Auditors Say EPB Overbilled City By $17,000; Street Light Billing Now On Track, Officials Say

Monday, August 25, 2014 - by Gail Perry

EPB auditors have given adjusted figures on whether EPB over-billed or under-billed the city of Chattanooga on the street lighting program.

EPB officials said, "The net impact of the 89-month audit shows the city was over-billed by $17,000."

Stan Sewell, city internal auditor, said, "During a meeting with Mauldin & Jenkins last week, we reviewed a (draft) revision Mauldin & Jenkins developed to the adjustments they initially reported in their July 21, 2014 dated report.  These adjustments resulted in a change from almost $700,000 due from the city to EPB to approximately $17,000 due from EPB to the city."

The issue next goes to a city audit committee.

Going forward EPB has an improved billing process in place for city street lighting, President and CEO Harold DePriest said Monday.

An update on the independent audit relating to the cost of streetlights in Chattanooga was given at a meeting of the EPB board of directors.

The audit was done at the request of Chattanooga Mayor Andy Berke in response to a media report that EPB overbilled the city over $5 million. The independent audit conducted by Mauldin and Jenkins covered 89 months that ended in May 2014, the entire time that records are retained by EPB.

Focus was on energy usage, facilities charges and for the “secondary line loss” which is the energy that is lost as it transmitted along the power lines.

Misclassification of the type of lights was discovered 12-18 months ago, with a number of them misidentified as mercury vapor which is an older and less energy efficient light source than high pressure sodium lights that are more commonly in use.

Street lights should be billed on 4,377 hours per light of burn time which is calculated on the average sunlight during the year. The audit discovered that EPB had only been billing the city for 4,200 hours yearly and resulted in under-billing in that category.

The Environmental Protection Agency supplies information about the loss of energy as it is distributed along the lines. That loss has been calculated at five percent which must also be billed. It was discovered that EPB had not been adding this loss when billing for the street lights, another issue of under-billing Chattanooga.

 Facilities charges include overhead as well as the physical cost of the structures.  Operations and maintenance such as dealing with power outages and replacing lights that have burned out and poles that are damaged also fall into this category which had been slightly under billed.

 The audit of 26,000 street lights for the past seven years showed that the over- and under-billing resulted in almost “a wash.” The processes are being corrected, said EPB's John Pless.  The city’s audit was prepared with different assumptions and it covered a shorter amount of time than the audit prepared by Mauldin and Jenkins. These factors caused differences between the independent audit and the one done by Chattanooga.

Mr. DePriest said he wanted to make sure that Daisy Madison, finance officer of Chattanooga, was comfortable with the corrective action plan. Mike Kaiser, assistant vice president of finance, indicated that Ms. Madison is being kept informed on the corrective action plan in progress.

The monthly financial report given by Greg Eaves, finance director and CFO, showed that electric revenue for July 2014 came in below forecast due to less electric sales. This was because of mild temperatures during the month. During the same time period, the fiber optics business revenue came in above what was  budgeted.

 In the five years since the smart grid and fiber optics system was installed, 60,000 residential and 5,100 business customers have signed up for fiber optic services. This is of benefit to all customers, said Mr. Pless. Revenue from fiber optics helps keep the electric rates lower since that side of the business pays the electric side for use of the fiber lines.

Revenue from those leases has been used to pay down the debt on the telecom business that was in place before the fiber optics network was installed. EPB Telecom debt is expected to be totally paid off by next spring.

 



All School Board Members But Rhonda Thurman Approve Going Ahead With Equity Study

All County School Board members except Rhonda Thurman said Thursday afternoon they are in favor of pushing ahead with an equity study sought by new Supt. Bryan Johnson. Ms. Thurman said she was "tired of bullying tactics by outside groups" such as UnifiEd and Chattanooga 2.0. She said the 132 people who signed a letter in support of the study include people "with deep pockets" ... (click for more)

Upcoming City Council Agenda For Tuesday

Here is the upcoming City Council agenda for Tuesday: I. Call to Order. II. Pledge of Allegiance/Invocation (Vice-Chairman Oglesby). III. Minute Approval. IV. Special Presentation. V. Ordinances – Final Reading: (None) VI. Ordinances – First Reading: ECONOMIC AND COMMUNITY DEVELOPMENT a. An ordinance amending Chattanooga City Code, Part II, ... (click for more)

The Boss, Claude Ramsey

I try not to overuse the word great, but we lost a great man today, Claude Ramsey. I had the pleasure of serving under him as director of Commercial and Industrial Properties for 14 years while he was the Hamilton County Assessor of Property. He was probably the smartest person I have ever known. He was tough but patient, kind, caring and compassionate. He knew how to get ... (click for more)

Roy Exum: Not A Blessed One

When I read, to no great surprise, that 132 of Chattanooga’s “leaders” had signed a letter in support of “socioeconomic integration” in Thursday’s Times Free Press, there were two things that were immediately obvious to me: Not a blessed one would have (a) written such a letter on their personal stationery, and (b) not a blessed one would have ever voted for the current president ... (click for more)

Katie Burrows Sets UTC Women's Basketball Staff

Chattanooga head coach Katie Burrows is putting the finishing touches on her new staff. The faces will remain the same, but the responsibilities will shift.   Assistant coaches Brittany Johnson and Jon Goldberg will remain on the staff and Debbie Black moved from Director of Operations to assistant coach. Former student-athlete Aryanna Gilbert will be the Mocs' student ... (click for more)

CASL: Thursday's High-Point Scorers

CUMBERLAND HIGH-POINT SCORERS: None reported. RIDGESIDE HIGH-POINT SCORERS: 19 – Arianna Bond, Izzy Bauer, Drew Bond, Madeline Bond 17 – Beccan Fitzsimmons, Taj Goodman, Adelaide Bond, Jack Fitzsimmons 16 – Brynne Burkhart 15 – Alex Lowry 14 – Ryan Carpenter, Kathy Zeglen, Owen Eastman 13 – Asa Hedrick 12 – Erynn Whaley, Monica Suttles 11 – Wally ... (click for more)