City staff discovered that Cape Coral has been overcharging for sewer use for nearly half a decade on Friday, setting up a complex and otherwise difficult task on figuring out how, where, and how to refund those overages.
Since 2005, 143,366 residential, 3,656 duplex, and 3,812 multi-family accounts that used more than 10,000 gallons of water were overcharged, according to an e-mail to city council from city manager Carl Schwing.
The city plans on refunding those overages, but as of Friday, no one knew how big that figure is, when it will be refunded, or what the best method would be for returning that money.
“We’re just now starting to hit the tip of the iceberg with this. There’s still a lot of information that has to be gathered,” said city spokeswoman Connie Barron. “We’re still trying to come up with a clear picture on the amount we’re talking about. Once we have that, the we can talk about how to get the money back to people.”
According to the email, the city was working with a customer who was unhappy after a broken water line spilled water into a canal.
Since the water did not enter the city’s sewer system, the customer did not want to pay the charges for all that water.
During the review, city legal staff discovered one glaring discrepancy: Before 2005, the city had capped the sewer charge to water usage of no more than 10,000 gallons. But a resolution in 2005 removed that cap, and subjected all water usage to a sewer charge.
The ordinance, though, was never amended so the charge was never legal.
As a result, a lot of people were over charged, and no one quite knows how to refund that money, especially with different rates each year over the last five years, and a shifting population that moved according to the boom and the bust.
That number is expected as early as next week, according to Barron. But what that figure will be is anyone’s guess right now.
“I doubt we’re talking millions and millions, but we are talking seven figures, possibly,” she said.
Revenue projections will also be off, which will probably equate to higher rates for rate payers to make up the projected deficit.
Mayor John Sullivan said he doesn’t have enough numerical information right now to make a determination on how council might move, but he wants to try to keep the rates low, or even lower.
“The city is trying to do the right thing by the residents,” he said. “We want to know what happened, and we want to put something in place to make sure it doesn’t happen again.”
Council member Eric Grill said he was simply floored by the revelation. Like Sullivan, he said there wasn’t enough information yet available, but said the ripple effect could be massive.
“The implications are too much to put into words right now … until we know the true exposure, this is going to affect everything.”