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Council approves $45,874.50 refund to Lockwood Dairy; orders internal audit of utility billing accounts
Summary
Junction City council approved a $45,874.50 refund to Lockwood Dairy after staff discovered a dumpster billing error; council also endorsed a citywide internal audit of utility accounts and a new policy to prevent future overbilling.
The Junction City City Council voted unanimously Tuesday to refund Lockwood Dairy $45,874.50 after staff discovered the company had been billed incorrectly for a 4-yard dumpster since 2017.
Public Works Director Gary Caffey told the council staff found a deactivated account had been reactivated but an associated dumpster charge was not removed, leading to recurring charges. "That amount is $45,874.50," Caffey said, describing staff's review of rate changes and calculations to identify the exact overpayment.
The refund exceeds the public works director's spending authority and the city administrator's authority, so Caffey presented the request to council. Councilor Weisberg moved to approve the refund; Councilor Senegat seconded the motion. The motion passed unanimously with each councilor voting yes.
Councilors asked how the error passed audits and multiple staff reviews. Caffey said the issue resulted from how accounts were deactivated versus disconnected in the billing system and acknowledged the mistake passed through audits and the previous software conversion. He told the council the city had already contacted Lockwood Dairy and the company appreciated that the error was caught.
Following the refund vote council approved a staff-led internal audit of all utility billing accounts. Caffey outlined the audit steps: complete a dumpster reconciliation, verify can/serial numbers on routes, conduct physical meter checks for water accounts (noting 1,700 had already been reviewed during a lead survey), and adopt an annual verification policy. "So no account, even if there's a mistake, it will never be more than six months through the year," Caffey said of the planned policy and procedures.
Council members praised the proactive approach. One councilor said, "Thank you for taking a beat and doing the right thing," and asked that committee updates be provided as audit segments finish.
The council authorized the public works director to sign documents necessary to issue the refund and directed staff to finalize and implement the internal audit policy and procedures.
