Dive Brief:
- New Orleans Inspector General Ed Quatrevaux has released a report that says the city failed to collect $7 million in sanitation fees during 2014. This is more than 17% of the total sanitation fees issued by the city's Sewerage and Water Board that year, as reported by Nola.com.
- The board adds sanitation fees to monthly water bills for residential and commercial customers. Previous reports from Quatrevaux's office found uncollected fees totaling $3.1 million in 2010 and $8.5 million in 2011. He now estimates that up to $20 million may have gone unpaid from 2012 to 2014.
- Shortly before Quatrevaux's report came out, the Sewerage and Water Board announced a new system that will allow email billing and help the utility to better track past-due accounts.
Dive Insight:
In addition to a variety of smaller issues, Quatrevaux's report also identified the potential for fraud by having one person in charge of all billing adjustments. For example, if a residential customer was charged a commercial rate they could receive money back. The city paid $1.4 million in adjustments in 2014, but the report questions whether all of those payments were justified.
The Sewerage and Water Board already turns off water for people who don't pay for sewer services, but hasn't taken that approach for waste yet. Technically the utility only bills for waste collection and doesn't control it, though the city did give it authority to terminate water services for anyone with past-due sanitation bills in 2014. The board's deputy director has said he will only turn off water for specific customers at the city's request.
Getting delinquent customers to pay up has been a challenge for companies throughout the country and can cost thousands if not millions of dollars. In 2013, Scranton, PA published names of delinquent residents in the local newspaper and has more recently filed thousands of liens. In Washington, Waste Management has threatened to stop service for chronically overdue accounts.
