Atlanta Unfiltered

May 4, 2009 --

Atlanta’s water department has illegally kept $4 million that should have been refunded to 29,000 customers who closed their accounts, a city audit shows.

Apparently, part of the problem is that no one ever told customer-service reps in the water department about changes last year in the city code. Auditors said employees who handle refunds were unaware of consumer-friendly changes in refund procedures.

In January 2008, the city council required refunds of customer deposits within 60 days of closing an account. Deposits also must be refunded to customers with five years of uninterrupted service.

Instead, Atlanta refunds your deposit if and when you ask for it. Deposits for many older accounts were “reset” to January 2007 when the city switched to new software. That means some refunds would be delayed up to 59 months.

As of February, the auditors found more than 13,000 customers were due refunds of $50 or more.

These procedures “appear to conflict with current city code and may conflict with state law regarding disposition of unclaimed property,” the auditor said.

“Conflict with city code” is another way of saying, “It’s illegal.”

The auditors also found that planned hikes in water rates may be too high and recommended the city council consider giving ratepayers some relief. Rates have climbed by 70 percent since 2004 to pay for rebuilding the city’s crumbling water and sewer system, and rate hikes of another 80 percent are planned over the next four years.

Current rates are second-highest in the country, behind Seattle, for systems of comparable size.

The average Atlanta household pays $107 a month for water and sewer service, an amount that will top $150 by 2012 with planned rate hikes, the auditors said. Based on EPA guidelines for affordability, they said, a monthly bill today should be no higher than $80.

KPMG conducted the audit for the city. The full report is 170 pages, but the eight-page cover letter hits the highlights. The city council plans a May 6 retreat on the full audit.

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