City pays $1.59 million water bill late
Staff turnover, lack of training blamed

By Mike Lee
San Diego Union-Tribune June 6, 2007

When San Diego made its case last winter to raise utility rates, Mayor Jerry Sanders talked up new controls designed to reduce management miscues that had hobbled the city's water and wastewater departments for years.

At the same time, San Diego missed the Jan. 30 deadline for paying a $1.59 million bill to the San Diego County Water Authority. The city's water department submitted its payment late because it miscalculated the billing cycle.

It was "an unintentional error that occurred as a result of staff turnover and the lack of internal training," Rod Greek, deputy director of San Diego's Water Department, wrote in an April letter to the water authority.

Greek asked the water authority to waive its late-payment penalty of $15,893.89. The agency's board will take up the issue in July.

Bill Harris, a spokesman for Sanders, said city leaders are confident the mistake won't be repeated. "Obviously, it's something that we wish did not happen. . . . It's going to be addressed in the appropriate way," Harris said.

But the late payment wasn't the first time San Diego has dropped the ball on bills from the water authority, which sells water in the region at wholesale prices. Water authority officials said they also penalized the city for delinquent payments in May 2003 and September of last year.

"San Diego is becoming a deadbeat water user," said Michael Shames of the watchdog group Utility Consumers' Action Network. "The mayor's high-profile effort to turn around the management of the Water Department appears to be pretty leaky. A house can't be in order if it can't pay its bills in a timely fashion."

San Diego's most recent water-bill delinquency happened as the Water Department was promoting a rate-increase proposal that the City Council eventually adopted in February.

Harris said the department's officials thought their payment period lasted until Jan. 31. In reality, the deadline was 30 days from the end of 2006, or Jan. 30.

"We have made all of the chastising internal controls now to let people know that 30 days does not equal one month. It means 30 days," Harris said.

A different reason caused the late payment in September. In that case, Greek said, Water Department officials put their check in the mail on a Wednesday for a Friday due date, but the water authority didn't receive the payment until Monday.

Greek said he didn't know the circumstances of the May 2003 incident.

During the past five years, seven of the water authority's customers have paid a combined $44,745 in fines assessed for late payments.

The total doesn't include San Diego's latest penalty, which was the largest in that time period, said Dennis A. Cushman, assistant general manager of the water authority.

The agency has a protocol for dealing with late payments: Delinquencies of up to five business days are charged 1 percent of the unpaid bill. Longer delays generate penalties of 2 percent each month or part of a month.

"These rules and deadlines . . . are important for the financial business of the agency," Cushman said.