Waveland Mayor Mike Smith on Monday discussed how a lawsuit has affected the city's utility fund.

Smith said that there is "not a current deficit" in the utility account. He added that the city is looking at options so that the fund doesn't go into the red.

"We haven't chosen the scenario yet that's going to best suit the residents," Smith said. "What we'll probably do is increase the amount that we use for master meters so that it doesn't affect the residents. Because we just went down in '16 and don't want to go back up in 2020."

Former Mayor John Longo, elected in 1974, created the Waveland Housing Authority, which was owned by the city when it was created, Smith said. There was an agreement between the city and the WHA that the city would only bill off of the master meter, one meter for the whole complex and that any changes in the ordinance going forward would not affect WHA.

In 2015, the utilities bill reflected charges for water, sewage, wastewater, and garbage.

"The reason that you'll see wastewater is because the city at that time was facing a $330,000-a-year, unaccounted-for wastewater fees," Smith said. "Which, once we dug into it, that was from seepage on the different major sewer projects that we just completed: Herlihy Street, Meadow Lane, Arnold, Gladstone."

The reason for those sewer projects was to "plug those holes where the seepage was going."

In late 2014, Smith said the utility bill was "at least $87.41 because of that $21.91 charge for the wastewater."

"So we said, there are 320 residents who either live alone, who are elderly and they're on a fixed income so we're going to do an ordinance that would basically you pay for what you use," Smith said. "We set a base rate and the base rate was computed to include what it cost to pump, treat, and purify water, treat our sewage and also the garbage collection was added into it, too."

At the time it was set, Smith said, the base rate was $54.34.

Now with the EPI adjustments and the $10 garbage collection fee, the base rate is about $54.98, Smith said.

"Every 1,000 gallons used beyond that, or any portion of 1,000 gallons is billed at $5," Smith said. "And that is $2.50 per 1,000 of water and $2.75 per 1,000 for sewage."

Smith said that now if a resident uses 2,000 gallons of water a month, the bill is $65.

"Whereas before it would have been $87.34 and you would have been charged for 2,000 gallons you did not use," Smith said.

The Board of Mayor and Aldermen adopted Ordinance No. 371, Utilities Ordinance on Nov. 16, 2016.

On Sept. 7, 2017, the board adopted Ordinance No. 371, amending the residential and commercial for garbage services (solid waste) to $9.68.

On June 30, 2016, Gulf Shore Properties, LLC; Oak Park Mississippi Properties, LLC, and Waveland Properties, LLC, owned by Michael Brown, filed a Petition for Declaratory Judgement against the city of Waveland in Hancock County Circuit Court.

According to the petition, the plaintiffs own two apartment complexes in Waveland, Gulf Grove Apartments and the Oak Park Apartments, which the plaintiffs acquired in 2011 and became customers of the city's water service around Feb. 28, 2011.

In the petition, plaintiffs alleged that the statements received from the city's water department appeared to be "excessive and incorrectly computed. Plaintiffs have made full payments to the city based upon the then-current occupancy. The city's billings did not reflect those correct figures."

The plaintiff also said in the petition that "late fees and charges incurred by the previous owner appear to have been included in the current owners' water bills; additional late fees appear to have been imposed although not due; an unexplained charge for 'WWD' is included in each month bill; the charges appear to be excessive and disproportionate to the services rendered; the charges do not reflect accurately the consumption of water in our complexes as they are figured on a number for single family residences, or complexes with larger apartments, more residents, and higher usage of water; and the charges are otherwise excessive and/or not authorized by applicable laws and regulations."

The plaintiffs asked the court to render a "declaratory judgment stating what charges the city may legally require plaintiffs to pay, how each charge is to be computed, whether each monthly statement to plaintiffs from February 2011 to the present is correct or incorrect, and compute the dollar amount of any error. Plaintiffs desire to pay a bill which accurately reflects actual water usage."

The plaintiffs did not see any award of damages or any monetary amount from the city, the petition states.

The city responded that the "Brown parties" had "breached the water and sewer agreement with Waveland and that the Brown parties owed Waveland for unpaid and overdue billings for water and sewer services, attorney's fees, interest, and costs."

At the time the lawsuit was filed, Smith said that the plaintiffs owed the city "$528,000."

"As a result of the lawsuit, we agreed to them owing us $30,000 and also that we would install 68 individual meters on Oak Park apartments," Smith said.

There were two master meters installed and the city takes the readings from the 68 meters, which are all put into a separate account "deducted from the uses from this meter."

"Take all those 68 bills and then this bill from here off the master meter and that is how he is billed," Smith said.

The settlement and agreement and release among "Gulf Shore Properties, LLC, Oak Park Mississippi Properties, LLC, Waveland Properties, LLC, Michael L. Brown, the city of Waveland, Mississippi and the city of Waveland Board of Mayor and Aldermen" was signed on June 21, 2018.

According to the settlement, "Waveland will pass a new ordinance that (a) provides that multi-unit properties are billed in the same manner by which commercial customers are billed, with each customer billed based on the size of the city-supplied water service supplying water to the property; (b) provides that all commercial customers are charged a single monthly base charge for service that is based on the size of the city-supplied water service line supplying water to the property, with the customers also charged for consumption at a rate per 1,000 gallons of usage; and ( c) excludes any methodology that bills or charges a customer based on the number of units, occupied units, buildings, or complexes on the applicable property for the customer. The parties agree that Gulf Grove and Oak Park will be billed in the same manner by which commercial customers with six-inch city-supplied water service lines are billed."

In addition, "the Brown parties shall pay Waveland the total amount of $30,000 as the adjusted amount due. The Brown parties shall make payment to Waveland of that total amount in monthly installments of $1,250 per month."

The board adopted Utility Ordinance No. 371.2 on June 20, 2018 as dictated by the settlement agreement, which changed how the city billed multi-family dwellings such as apartments and duplexes, Smith said.

"This wasn't hidden, this was all out in the open," he said. "Very transparent."

With regards to cutting off the water services for non-payment, Smith said, the city would also have cut off the services to Idlewood since the line also runs to that area.

Smith referenced his comments at last Wednesday's regular aldermen meeting where he stated that the utility fund was in deficit.

"We said it wrong," Smith said.

Waveland City Clerk Mickey Lagasse said that, "we are looking at the budgeted year and the expenses as budgeted to ensure that the utility account does not go into the red. We are currently in the black and look at various options to prevent us from going in the red, which includes cutting expenses."

With regards to how the $528,000 in past-due payments affected the city, Lagasse said the city "had a good reserve fund in our utility account."

Smith said that, during Wednesday's meeting when Alderman Bobby Richardson brought up the grinder pumps, he was "trying to make a point to the board, by being as transparent as I could, to let the board know where we were at and that it was something that would have to be addressed."

Smith said that Brown's current account has not been paid.

The Sea Coast Echo, through a public records request, obtained the bills dated Sept. 16 to Oct. 15 for Oak Park MS. Properties, LLC and the bills dated Oct. 16 to Nov. 15 for Gulfshores Properties, LLC.

The master meter bill for Oak Park MS. Properties, LLC has a gross amount due of $33, 294.25 and the master meter bill for the Gulfshores Properties, LLC has a gross amount due of $35,426.77.

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