What the Shreveport Water Billing Lawsuits Tell Us About How We Deal with Problems

The City of Shreveport has filed a lawsuit (599879 – Section C) against its water billing provider, Systems & Software Inc, claiming the company is responsible for lost revenue of $1 million stemming from a change in rate structure approved by the City Council in January 2015. This is the fourth lawsuit, including one class action suit, in the parade of filings regarding the water billing issue.

The city was made aware of the billing error by Scott Pernici and Michael Wainwright, who told the city only after strong-arming city attorney William Bradford into signing a nondisclosure agreement. The pair then made a demand that the City pay them 25% of the money collected from fixing the error. The City countered with an offer of 10% of the under-billed amounts for the period the error was in effect (that’s a $100,000 reward for finding an error) which was refused by Pernici and Wainwright. Mayor Tyler would later describe the demand for more as blackmail. All the while, the city council was unaware of the situation and were none too happy when these proceedings came to light.

The pair sued the City for breach of the non-disclosure via Sand Beach Properties, LLC. The city claimed that the information was public, as they had access to the data, but had not discovered the error.

Then a second lawsuit was filed in the fall of 2016 asking the court for $200 million in compensation, a total reached by counting each breach of the NDA as a separate incident.

In April of 2017, a class action lawsuit was filed against the City for over-billing a “significant number” of city residents as a result of the error.

According to a press release from the city, Systems and Software was hired as a contractor by the City in 2010 to provide the operating management system for water and sewer billing. The City claims it has been in communication with Systems & Software since the problems were detected and has been working through the steps required by contract prior to filing suit. Additionally, the city said that over that period, the administration has sought to hold the contractor accountable for the errors.

The release also says the City of Shreveport has decided not to renew the service contract with Systems & Software that will expire at the end of this year and will issue a Request for Proposal (RFP) in May to find a replacement.

This has really gone way, way overboard. Where the buck will stop is now up to the courts which have four lawsuits on their hands, but the real issues, the ones that led us here lie in a few places:

1) The contractor messed up. They put in the wrong numbers. Somewhere, someone didn’t double check their own work before billing tens of thousands of residents. This was a one-time change. It should have been caught.

2) The city water department also messed up. They didn’t check the contractor’s work. There wasn’t any second check. Certainly the city has enough data that anyone looking at projected numbers should have noticed something was off when a million dollars evaporated… don’t they? No one noticed for almost 18 months. It would not have taken 5 minutes for someone to look over the shoulder of the contractors to make sure the rates were typed in properly.

3) Those who brought the situation to light got greedy. Really greedy. It’s one thing to tell the City of a problem resulting in lost revenues and, perhaps, overcharging. It’s another thing to demand large sums of money in exchange for that information. They did some digging and found a mistake. They deserve a reward and commendation. If they had taken the city’s offer and been good citizens that helped the community fix an issue, we could be beyond it now – including restitution for over-billing of residents.

4) The mayor and administrative officials messed up. The moment it was discovered, they should have told the council and then the public as soon as the error was confirmed. The idea that this information was withheld even from the council is astonishing. The fact that it was held from citizens until journalists broke the story is infuriating. This is something that affects us all, every district, and our ability to pay for our city which is already under water financially.

How this unfolded inside City Hall is still somewhat of a mystery, but what we do know is enough to say it was handled very badly. This is why we need a better standard of transparency. We need a higher standard of expectation that the citizen comes first. Officials should realize people are more open to forgiveness if they are forthcoming rather than reactionary, even if the current administration was dealt a bad hand. Truthfully, those who discovered the error should have been lauded, given a token of appreciation and an award, but they too squandered that opportunity.

We can do better, and we should demand it of our city and our fellow Shreveporters.