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Home My WebLink About2006-02-21; City Council; 18450; Sewer Charges Refund Brindisi HOAAB# 18.450 MTQ. 02/21/06 DEPT. FIN CITY OF CARLSBAD - AGENDA BILL TITLE: REFUND TO BRINDISI HOMEOWNERS ASSOCIATION FOR SEWER CHARGES ^ DEPT. HD. "X <2CITY ATTY.^jE CITYMGR *J 1 ~>Y^-^ nsg^ ^> aUlScc Q. CL O O O OO RECOMMENDED ACTION: Adopt Resolution No.2006-039authorizing a refund of sewer charges to Brindisi Homeowners Association of $12,709.13. ITEM EXPLANATION: Brindisi Homeowners Association has filed a claim with the City of Carlsbad in the amount of $12,709.13 for overpayment of incorrect sewer charges. In November 2005, Brindisi Homeowners Association brought to staff's attention that three of their water meters might have been misclassified since installation. Staff tested these meters, and found that they were misclassified: • Meter 48131778 was classified as commercial and was found to be irrigation. • Meter 48026744 was classified as irrigation and was found to be commercial. • Meter 57850850 was classified as commercial and was found to be multi-family residential. The classification errors were corrected for the November 2005 billing cycle and thereafter. Carlsbad's Municipal Code 13.12.090 on sewer service charge adjustment states "If it is determined that the charge is discriminatory, unreasonable or unfair, the director shall adjust the charge so that it is fair, reasonable and nondiscriminatory. If the charge has already been paid, the excess paid during the year immediately preceding the date of application for adjustment shall be refunded." Using this authority, Brindisi Homeowners Association was issued a credit of $3,479.46 in December of 2005, for incorrect sewer charges from November 2004 to October 2005. On January 29, 2006 Brindisi Homeowners Association sent a letter (attached) to Council requesting a refund in the amount of $12,709.13, for the 4 1/3 years preceding November 2004. Staff has verified that this amount is correct. As usage on these meters has remained constant since installation, and the reason for the error cannot be determined, staff is recommending that Council approve the refund, pending Brindisi Homeowners Association execution of General Release of Claim (attached). FISCAL IMPACT: The refund amount is $12,709.13, which will have no material impact on the sewer fund. PAGE 2 EXHIBITS: 1. Resolution No. 2006-039 authorizing a refund of sewer charges to Brindisi Homeowners Association. 2. Letter to Council dated January 29, 2006. DEPARTMENT CONTACT: Colette Wengenroth, (760)602-2430; email: cweng@ci.carlsbad.ca.us. Exhibit 1 1 RESOLUTION NO. 2006-039 2 A RESOLUTION OF THE CITY COUNCIL OF THE 3 CITY OF CARLSBAD, CALIFORNIA, REFUNDING SEWER CHARGES TO BRINDISI 4 HOMEOWNERS ASSOCIATION. 5 6 WHEREAS, In 2001 water meters were installed at the Brindisi condominium project to 7 serve both irrigation and domestic water to residents; and 8 WHEREAS, Brindisi Homeowners Association notified the City of Carlsbad in November 9 of 2005 that the meters were incorrectly classified and that the sewer costs associated with the 1 o misclassified accounts exceeded the appropriate charges; and WHEREAS, Staff has confirmed that the meters were incorrectly classified for a period of 12 4 and 1/2 years; and 13 WHEREAS, Section 13.12.090 of the Carlsbad Municipal Code allows City staff to refund 14 up to one year's sewer charges when an error or miscalculation has been discovered; and 15 WHEREAS, staff has refunded $3,479.46 representing one year of excess charges related to the Brindisi accounts; and 17 WHEREAS, Brindisi Homeowners Association has filed a claim with the City requesting 18 refund of overpayment of their sewer charges to the City of Carlsbad for the period beyond the 19 one year of excess charges refunded by staff; and 20 WHEREAS, the Finance Department confirmed the overpayment by Brindisi 21 Homeowners Association and verified the refund amount; and 22 NOW, THEREFORE, BE IT RESOLVED, 23 SECTION 1. That the above recitals are all true and correct. 24 SECTION 2. That a refund of sewer charges of $12,709.13 to Brindisi Homeowners 25 Association is authorized, subject to the receipt by the City of a signed release in a form 26 acceptable to the City Attorney. 27 /// 28 /// 1 2 3 4 5 6 7 8 9 12 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PASSED, APPROVED AND ADOPTED at a regular meeting of the Carlsbad City Council held on the 21st day of February , 2006 by the following vote, to wit: AYES: Council Members Hall, Kulchin, Packard, Sigafoose NOES: None ABSENT: Mayor Lewis MATT HALL, Mayor Pro-Tern CEST: c^ivj LORRAINE M. WOOD, City Cle/rk (SEAL) EXHIBIT 2 REFERRED TO CITY MANAGERfORj RESPONSE Date: _ City Council Members City of Carlsbad 1200 Carlsbad Village Drive Carlsbad, CA 92008 ~ ~ .... .Dear Council Members: The Brindisi at Aviara Board of Directors is currently investigating a situation involving the misclassifkation of three of the nine water meters in our condominium complex. As board members and homeowners, we had no indication that this issue existed until Director Richard Lilley discovered the errors while researching water usage for possible cost savings. Meter classifications are not listed on utility bills, and a homeowner or homeowners association would be unaware thatmeter's have different classifications. It was only after close scrutiny of the billing and detailed discussions with the Carlsbad Municipal Water District that we became aware of this. Meter 48131778 (work order 994607) was classified as "commercial"; however, it was tested and found to service the irrigation system only. Meter 48026744 (work order 994608) was classified as "irrigation", but tests show that it services the recreation building only. The two meters mentioned above are in adjacent laterals 38 and 37, respectively. The "as built" drawing shows lateral 38 servicing Building 9 as well, however, a separate meter was installed to service that building. The third classification error occurred with meter 57850850, which was classified "commercial". This meter was found to service Building 17 and should have had a "multi-family residential" classification. The work orders and permits are available upon request from the Carlsbad Municipal Water District. Please note that meters classified as "irrigation" have no associated sewer charges. We have been working with the water department to resolve this, and the classification errors were corrected for the November 2005 billing cycle and thereafter. The City of Carlsbad has agreed to issue a credit ($3,479.46) to BrindisUbr overpayments incurred from November 2004 to October 2005 due to these classification errors. The period covered by this credit was set by the city's municipal code, which has a one-year statute of limitations for "adjustment of charges". The incorrect billing for the 4 1/3 years preceding November 2004 has been calculated as follows: Water Meter 48131778 (overpayment) $ 13,872.49 Water Meter 48026744 (underpayment) $ 732.64 Water Meter 57850850 (underpayment) $ 430.72 Net Overpayment $12.709.13 EXHIBIT 2 These calculations are based on usage data and sewer rate charges provided by the City of Carlsbad from meter turn-up thtough October 2004. You must agree that this is a considerable amount of money for a small homeowners association to absorb, especially a young one like ours that has struggled to stay within budgetary constraints. The Brindisi Board of Directors does not believe that the statute of limitations for "adjustment of charges" should be applied in this circumstance. There was no way for us to know that the problem existed, nor were we responsible for the mistakes made during the installation of the meters. We hope that the City Council, which serves as the board for the Carlsbad Municipal Water District, will do what is right and reasonable by approving a full refund of the monies that were inappropriately collected for services that we did not receive. Contacts ' Goetz. Ms. Goetz may be reach on 858 826-3643 or at MARY.GOETZ@saic.com. Sincerely, Rene Maurer Secretary - Brindisi Board of Directors 6347 Alexandri Circle Carlsbad, CA 92011 (760) 510-6223 ReneJv!aurer@MacDennid.com TOTftL P.03 if