The Moss Point Utilities Department has a $3.4 million deficit because of bills that have gone unpaid for years without any service interruption to the customers with the delinquent bills, city officials said.
The reason the city has so many unpaid water bills is certain employees in the city’s Utilities Department have been allowing some customers to make small cash payments in exchange for keeping their service, Mayor Billy Broomfield said. A lot of those payments, though minimal, never made it into city coffers.
“Family members were coming in and they had a humongous bill to begin with but were being allowed to pay $10 or $20 on the bill, which means that that was never going to be collected and was going to continue to compound itself on a monthly basis to get even worse,” Broomfield said. “In some cases, customers weren’t paying a bill at all. It bothered me and I had to determine what was happening.”
Broomfield inherited the majority of debt — about $2.1 million — and a little more than $1 million of it occurred on his watch.
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Two employees in the Utilities Department — one a supervisor and the other a lower-ranking employee — resigned after city leaders voted to recommend their termination earlier this year. Their identities have not been released, but they are the subject of a criminal investigation into possible wrongdoing.
When the city started taking a closer look at the delinquent bills and determined the multimillion-dollar deficit, wrongdoing was suspected and reported to the District Attorney’s Office and the State Auditor’s Office.
“This administration would not tolerate misuse of taxpayer dollars,” Broomfield said. “We are going to do everything to make sure people are brought to justice, because it isn’t fair for people who work hard and pay their bills regularly to allow those who decided to beat the system to get away with it. That’s not going to happen here.”
The Sun Herald filed a records request to take a look at the customer accounts with outstanding debt, but the city is still in the process of collecting the information.
Hiding the deficit
City Clerk Stephanie Coleman said the former employees in question had been manipulating Utilities Department records in such a way that is was almost impossible to know what was going on.
“They knew how to maneuver codes so we wouldn’t know what was happening,” she said. “Once I started looking at the numbers, things just didn’t make sense to me. The revenue was way too low for me and I started questioning things and it was just a ripple effect.”
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After the investigation began, Broomfield and Coleman said, the city determined the subjects of the investigation had allegedly been accepting the minimal cash payments and then voiding out the receipts they’d give to the customer. As a result, there was no record of the transaction unless the customer kept their copy of the receipt.
In other instances, officials said, certain employees would allow customers with delinquent accounts at one address to open up an account at a new address without settling their outstanding debt.
“We had people in that department who knew how to manipulate the financial system so that people, such as me and the mayor, wouldn’t know what was going on,” Coleman said. “These people knew how to code things in such a way where you couldn’t find the discrepancy. If I don’t look at these accounts every day, I’m not going to see it.”
The city expects to see the prosecution of former employees and possibly others.
“There is not a statute of limitation, so once this investigation is concluded, they (investigators) will go after the people who have violated the trust and broken the law,” Broomfield said. “There is a possibility of retribution and jail time.”
Broomfield suspected wrongdoing when he started noticing a pattern by which some of the same residents repeatedly made it onto a list of customers with outstanding debt for their monthly utility service.
“I had people who owed the city $10,000 water bills when I got here and $5,000 water bills and $2,000 water bills and that was done with the blessing of the last administration,” he said. “You should never allow people to dig that kind of hole because they will never get out of it.
“The people who suffer are the citizens who pay their bills regularly and depend on our services and we can’s provide those services if we can’t pay for them.”
So far, Coleman said, the city has determined 13 percent of the residents had not been paying their water bills and 7 percent more had been stealing the services through illegal direct hookups to the system.
Those figures could rise as the investigation continues.
City survives off revenue
What people don’t realize, Coleman said, is the city “survives primarily off the utility revenue” and when customers don’t pay up, the city is unable to pay to improve services or to do such things as offer incentives for businesses to set up shop there.
In addition, the city has been unable to make equipment upgrades or buy needed new vehicles, because they don’t have the money.
The city has taken action against a couple of residents for unpaid bills or illegal hookups, but only a couple people so far have been cited and fined for such action. Broomfield expects that to change after the internal investigation is completed.
The city has implemented changes to improve the utility services as well, including an upgrade to electronic water meters that show exactly the amount of the service the customer is using.
Debt collector calling
To collect the millions in debt owed the Utilities Department, the city is signing a contract with American Civil Services, a company that collects unpaid debt.
“We don’t have the revenue in house to hire any additional people to go after these people for unpaid debt,” Coleman said. “That’s why we are working with the collection agency. They will go after these unpaid fines. That is what they do.”
In addition, the rules and regulations in the Utilities Department are being upgraded, something that hasn’t been done in 21 years, Broomfield said.
Customers who don’t pay will start feeling the effects of the way things operate in the Utilities Department. If customers don’t pay up, they won’t have the services.
“You’ve got to fix what is broken,” Broomfield said. “Sometimes, I wake up early in the morning thinking of the neglect the city has been subjected to. In the past, people have really taken advantage of the city of Moss Point.
“People don’t understand. When you don’t pay your bills or when you have illegal usage, all that stuff is stealing and you are stealing from yourself because once we start looking at the budget, we find we don’t have the equipment to keep the grounds mowed. We can’t employ certain staff. You steal from the community and you really make the day-to-day hard for us. And it’s all because they didn’t do what they vowed to do when they signed up here.”