[T]he city of Burlington is expected to pay the University of Vermont nearly $2 million for a series of water and sewer billing issues spanning two decades.
The Water Resources Division of the Department of Public Works discovered it had under- and over-billed UVM with nine water resource meters over the past 20 years. Following negotiations, the city will make a payment of $1,815,226 to UVM, and will also waive approximately $70,493 in invoices.
The City Council and the Board of Finance are expected to approve the terms Monday night. The issue was previously discussed when the council went into executive session on June 3.
Bob Rusten, senior policy and compliance specialist, and Beth Anderson, chief administrative officer, introduced the proposed letter of agreement in a memo to the finance board on Thursday.
After negotiations, the city agreed to resolve all amounts due, including interest, according to the memo. The payment and waived invoices are expected to cover the difference.
The $1.8 million payment will be divided among the wastewater, water and general fund repayment for overpaid street franchise fees. If approved, the city is expected to have sufficient funds to cover expenses for all three budget sections.
If approved, the letter of agreement would also authorize a new deal between Burlington and UVM for contributions. As an educational institution, the college is considered tax-exempt, and makes an annual payment to the city for use of services, such as the sewage system. Known as Fee for Services, the existing agreement had expired.
Under the proposed three-year agreement, UVM will pay $1.3 million to the city before the end of the 2019 fiscal year, followed by a 2% increase over the next two fiscal years, according to the memo. The deal aims to match the city’s average municipal tax rate increase over the past decade, and also includes the option of a three-year extension.
It is unclear when and how the billing error was discovered, or the specific issues with the water meters which prompted the inaccurate billing.
The Department of Public Works did not respond to email and phone messages seeking further explanation Monday afternoon.
UVM spokesperson Enrique Corredera said in a statement: “We have a great working relationship with the city. We understand that things like this can happen. We appreciate the city’s willingness to work with us toward a resolution.
“It sounds like a lot of money, and it is, but it’s important to see it in the larger context. This amount of money accumulated over more than a decade. UVM spends close to a quarter million per month for water, and more than $1 million per month in all utilities.”
He said the billing error “began at the same time we added new facilities, so we had anticipated the bill to increase. The error translates into $15,000 per month, which is about a 7 percent increase on the water bill at the time.”
This story was updated to add written comments from UVM spokesperson Enrique Corredera.
