Simi Out $700,000 Over Unbilled Sewer Charges : Government: Hundreds of houses and condominiums were never billed for the service, audit discloses.

Simi Valley leaders were trying Thursday to solve the mystery of the missing sewer bills--a bureaucratic snafu that appears to have cost the city up to $700,000 over the past decade.

During a routine audit, city staff members recently found that the owners of 748 local houses and condominiums have never been billed for sewer service.

City Manager Lin Koester said the oversight apparently occurred at a time when Simi Valley officials were relying on a local water company to alert them to new customers.

“Somehow, the data was not put into the system,” said Koester, who learned after the audit in July that hundreds of homeowners were getting free sewer service. “I was extremely upset and wanted to know how this could happen.”

At issue are 405 single-family detached houses and 343 condominiums that have never been billed for sewer service. The city currently charges $14.80 per month for houses and $10.10 for condominiums to cover the cost of carrying away and treating waste water.

The city began billing these homeowners for service beginning in July, when the problem was found.

Koester said his staff is trying to find out if there is any way the city can recover the missing income--estimated at $600,000 to $700,000--from the residents or from the water company, if it was the company’s fault.

Since 1986, the city has relied on in-house sources to find out when new sewer customers come on line. Koester said he believes no homeowners have slipped through the system since then.

The city manager described the missing sewer bills as a puzzle from the past that may be nearly impossible to solve. “It’s of a historic nature,” Koester said. “The system that’s in place now is functioning well.”

Prior to 1986, Simi Valley’s Sanitation Department was supposed to be notified whenever a new homeowner requested service from Southern California Water Co., an investor-owned utility that serves about 40% of the city. The remaining residents get water from a public agency supervised by the Simi Valley City Council.

On Thursday, Koester met with Skip Faria, district superintendent for Southern California Water, regarding the missing bills.

Faria, who has held his post for less than a year, could shed little light on the mystery.

“To my knowledge, there was no oversight on Southern California Water’s part,” he said in an interview.

But Faria said he will cooperate with Koester’s investigation. “We have a good working relationship with the city,” he said.

Mayor Greg Stratton said the problem dates back to the early 1980s, when the city learned that some residents had hooked up to the sewer system illegally or simply were not being billed for the service.

“We did a whole bunch of things at that time to tighten up the system,” he said. “We thought we’d found everybody. Obviously, we didn’t.”

Instead of dwelling on the missing money, Stratton said he prefers to think about the unexpected boost in revenue the city’s sanitation budget will receive from the 748 homeowners who must now pay for sewer service.

“I don’t expect to go to any major litigation over it,” the mayor said.

But he added: “Anyone who wants to pay for the past 10 years, we’ll certainly accept their check.”