City seeks last effort to resolve billing impasse with W&G board

The W&G Board's decision to end miscellaneous billing practice, which have been done since at least 1985, could lead to bigger issues for the department; research finds W&G Department owes City $126,000 for overbilling.

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Mayor Charlene Fancher and the Red Bay City Council discuss the miscellaneous billing issue with Water & Gas Board member Mike Shewbart. Shewbart was the only member of that board to attend the meeting, and one of only two who responded to Fancher’s request for a joint meeting. News photo/Jason Collum

RED BAY | While an overriding theme discussed during Thursday’s special called meeting between the Red Bay City Council and the Red Bay Water & Gas Board was “working together,” the attendance of only one board member from Water & Gas – and the lack of response Mayor Charlene Fancher received from other board members – suggested otherwise.

Only Water & Gas Board member Mike Shewbart met with Fancher and the full City Council to discuss an impasse on miscellaneous billing the Water & Gas (W&G) department has been handling for the city since at least the mid 1980s. While W&G Board member Frankie Smith had said he had a prior engagement and couldn’t attend, Fancher said she received nothing from any other board member – no emails, no text messages and no calls.

At issue is the W&G Board ending the practice of miscellaneous billing for the city. This includes dump charges, brush pickup charges and other items handled by the city and which appear on the W&G bills. The W&G Board stated last summer it was too time consuming for department employees to enter those charges on monthly bills and handle calls, so it planned to end the practice.

Fancher told the Council and Shewbart that in August she and City Revenue Clerk Tracie Clark went to Tupelo to visit with CSA, the company that handles the billing software for the W&G Department. Fancher said CSA representatives could help alleviate the matter and any time concerns by creating a system wherein the miscellaneous charges could be entered on a spreadsheet at City Hall and uploaded to the database for W&G, eliminating the need for W&G clerks to handle any data input.

Additionally, Fancher said the City understood there would always be problems and questions on bills, and said they had always advised W&G employees to tell those with complaints to come to or call City Hall with those concerns. She said this information was all presented to the W&G Board in August.

“Months went by with no reply whatsoever,” Fancher said. “Then we received a letter in November from Red Bay Water & Gas attorney Jeff Bowling that the W&G Board had voted to no longer handle the billing services effective January 1, 2020. That’s still where we stand and we invited the board to join us in this meeting.”

Fancher thanked Shewbart for attending the meeting, noting that she did not receive a reply from W&G Board Chairman Ronald Thorn or members Judy Bullen or David Brown.

“I think to try to work it out you’ve got to sit down and talk about it,” Shewbart said.

Shewbart said he had not heard much in the way of a discussion on a solution on the matter from the Board. Shewbart said what had been told to him was that it was time consuming to handle both the billing and complaints, but that he had told them to tell customers to call City Hall, and that a message to that effect could be placed on the bill itself.

“Red Bay’s built on working together,” Shewbart said. “We can do so much more when we work together. I knew Frankie had an obligation today, but I kind of thought, maybe, there would be some more here. I didn’t feel like I’d be the lone ranger. It is what it is. I can’t speak for the Board; I can only speak as one member with one vote.”

Fancher asked whether the city’s proposal for improvements to the process was ever presented to the W&G Board, and Shewbart said it was. He said it was his understanding that it could be done a little differently. Fancher then asked why the Board didn’t want to give the city’s proposal a try.

“We’re not up there to handle the disagreement of charges; we’re just there to handle the billing services,” Shewbart said. “I know it was brought up to ‘let the city bill and we’ll bill.’ Well, that’ll help the postal service. That’ll cost both parties.”

Council member and Mayor Pro-Tem, Brad Bolton, said the city had received a letter the day of this meeting, Jan. 16, that the W&G Board had agreed to stop miscellaneous billing at its December 31 monthly meeting.

“Our two boards have got to work together,” Bolton said. “I pleaded with a couple of members of the board to come. I’m disappointed in that. I think we all consider each other to be friends. I’m just really puzzled. We’re all the City of Red Bay. The only people losing here are your ratepayers and our citizens. Something has to change here.”

Bolton cited figures Fancher had given the Council showing the monthly miscellaneous charges varied, but could run anywhere from $60,000 to $90,000 per year. 

Bolton said he had seen the process that had been in place and agreed that it did create a lot of work between City Hall and the W&G Department. However, he said he didn’t see the harm in the W&G Board at least trying the new system proposed by Mayor Fancher and CSA, especially when it wouldn’t cost either entity anything and would cut down billing information transfers between the entities from weekly to monthly. He said he also understood that the proposed process would help with customers challenging charges in that the W&G Department would simply note in the system that the amount was contested and that would end its work as the matter would automatically go back to the city. Then, if Clark researched the charges and found them to be correct, they would be entered back on the spreadsheet at City Hall and eliminate W&G from having to enter it again.

“Everything would be more automated,” Bolton said. “That’s why I don’t understand why we can’t just try it – if we’re trying to work together.”

“If it doesn’t work, then we could readjust,” Shewbart said.

“That’s all I’m asking for, personally,” Bolton said. “Three months from now if it is a disaster, come back and tell us. At least we tried it.”

“Without piling on, I think Brad’s feelings are right,” Councilman Mike Kennedy added. “Let’s try it. There’s no harm, no foul in that. It just makes sense if you can convince the rest of your board to give it a try. And if it doesn’t work we just step back and go a different route. But I have a high suspicion that with effort on both sides, this would work.”

Working together, or apart

Shewbart and the Council discussed how the City and the W&G Department had worked together in the past, citing instances such as police providing traffic control while W&G employees worked on water lines. Shewbart said this had been brought up during W&G meetings, too. Even as both sides echoed the “teamwork works” mantra, the sudden end to what had been a symbiotic relationship between the two entities could foment ill will – and could jeopardize other agreements the City has with the Water & Gas Board.

What is important to note is the Water & Gas Department and the City of Red Bay are two separate entities, though the W&G Department operates under the city’s umbrella to some degree. Shewbart said a problem arises in collecting on the bills and said W&G could not legally collect for the City, and he had asked for records in the past to see how that was being reconciled since it hadn’t been a problem in the past.

While noting that the City of Red Bay has no interest in harming the W&G Department, Fancher and Bolton both told Shewbart that this could lead to the City having to make considerations of its own. Bolton said he wasn’t sure another proposal or letter from the Council would make any difference if the W&G Board’s “mind is made up.” He said if the Council did reach out to the W&G Board, they would convey that the current offer still stands, but if it’s rejected the city might have to take further steps.

“At this point, unless something changes, here are the other places where Water & Gas is in default with (the City),” Bolton said. “We’ve overpaid them on billing, based on the in lieu of tax agreement that’s been on the books since 2008 or 2010. There are a lot of things that maybe the city’s not going to be able to do anymore. They’re operating under our insurance. For me, personally, you can’t have it both ways. You’re either with us or against us.”

Fancher said she wasn’t confident it had been relayed to all the W&G Board members how much the city provides the W&G Department. “Brad mentioned the health insurance; we spend time on that,” Fancher said.

An end to those working agreements could have serious impacts on the employees of the Water & Gas Department as they currently receive health insurance benefits through the City of Red Bay. If the City were to end that practice, the W&G Board would have to provide insurance benefits on its own. Additionally, it could result in issues such as a curtailment of the Police Department handling weekend emergency calls for the W&G Department.

The in lieu of tax mentioned by Bolton could likely become a major issue of its own – and could quickly become a major liability to the W&G Board. Fancher told Shewbart that during the past few months the city had been researching the matter of billing, it was discovered that the city was supposed to be receiving a $1,200 per month credit toward the monthly billing that the city hasn’t received. That totals $126,000 that the W&G Department has not paid the city.

“It should be noted the City of Red Bay didn’t want to harm the Water & Gas Department because if they did they would have said you have to pay the in lieu of tax money just like Franklin Electric, Alabama Power and the Sewage Disposal Board,” Bolton said of the original in lieu of tax agreement. “Instead they worked out an agreement so no one had to write a check. That doesn’t need to go unnoticed. And even in that meeting in August when we brought that up, I said I didn’t think we were wanting anyone to write a check, but we need to address these issues. But it’s just fallen on deaf ears.”

The in lieu of tax is an agreement where the W&G Board does not have to pay privilege tax or license on utilities. Instead, the city’s agreement was to receive a credit on billing instead of receiving the tax payments from the W&G Board.

“The in lieu of tax billing has got to be addressed regardless because of the billing issue,” Fancher said. “That’s $1,200 a month.”

What happens now?

Fancher and the City Council agreed to submit another proposal to the W&G Board on the miscellaneous billing issue to see what happens, though Shewbart said he didn’t know if it would help. For his part, Shewbart didn’t see why the issue had to be a problem.

Both Fancher and Bolton told Shewbart that if the Council attended a W&G Board meeting it would not be for the point of pointing fingers at anyone, embarrassing anyone or making a spectacle. It would be to simply come up with a workable solution to a service that had been provided for more than three decades.

Bolton recommended the City compile the letter and proposal instead of it coming from Attorney Roger Bedford, and that it ask the W&G Board for a trial run of three to four months to see if the new system addressed the concerns they had.

“I personally don’t think this has to be this difficult,” Fancher said. “In a last effort – and I mean last – I propose we submit another proposal like we did in August on the miscellaneous billing issue.”

The next meeting of the Red Bay Water & Gas Board is Thursday, Jan. 23 at 4 p.m. at the Water & Gas Department.