Awhile back, I started a thread about my mom's ongoing city water usage dispute . Bottom line is that, now, the city admits their mistake -- almost 25 years ago, the wrong meter was installed on the line. Basically, instead of a one inch line meter, a crazy mistake: they installed a two inch meter on the one inch line. This error was finally discovered by an expert they brought in after I wrote a letter and asked for an official inquiry.

So, I'm trying to figure this out. Heck, they oughta pay me. I might send them a bill. They are working with me but they aren't making any offers. They want me to give them a settlement figure. This will be a sizable amount of money, since we're talking about 25 years of overcharges.

I've built a spreadsheet to come up with average usage but they only gave me back to 1999. I need some years prior to my dad's death. They say it will be a pain to dig up old records from storage boxes. They only have 1999 forward on the computer. But I can't be accurate without knowing how much the house used when he was alive, the majority of the overcharge period. Painful as it would be for them, I think they should have to dig them up. I don't think that's unreasonable. I am remaining very calm about this.

Does anyone know where I could find a listing of Savings Account rates since 1981? Surely, somewhere, there is an online archive of these rates. (I've Googled and no dice yet.) Seems to me, I should try to figure out an accurate average usage. Then figure out how much was overcharged. The overcharge, we should assume this would have been put in savings account.

OR... I thought also of applying whatever late charge THEY use. Which I'm sure is a sky high rate.

Any ideas on how to figure this? To get specific, it's pretty complicated.

In the end, since this is quite iffy, I think I would give them the dollar amount offer AND free water usage for the rest of her life. That wouldn't hurt them at all. But due to factors I might overlook, this could make it equitable. I want to be fair to the small town but I want her to get what's hers. I told them she is about as frugal as they come... whatever money is left over at the end of each month, it's saved.

Comments are appreciated... if you think I am looking at this correctly or anything you could add.


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Bill
Yamaha PSR2000

Bill,
This is one case where you need an attorney.
DonM

I have to agree with Don here. You need legal representation here. The water company actually wants (YOU) to make an offer because they know that'll be the smallest hit on their wallets. However the things you need to do can be done much quicker with an attorney.

Also keep this in mind. With an attorney you can set your settlement agreement, and as part of that settlement you can have them cover your attorney's fees.

Bottom line "get an attorney". You have a good case. They admitted they are wrong here. Take all the documentation and turn it over to a lawyer. Most of the work is already done.

Squeak

This is seriously complicated. I am trying to find savings account rates back to 1981. Applying each month's extrapolated overcharge to a savings account seems reasonable to me.

I also need the actual records. If they exist. That would help immensely.

If you apply an overcharge to a Savings Account, in 25 years, the amount if VERY SIGNIFICANT. Obviously, the interest rate is a key factor. This could amount to LOTS OF MONEY, depending on the rate used. I keep trying to tell the mayor that. This is no small change deal. I think they should pay her interest.

If you have advise OTHER than going to an attorney, fire away. I don't know if my mom will do that. Her attorney is the town's attorney. Yeah, get another one. But I don't even know if she would do that. So, assume *I* will figure all of this out. But I'll talk to her about an attorney.


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Bill
Yamaha PSR2000

I know an honest one if you need his name.
DonM

Bill, I would imagine that you could go to any bank and ask for savings and interest rates from past years, they should have them
in the records dept. calculate the average usage per mo. per year based on the rates of the water co charges per meter, add in the interest then add a % for overall pain and suffering and inconvenience and you got it....any easier way is to just guess with an estimate..the only thing they can do is challenge it... then you refigure it.....
Tony Rome

H

[This message has been edited by nardoni2002 (edited 09-13-2005).]

A smart way might be to use the Dow Jones industrial average, since you're talking about a long time here, and the expectation is that you could have realized that kind of yield.

That would be pretty easy to track. The total claim would be figured with a fairly common regression analysis technique. You would avoid trying to figure interest rates, opportunity cost of money, etc.You don't need to figure your claim based on simple savings ccount rates, and that way would be harder to figure anyway.

Figuring compound interest on a monthly accumulation over a 25 year period of overcharges would be pretty hairy. This way is much easier and more equitable. The yield would be what you would have made by investing in the stock market or mutual fund. You could just choose a mutual fund that has existed for a long time and track what today's value would be with the assumptions outlined above. You'll find a math nerd at most graduate schools who could figure the formula, and the result would probably not be questioned in court.

Please excuse the accountant in me, but that's my background. Call (859-253-0390) or email me if you need to discuss further. A lawyer or consumer protection ombusman (all states have them) could quickly find similar cases and use that as a basis for calculating a settlement. The one I read about several years ago used the Dow as the basis for the claim. You should also make a claim with the comsumer protection division of the state attorney general's office. They'll contact the utility, and the utility is required by law to respond to them and you in a specific period of time.


This may not be as big a deal as you think it is but I know it's a real pain in the ***!


Best of luck!

Former "Bean counter" Russ