UPDATED: Auditors clash over EPB streetlight costs

UPDATED: Auditors clash over EPB streetlight costs

July 22nd, 2014 by Joy Lukachick Smith and Ellis Smith in Local - Breaking News

Sam Smith works on an old street light on Lindsay street on Monday. Smith was helping to install a newer, LED street light.

Photo by Contributed Photo/Times Free Press.

A new audit of EPB concludes that the utility underbilled the city of Chattanooga for street lighting, but that claim was immediately challenged by Chattanooga's internal auditor.

While EPB has repeatedly claimed that mistakes in how it handled the replacement of obsolete streetlights resulted in underbilling for taxpayers, Chattanooga's internal auditor, Stan Sewell, said the opposite is true.

Both parties agree that when EPB removed obsolete mercury vapor streetlights from the poles, it failed to account for some of them properly, continuing to charge the city for the energy-hogging old lights, even though it had already installed more energy-efficient high-pressure sodium lights.

EPB has said that though it did improperly bill taxpayers for the mercury vapor lights' energy usage, the fact that it failed to bill the city for the new high pressure sodium lights - which are more expensive to buy - essentially canceled out that mistake.

In a release today, EPB said that an audit by Mauldin & Jenkins found that EPB underbilled taxpayers by nearly $686,000, and that it planned to collect $178,314 from the city to cover the discrepancy.

But Sewell challenged the audit findings.

"Overbilling of energy due to the misclassification of mercury vapor lights were not offset by underbilling of facilities charges," Sewell said.

Sewell claimed that EPB has actually billed taxpayers too much, to the tune of $620,000 in 2010, 2011 and 2012.

EPB spokesman John Pless, who had released EPB's earlier statement, did not immediately provide a copy of EPB's own audit, conducted by Mauldin & Jenkins. This is the second analysis by Mauldin & Jenkins of EPB's streetlight program, and the second time the firm's findings were sharply questioned by city officials.

Displeased with the dueling audits that failed to resolve questions about EPB's streetlight costs, Chattanooga Mayor Andy Berke said he would appoint a "working group" to resolve the discrepancies between EPB's audit and the city auditor's report, and put in place a process to ensure billing is accurate and transparent going forward.

"It is critically important to citizens and ratepayers to have confidence in EPB's billings," Berke wrote in a letter to EPB's board. "If the working group finds that the city was in fact overbilled, I will expect EPB to rectify the situation in full, either through cash payment or billing credit."