of Indian River Shores on July 22, 2010 to negotiate a franchise agreement and purchase and sale agreement for the Town.  On August 17, 2010 The City of Vero Beach entered into a similar agreement with GAI.  Here is a link to the "estimated" costs of these services, both from Tom Cloud and Gerald Hartman for GAI.  Utility Management Consulting Fees.  Page 2 of the link gives the background for the study, and Page 4 shows the agreement entered into with the City of Vero Beach.  Mr. Hartman then approached Tom Cloud, of Gray/Robinson Law Firm to represent GAI Consultants regarding certain services for the City of Vero Beach.  If you scroll down to Pages 9-11 you will see Tom Cloud's letter addressed to Gerald C. Hartman of GAI Consultants, Inc. discussing his fees for this particular case.  He states, "an initial estimate would be a range between $25,000 to $35,000, not including litigation fees and costs."  This contract is very open-ended since his, "firm charges for services on an hourly basis."  He goes on to say that, "I will be primarily responsible for all matters, but we reserve the right to utilize other members of the firm whenever, in our discretion, we deem it appropriate."  "Further, computer research, and other technology may also be utilized if and when appropriate and in your best interest.  You will be billed for the use of the same."  He also states that, "we have a legitimate business concern in being paid in a timely fashion."

On page 1 of the above link, the GAI Proposal to perform Utility Management Consulting Services is in the amount of $49,900.00.  Page 8 of the same link shows the rate schedule for GAI Consultants, Inc. Environmental Group.  GAI entered into an agreement with both the Town of Indian River Shores and the City of Vero Beach separately and simultaneously over the same issues.  Conflict of interest issues were raised prior to entering into these contracts, but GAI insisted that this was not going to be a problem, due to his professionalism.

On November 18, 2010 the VeroBeach32963.com website published the following article:
Double Billing Issues with GAI  This article reported that invoices GAI Consultants sent to the Shores and to Vero had the same 4 consultants working for both parties, including possibly billing them for reviewing work the Shores had done themselves.  Based on the article in the VeroBeach32963.com article, Shores Councilman Gerard Weick made a motion which passed, to hold up payment until the GAI Consultants clear up the charges at the October 28, 2010 Town Council Meeting.

Statements were also made that GAI favored the City of Vero Beach in their evaluations.  In this link, 3-Way Water/Sewer Talks May End in Consolidation, "GAI's Gerald Hartman, an engineering consultant who is recommending Shores residents cast their lots with Vero, glossed over two important factors..the financial strength of the competing bidders and projected long-term rate stability."  "GAI did not even raise the fact that Vero's rates were slated to rise drastically over the next five years until the last City Council rescinded the rate increases.  The decision was made with no financial analysis or modeling of the aging system's capital needs going forward."  An angered County Commissioner, Peter O'Bryan, also noted that GAI provided the Shores proposal to Vero Beach before any member of the Shores Council got a look at it.

"The county claims the Shores' consultant, GAI, sent the county a proposal so riddled with legal quandaries and impossible deadlines that it could not even respond."  "The proposal as written would have required the county to purchase the Town's assets, purchase Vero's assets in the Town and be ready to service the Town by Jan. 31, 2011, not withstanding the fact that Vero Beach still has a franchise to serve the Town until Nov. 2, 2016.  County Commission Chairman Bob Solari, directly connects the problems with the proposal sent to the county to the fact that GAI is working for both Vero Beach and Indian River Shores.  "We certainly do see it as a conflict of interest," Solari said.  "In any event, by any standard that I grew up with in N.Y. and have come to understand in Florida, in no way you can say this is in any way a level playing field."

"We are very anxious to work with the county to discuss the consolidation of the water and sewer systems," said Vero Beach Mayor Jay Kramer, noting that he sees consolidation as a way to "drive the costs down."

"Throughout GAI's presentation to the Town, Hartman reminded council members and the audience of his four decades of experience, his credentials as a certified appraiser and his vast knowledge in the field of utilities." (Sound familiar??)   "That only led critics to suggest Hartman should have known better than to write a flawed proposal to the county." 

With Mr. Hartman always touting his expertise, will anyone question his "facts" and "findings"?  Why did Mr. Hartman write a study blatantly favoring Vero Beach and did not include key factors which would have substantial impact on the study?  Were they paying him more money?  Do we really want a company that operates with questionable ethics working for Polk City?  We think NOT!!  Is Mr. Hartman going to approach Polk County to utilize his expertise for a utility study next?

Magnitude of Polk City Utility Overbilling Revealed

We have sited one specific example of gross over-billing on our blog back on November 15, 2010 in this post:  Proof of Utility Meter Software Problems and Gross Incompetence

Based on statements in the November 8th, 2010 City Council Meeting made by the Temporary Utility Consultant from FGUA, Mr. Sanderson, we had confirmation that there were system-wide issues with the water meters.  We had no idea how widespread the system problems were or to what magnitude until now.

A public records request was made to the city requesting:

1) Total gallons billed per month for Polk City Utilities, including breakdowns of total water, total sewer and total irrigation - For billing cycles May, 2009, through October, 2010.

2) Monthly reports from the meters at the well heads showing number of gallons of water pumped for Polk City Utilities - For May, 2009, through October, 2010.

Here is the PDF file containing the requested information received from the City on November 17th, 2010. Monthly Billing Summary for Polk City Utilities

If total gallons pumped exceeds total gallons billed, this can be explained by instances where the water system might be flushed out, the fire department uses water to put out a fire, or flushing fire hydrants.  When total gallons billed exceeds total gallons pumped out of the ground, the only explanation is over-billing.  Essentially, utility customers are getting billed for water that is supposedly passing through their water meters, but that volume of water never was even pumped out of the ground by city utilities equipment!

This report shows that between the time frame of June 10, 2009, to present, there were only 4 months where the gallons pumped exceeded the gallons billed, the rest of the time the gallons billed far exceeded the gallons pumped.  Over the 18 months we received data on, on average utility customers are getting over-billed over 10 MILLIONS GALLONS per month!!  The most extreme month was back in July of 2009.  That month alone, gallons billed exceeded gallons pumped by over 95 MILLION GALLONS!!  This is quite significant considering in the August 17, 2010, City Council Workshop minutes, Pam Lawson, the City Finance Administrator stated that there are approximately 2,000 water users and approximately 900-1000 sewer users.  Don't forget, the accounts with both water and sewer get double billed for both gallons in and out.

How much UNEARNED revenue this over billing  has generated for Polk City over the years, one can only guess.  Even if we figure it conservatively, just for over-billing for the month of July, 2009, at the lowest increment of the 1-6000 gallons usage rate schedule at the old rates of $1.74 per 1000 gallons, this over billing would have generated an extra $166,000 for the city that month.  Just looking at July, 2010, to present, when the new 62% higher rates are effective, on average the customers were over-billed approximately 16.5 million gallons per month.  Conservatively figured, this over-billed 16.5 Million gallons per month at the 1-6000 gallon usage rate of $2.62 per 1000 gallons comes to an extra $43,000 every month in extra unearned revenue for the city.  You know that not all of these extra gallons are being charged at the lowest usage rate, so this figure could actually be significantly higher.

In a City Workshop on April 20th, 2010, Pam Lawson, the City's Finance Administrator stated that on average 40-45 customers per month get their water shut off for late or non-payment.  Each customer is then charged a disconnect, reconnect, and late charge totaling an additional $105, bringing in an average of $4,725 extra revenue per month.  Since the the 62% rate increase effective July, 2010, the number of shut-offs each month has likely increased.  Over the July 4th weekend, 2009, over 200 customers ended up getting their water shut off because the deadline for late payment, July 5th, landed on a Sunday.  A line of people were standing at city hall to pay their utility bills when the offices re-opened Monday morning.  They were told that if they had only dropped their payment in the drop box instead of paying in person, they could have avoided the $105 in fees.  No exceptions were made.  That month, the city made over $21,000 extra revenue on those 200 plus customers who got their water shut off.  Some customers were so angry they are now on a list of individuals who are banned from entering city hall because of the threats that were made.  Is this any way to run a utility system that supplies a life sustaining service?

The city is having severe difficulty paying it's bills now with the benefit of all this extra revenue, it is basically stealing from its utility customers.  There is no possible way the city would be able to afford to operate if it charged ONLY for ACTUAL services it provides it's utility customers.  If this happened at a gas pump, and there was proof the business owner knew this level of error was occurring on a regular basis, the gas station would be shut down and more than likely the owner/operator would face criminal charges.  The same should happen to Polk City!

Which figures will this new $43,000 utility study be using to show revenue flow?  Actual or Inflated?  Why are the existing utility studies which were done at NO CHARGE TO THE CITY by both Hydro Solutions, in November 2009, and FGUA, in Spring of 2010, not being used?  Obviously, these rather recent studies would reflect a more realistic population growth projection than the study previously done in 2006, which was mentioned at the November 15th, 2010, Workshop as being outdated and inaccurate.  The only major change that might need to be added is this year's 62% rate increase.  Maybe the results of these studies do not show the city in a favorable light enabling City Attorney, Tom Cloud, to use them as supporting documentation to argue for the city to maintain the utility system.  With Mr. Hartman's impressive credentials, from GAI, would anyone even question the accuracy of his new study?  Mr. Tom Cloud sure spoke very highly of previous dealings with Mr. Hartman when he had been an expert witness for him in other cases involving utility issues.

The City did not entertain any other quotes or bids from other companies for this study before agreeing to give this job to GAI.  As REQUIRED by the recently approved, on November 8, 2010, Resolution 2010-09, states:

Section 3 – Sealed Bids
The City Manager shall advertise for and receive sealed bids for purchases or contracts in excess of twenty five thousand dollars ($25,000.00) and present the same to the City Council with a recommendation. If the City Manager recommends the acceptance of a bid other than the bid with the lowest total price, the reason for the recommendation shall be given.

Does our new City Attorney suffer from short term memory issues?  Why did Mr. Cloud encourage the council to approve getting this study done with GAI when there were no other bids even submitted or considered.  There were never any advertisements placed for this job, either.  He was present at both meetings so he would know that this resolution was just approved unanimously the week before.  This vote for the GAI study should be thrown out due to this violation.

City Hall Open Only 2 Days Next Week

Just a friendly reminder that the Utility Office at City Hall will only be open for business next week on Monday from 9:00 AM - 5:30 PM and Tuesday from 9:00 AM - 1:00 PM due to the Thanksgiving Holiday.  Since Thanksgiving falls on November 25th this year, be sure to pay your utility bills by Tuesday, November 23 to avoid the $5.00 late charge. 

There are two payment drop boxes located in the City Hall parking lot where you can deposit your payment in the form of a check or money order only.

Possible Flaws in Polk City's Master Utility Plan

The latest Ledger article states, "Polk City Wants Master Plan To Map Its Struggling Utilities' Future."

In case you were unable to attend the Special City Council Meeting this past Monday, November 15th, 2010, there were proposals discussed to get a set of utility studies done on the existing city utility systems.  At a cost of $43,000, the council approved to hire experts at GAI Consultants of Orlando to do the set of 5 studies.  The 5 studies to be done are:

1. Wastewater Operational Optimization Study
2. Water Operational Optimization Study
3. Water and Wastewater Revenue Sufficiency Study
4. Water and Wastewater Financial Optimization Study
5. Water and Wastewater Rate Study

These studies are done sequentially and somewhat simultaneously to arrive at the complete picture of what GAI would recommend to do to get the most out of the utility system, as well as arrive at appropriate costs and rates.  The results of these studies will provide information to calculate a fair market value of the current system as well as a 5 year pro forma.  By definition, pro forma accounting is a statement of the company's financial activities while excluding "unusual and nonrecurring transactions" when stating how much money the company actually made.  The recommendations GAI will be providing as a result of this study will in essence be a plan the city can follow to get the utility system running the most efficiently and cost effectively as possible, while also giving the city an opinion if the system can realistically be supported by the municipality considering factors such as tax base, debt ratios, and credit worthiness.  GAI has employees who specialize in such areas as grant writing, so after the study is done, if the city qualifies, then GAI can be contracted to assist in this function as well. This study typically takes 90 days to complete and GAI's Vice President Gerald Hartman sounds like he unquestionably has the experience to do the study.  He was recommended by Mr. Tom Cloud, since they have worked together on numerous cases in the past.

At face value, this sounds wonderful.  But Councilman Kimsey had a very valid point when he questioned the timing of getting this study done now, when there is a possibility that the County may be taking back the Mt. Olive Utility System within the next year by voiding the contract signed with the city back in 2008.  If this happens then the "plan" that GAI will be suggesting will be worthless.

From our perspective there are additional issues that have not been brought up before voting on going forward with this study.  Public questions were not permitted at this past Monday's meeting.  The first is regarding the numerous meter reading errors occurring system wide, as stated by Utility Expert Mr. Sanderson from FGUA.  If the misreading is challenged by the customer, are they simply being resolved by issuing a monetary credit to the account?  Are the meter readings for usage in the system being adjusted to reflect numbers closer to the actual usage, instead of the extremely inflated usage numbers that are originally being billed?  If not, how is this study going to even be close to accurate?  This is not taking into consideration how many other misreadings are happening which are not being challenged or corrected.

This reminds me of a common phase used in computer lingo, "Garbage in; Garbage out."  If inaccurate numbers are being used in the calculations of this $43,000 study, the answers resulting from these calculations which will be used to base all of GAI's recommendations on will also be inaccurate.  In the example we sited in this previous blog post Proof of Utility Meter Software Problems and Gross Incompetence a customer was charged for approximately 15 times more than his actual usage.  Mr. Hartman, from GAI, spoke quite a bit about when customers' actual usage exceeds what is typically expected when they put in a meter, which is what the impact fees are based upon.  He stated that if customers excessively use the resources, it will raise the cost for everyone on the system.  How can he accurately get these calculations when the meters are consistently providing inaccurate inflated data?  Does that mean that the software glitches causing these misreadings will ultimately end up with the false appearance of justifying further rate increases, when actual usage is far less, in reality justifying a dramatic rate decrease?  Is the study going to show that in just this ONE example 44,000 gallons of water and sewer usage went unpaid?  How will this effect the balance sheets when all of these monetary corrections have been made without the usage corrections and the total amount of gallons used shows God knows how many millions of gallons unpaid for?  The math will be so messed up there will be no way to even be close to reality.  How can this study move forward knowing that these errors exist?

Understandably, the City Attorney, Mr. Tom Cloud would be greatly assisted by having data that a study like this can provide.  The county is challenging the city's ability to financially support such a utility system as well as questioning the fairness of current utility rates.  This study will shed light on both these issues assisting Mr. Cloud to have "facts" to base his arguments on.  If this entire study is done using inaccurate data to begin with, the tax payers are spending $43,000 for a study that will result in additional inaccurate data on which these arguments will be based.  This study may also be used as a delay tactic in the new phase of discussions with the County to resolve these issues, since this study is expected to take 90 days or more to complete.

In addition, some of our sources have indicated that County Officials have already notified State Agencies of the City's delinquencies on it's payments to the County.  If our sources are correct, it is likely that the guidelines in this state statute 218.503 Determination of financial emergency will be followed.  Is this one of the reasons why City Attorney, Mr. Cloud stressed such a need for a study right now and not waiting a few months, as suggested by Councilman Kimsey?  Instead of the city officials using the "shoot from the hip" strategies for decisions, are actual facts and plans to justify these decisions now being requested by the Governor's Office?

Another point that was brought up during this meeting is that no other similar study has ever been done on Polk City's utility system in the last 15-20 years.  Council Person Adorno challenged this statement by saying that a utility system study had been done at a cost of several million dollars during the previous administration in the planning stages of the large sewer and water treatment plant that was scraped.  Ms. Block later then acknowledged that a previous study had been done, but stated it was not a priority to find it in the files.