City Council members said they are inundated with complaints about new sewer billings from a company in California - especially a $3 service fee.
Councilwoman Carol Berz called the actions of the firm "slimy."
Steve Leach, city public works administrator, said officials are in talks over what to do about the situation, and he said action will be taken.
He said it was the county which hired the California firm.
Councilwoman Sally Robinson, noting that the problem emerged after the Tennessee American Water Company quit handling the billings, said the matter is "a public relations disaster" for the water company.
But Mayor Ron Littlefield said he believes most people are taking their wrath out on the governments involved, instead of the water company.
He said the water company could have averted the problem for everyone by renegotiating its charges for adding the sewer charge to the water bill.
Council members said the billings from California are arriving just a few days before they are due to be paid. Councilwoman Berz said it seems to be coming via either "Pony Express or Slow Walk."
Councilman Peter Murphy said his wife is one of the chief complainants - especially after she opened the sewer bill and saw that it was due in three days or interest and penalties would be charged.
Councilman Jack Benson said, "This is one of the biggest problems we've had in a long time. And it's going to get worse."
Councilwoman Robinson asked if Chattanooga is the only city in the nation that does not own its own water system. Mayor Littlefield said there are a few, including Lexington, Ky., that he said is going through the same problems as Chattanooga.
City resident Mike Mallen said he still has not gotten his sewer bill, so he said, "To try to be pro-active, i called the number for "pay by phone."
He said the main number had a message for "the Chattanooga Sewer Line," but said customer service was not available. He said it gave another number to call "during regular business hours."
Mr. Mallen said he called the number during California's regular business hours and got a message saying it was not a working number.
He said, "So they've created a fictitious number for the pay by phone."