EPB admits it overbilled Chattanooga $1.2 million on streetlights

photo Harold DePriest

After months of public debate, private discussions and recent litigation for millions of dollars, the city's Electric Power Board concedes that it overbilled Chattanooga more than $1.2 million for its streetlight energy.

In a recent audit discussed Tuesday at the City Council, EPB backed down from its original notion that any overcharges to taxpayers from older, high-wattage lights no longer on the poles was balanced out by underbilling elsewhere.

EPB President and CEO Harold DePriest also said the power board's process was so error-ridden that officials couldn't determine how many lights were being replaced.

City Auditor Stan Sewell told the City Council that the accounting errors were a cause for concern but he didn't find any intentional wrongdoing.

"If I were running the EPB accounting department I would be embarrassed, but I don't see where anyone had anything to gain," Sewell said.

But whether EPB needs to repay back the city is still undecided.The exact amount the power board owes is also still in question -- Sewell found EPB owes about $1.2 million for seven years or $1.7 million for 10 years of overcharges, while EPB's auditing firm, Mauldin & Jenkins, found $1.5 million in overcharges going back seven years.

Because the city owns EPB, Councilman Moses Freeman argued the last few months of debate have been for nothing, but l Chairman Chip Henderson said it was good to bring the process to light and fix it.

When Sewell began his report Tuesday afternoon, the council didn't have a quorum because five members were missing. Two arrived late and Council members Chris Anderson and Jerry Mitchell didn't attend.

In the end, the council opted not to do anything on the advice of the city attorney's office.

Assistant City Attorney Phil Noblett pointed to a $10 million whistle-blower lawsuit filed against EPB on behalf of the city and state by entrepreneur Don Lepard and advised the council to let the lawsuit play out in court before deciding how to move forward.

Lepard alleged in the lawsuit that he discovered an estimated $5.9 million in billing discrepancies when Chattanooga officials contracted with him in 2011 to replace streetlights, but the suit said his warnings to both parties fell on deaf ears.

Instead of settling the matter with the city, EPB instead began making covert changes to its billing procedures and attempted to discredit Lepard, he alleged.

The council and mayor's office elected not to join Lepard's lawsuit, explaining that a small group of the mayor's top staff was privately pressing EPB on its overcharges and also that they wanted to avoid paying attorney fees.

But at Tuesday's meeting, the mayor's chief operating officer, Brent Goldberg, told the council the mayor's office had been asked to step aside until the lawsuit is settled.

Contact staff writer Joy Lukachick at jlukachick@timesfreepress.com or 423-757-6659.

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