Since a third-party vendor took over billing for sewer service in January, thousands of Chattanoogans have stopped paying their bills.

As a result, the city is running a nearly $2 million shortfall in its sewer account, Chief Operating Officer Andrew Kean told the City Council on Tuesday. He also said Mayor Andy Berke's staff is working with Tennessee American Water to start shutting off residents' water if they don't make good on their sewer bills.

But council members balked at any changes for residents until the city can address mounting complaints customers have with ENCO Utility Services and how it collects payments.

The problem isn't with the vendor but with the lack of consequences, Kean said. If the city brings back that consequence, residents will start to pay again, he said. Further, Kean said, the city is considering allowing ENCO to handle customer service for residents whose water is turned off.

With so many concerns on the table, one councilman asked why the administration would consider allowing the company to also provide customer service to residents. Constituents have expressed great concern with how ENCO does its business, Council Chairman Yusuf Hakeem said to Kean.

"There's some feeling that we need to go away from them altogether," Hakeem said.

Residents' complaints range from not receiving their bill until after it's due, to a $3 convenience fee if customers pay by phone or online, to not being refunded for overcharges and confusion about who to call with complaints, officials said.

One man in Councilman Russell Gilbert's district complained that when his water pipes burst he was charged a $1,000 sewer fee. While Tennessee American Water waived the resulting water bill, ENCO Utility would not for the sewer fee, which was more than 10 times the amount of a normal payment, Gilbert said.

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ENCO's vice president of customer service, Ruby Irigoyen, declined to comment, saying she hasn't seen any complaints. She didn't reply by press time to a reporter's email listing the city's concerns with the utility service.

Tennessee American Water decided to stop billing customers for sewer services two years ago. The city entered an inter-local agreement with Rossville and the Hamilton County Water and Wastewater Authority last year. Together, they secured a vendor for sewer billing. Last August, the previous City Council approved a four-year, $1 million contract with ENCO Utility of Anaheim, Calif.

In the past when Tennessee American Water billed residents, the company had the option to shut off residents' water if they didn't pay their sewer bill, but Kean said the city decided to wait until the new company was settled before considering that option again.

More than 13,000 accounts now owe money, he said. That's about 25 percent of the city's customers.

Tennessee American Water could begin shutting off water for nonpayment by next year, Kean said. But the city is still studying who customers can call to have their water turned back on, he said. The city is considering a $15 turn-off and another $15 turn-on fee after residents pay toward their sewer bill.

Currently, customers can call the city's 311 service with sewer complaints or payment questions, but City Council members said many residents don't know about that option.

Councilman Ken Smith said he is concerned with how quickly residents will get their water turned back on through a third-party vendor. But he agrees the city has to do something to collect its fees.

Hakeem said he would prefer to see a local company manage the billing service.

City Attorney Wade Hinton told the City Council his staff is studying whether ENCO Utility has breached its contract in light of the complaints. Hinton said he will report the findings to the council.

Contact staff writer Joy Lukachick at jlukachick@timesfreepress.com or 423-757-6659.