As many as 1,000 customers billed by Central Arkansas Water since December were levied erroneous late fees even though they had credit balances on their accounts.
A glitch in the water utility’s recently upgraded billing system software caused the error to occur from mid-December through the end of February, but bills sent out in March that cover February’s usage could still reflect incorrect charges.
The contracted software company, Systems & Software, on March 1 straightened out what was causing the late fees to be charged to certain customers, but Central Arkansas Water still has not identified everyone affected or reimbursed all of the accounts.
Anyone who overpaid previous bills - resulting in a credit balance larger than the amount of one month’s bill - and who as a result did not send in a payment for any month during the 10-week span, likely was charged a late fee in error, the utility’s Chief Executive Officer Graham Rich said.
Officials think about 1,000 customers may have been in that situation since mid-December, but noted that that is “an extremely rough estimate” based on what they know right now. A group billed March 6 with a due date of Tuesday is the last cycle that may have been affected by the glitch.
“If it’s even one bill that’s incorrect, that is too many,” Rich said. “We have a very strong history of accurate billing, and so I’m not going to try to minimize the number. I think the important thing is that we recognize the problem, work quickly to get it resolved and everybody will be refunded their money that was incorrectly charged.”
Officials first found out about the error Jan. 28, according to emails between the utility’s employees obtained by the newspaper through an Arkansas Freedom of Information Act request.
On that day and again Feb. 12, a notice sent to customer-service representatives told them to correct the late fee error if it appeared on someone’s account or if a customer called in.
It wasn’t until March 6 that anyone sought to find out the reach of the incorrect charges or ask about correcting all of them, according to the emails.
Customer-service manager David Sharp asked the agency’s information-technology team on that day whether Systems & Software could mass-correct the affected accounts.
The reply from the water utility’s network administrator, Pat Akin, indicated that by the time the software company could correct the bills, it wouldn’t be worth the effort.
“[W]ith as many open issues as we still have ongoing with S&S - it would seem to me that by the time S&S gets around to this issue all thecustomers will have called in and demanded a credit anyway,” Akin wrote.
Sharp followed up on the situation in another email on Thursday by again pushing Akin and the director of information services, Allen Vincent, to get the software company to produce a list of which customers were wrongly charged.
In Akin’s emailed reply to Sharp’s query, she wrote: “Most of the customers who were levied late fees in error have already called in to have an adjustment made. There may be a few more call, but the bulk have either gone ahead and paid it or already called in for an adjustment.”
In an interview Friday, Rich said the utility doesn’t actually know how many customers called in to get the error fixed or how many affected by this issue have been re-credited.
Before Thursday’s email exchange, Sharp had already noted in a previous email to John Tynan, the utility’s public-affairs director, that the situation was “a potential PR nightmare,” and reiterated that concern in a separate reply to Akin on Thursday.
“I just want to make sure everyone who was impacted is identified and fixed,” Sharp wrote to Akin. “It could cause a PR problem if anyone ever got wind of us assessing late charges in error and not correcting them when we discovered the problem. I would rather be proactive on this vs. reactive based on customer calls.”
According to the emails, no one sought to get the list of customers Sharp had first requested March 6 until after a reporter sent questions about the late fees to Tynan on Thursday.
Tynan forwarded the reporter’s questions to Vincent, Akin and Sharp, and asked about the list.
Vincent responded, “We [will] contact S & S Friday and see if they can identify them.”
When asked by phone Friday whether officials didn’t take action to get the full list until a reporter inquired, Tynan said the utility had been working to identify solutions for weeks and decided Thursday to proceed by getting the list from Systems & Software.
The solution options being considered, he said, were to manually go through the hundreds of thousands of bills dating back to December, push the software company for the data or just let customers call in.
“Obviously we are not going to go forward with the customer call way of addressing it,” he said.
Since the utility doesn’t yet know whose accounts were charged the fee in error, they are unsure of how much money has been erroneously collected. Central Arkansas Water holds billing contracts with other agencies, so in addition to water fees on a customer’s bill, the bill may include a sewer or trash fee as well.
Late fees differ depending on the agency levying the fee. Central Arkansas Water charges 10 percent of the water portion of the bill when a customer is past the due date.
Even though the utility provides water to about 400,000 individuals, it only bills about 120,000 each month because some cities buy water wholesale and handle their own billing.
Emails provided Friday that mention reimbursement to customers showed that the late fees charged in error to those customers were between $1.33 and $6.20.
It’s not uncommon for a company to work through kinks in a software system during the months after it is installed or upgraded, Rich said. He noted there were hundreds of issues during the enQuesta upgrade, ranging from speed to pre-customized features not transferring over to the updated system. The glitch with credit balances and late fees was the only one to affect customers’ bills, he said.
The error occurred because the extra balance on an account was being credited only to the water portion of a bill, causing the software to determine an account was overdue on the sewer and other portions when the customer didn’t send in a payment.
“If you step back and look at the overall context of this situation, you’ll see this is truly a new operating system for us,” Rich said. “We are not yet six months into the go-live date. We resolved a lot of issues and still have a number to resolve. This was one that quite frankly dealt with people’s money and we take it seriously.”
Rich said he couldn’t give an accurate time frame for when all the accounts will be re-credited, saying it is a matter that relies on a third-party vendor to correct. But, he added, there is an incentive for Systems & Software tomove quickly.
“We are withholding about a third of the payment for the upgrade of the system and any additional cost this utility incurs [because of the glitch] will be retained out of that,” Rich said. “I can’t speak for them, but we are going to push to get them to resolve it in the next 30 days.”
Front Section, Pages 4 on 03/22/2014