Government : Vinton Municipal Electric Utilities forgives $180,000 due to under billing

At this month's VMEU Board meeting, the utility board voted 4 to 1, with Rich Hainstock voting no to forgive around $180,000 in unpaid electric bills. It was discovered that for several years, at least 8 larger businesses in town were not billed appropriately for electricity. The utility will be doing meter readings on other businesses in town to make sure there isn't an issue with others.

It was explained that the multiplier wasn't entered into the system correctly, causing the issue. Each individual meter has a multiplier it might be 0,10,20 or 100. It appears to only affect industrial meters. Another issue is that the software used isn't user-friendly requiring the multiplier to be entered in two different locations for each account.

In the February meeting, Mike Barron and Gerald Horst were tasked with the job to review the issue.

Barron asked the board what they would like to do concerning the issue. The options were to either try to collect some of that money or to forgive the debt.

Horst shared that he was concerned that these customers might not know that their bills will be going up, and the perception might be that the utility is trying to collect some of the money back because their bills will increase. That, however, is not what the utility is doing, even though they could.

Three of the eight businesses mentioned in the meeting with the issues are the hospital, Kwik Star, and John's Quick Stop. 

Hainstock made the argument that if the 8 accounts had been overbilled by the same amount that they were underbilled, the board would have had to make that right. "Not one of them contacted us and said, 'Hey, my bill really dropped, why?" he said. Several on the board agreed with that.

Hainstock continued. "What we are saying is this. If we make a mistake in your favor, don't say anything, let it run as long as you can.

This is great for us, they aren't going to make us pay for it in the end! Even though," Hainstock continued, "we used the electricity, even though the utility spent the money to get that electricity to you. But if it was the other way around, we would immediately refund the money to them. Immediately. I find it interesting."

He shared that at the February meeting, one of the professionals talked about how a city in Kansas went after a widow and the whole community was up in arms and incensed about it. "I get that," Hainstock said. 

"We're talking about 8 commercial customers. People who are in it to make a profit. NOT that I want to hurt businesses, I'm a businessman myself. But of these 8 people, not 1 of them came to check on it. The only one I'd let off the hook even a little bit would be John's Quick Stop because it was his original bill when he built the new building. He had nothing to compare it to. He didn't know the difference and neither did we.

The other ones, that changed for 5 or 6 months, through the fall of last year, basically from July on, is my understanding, those are the ones that are not being very good partners to the community by stepping forward and saying, 'Hey!' I think the hospital bill was down $5,000. If it would have been up $5,000 I think we would have heard from them. I don't think this is the way that the utility should look at this. 

A proposal that I would like to offer if there was any indication that we'd want to collect this money from these businesses, would be, let's just take 6 months so that it stays in one year, and we'll give them the next 6 months to pay it back.

I haven't heard anyone else talking about this money. I think it's $180,000 that we're talking about?

I don't understand this not wanting to go after it. It's not some poor widow that's on a fixed income. These are commercial customers that should have noticed their utility bills had gone down that much and come looking to see why."

"It's because it's human nature, that's why," said Barron. 

"It's not incumbent on our customers to make sure that we bill accurately. If it was our error, we have to find it quickly. That's the nature of sending out invoices. There was no fault of any of these customers. 

The other part is that we are in a service business on the other side, everyone associates the two together. No one thinks of the utility as separate. We have to earn that business, So anything we do hampers that, that hinders our ability to generate goodwill and more potential customers, I think it's a very bad business move," said Gerald Horst. "So yeah, it's going to cost us $180,000 I'm not happy about that one bit, it's a horrible situation that we're in. But it's by no fault of these customers, and we're going to damage our goodwill well beyond $180,000 on the fiber side, in my opinion. I disagree with your assessment on that one Rich."

Melissa Moser agreed that the fault lays on the utility and not on the customer.

Barron asked for a motion to forgive the debt. it passed 4-1.