HATTIESBURG, MS (WDAM) - The City of Hattiesburg hired Water Company of America to help the city make sure it's accurately billing customers for water use, and while that hopefully means more revenue for the city and lower rates for residential customers, commercial businesses could end up paying a lot more.
"We find a revenue stream that they should be getting, but they're not," said Mike Necaise, Water Company of America Gulf Coast region manager. "For some reason, accounts are not being billed accurately, so we're looking for unbilled revenue."
Carter Carroll, Hattiesburg Ward 3 Councilperson, said, "Water Company of America is going to come in and look to see where we are not charging now on water that's being utilized by, say, a business or a developer. They will help us collect those fees or start charging for those fees."
Necaise said the company's study of Hattiesburg will focus on commercial water users.
"As construction is taking place in these cities, especially a city like Hattiesburg (that's) fast-growing, a lot of times water lines are tapped into without a meter," he said. "There is an opportunity there for unbilled water. Fire lines are supposed to be dedicated for fire service only. Quite often we find that this water is being used for domestic purposes and never getting billed."
Carroll said, "It could be that we are not billing something, and they will find that out. They have the resources to find that out, where we don't have the capabilities of doing that on a day to day basis."
Necaise said the company uses data analytics to determine how much a business should be paying for water use based on the size of the building and number of people using the facility.
"We're able to determine that because we look strictly at the characteristics of a property: how large it is, how many people are being served, how many employees," Necaise said. "We're able to take that data and look at what's actually being billed and find the outliers."
Most often, Necaise said, it's large commercial businesses that use multiple water meters that have usage that's going unbilled.
"Like malls for example, large footprints. Schools- large footprints- typically are served by multiple meters," he said. "Often times, we find that one or two meters are in the system, but the third on goes unbilled for whatever reason. So it's off the city's radar. That person or that entity is getting a water bill. Everything seems to be fine with it, however, a meter's not in the system."
Correct billing means those businesses could end up paying much more to the city every month.
"Thousands of dollars per month. Thousands of dollars per month,"Necaise said. "We did some work in south Louisiana at a high school, found that one school was being under-billed about $3,000 a month because a couple of significant meters were not in the system. And the reason, how we found that is we did analysis. We know how many children are in the school, and we know how much the consumption should be per day per student. It just didn't match up. It didn't make sense, so then we start field work and investigating and found that there were two meters not being billed."
Necaise said Water Company of America has worked or is currently working to recapture millions in unbilled revenue in five other cities across the state.
"City of Gulfport, for example, we found $1.4 million dollars of annual unbilled revenue in the City of Gulfport," Necaise said. "We're in Biloxi. We're at $800,000 in annual unbilled revenue. City of Jackson was around $1.5 million in annual unbilled revenue. So we have a good track record here in Mississippi. There's no guarantees, but we're hopeful that we can find them (Hattiesburg) a revenue."
Carroll said, "More revenue for us and trying to keep our costs down. It will increase our collections, so once we do that, obviously, it will help keep our costs down. So the city will come out ahead because we will now start collecting on fees that we are not getting now. Hopefully, that will reduce or keep us from having to raise rates as high as they may have to go."
Necaise said, "Or it allows the city to fund much needed infrastructure improvements."
Necaise said the company works on a fee-for-service contract.
"We only get paid out of the revenues that we generate," he said. "We get paid 50 percent of what the city collects in revenue as a result of our work for a period of 39 months."
Carroll said city's engineering department will do a preliminary study to find obvious problems, and the company should be in Hattiesburg to start its study in about six months.
Necaise said he expects the company to be in Hattiesburg working on the study for two to three years.