Shreveport files suit against software company over water billing errors

Lawsuit alleges Shreveport underbilled water customers
Published: Apr. 7, 2017 at 4:27 PM CDT|Updated: Apr. 7, 2017 at 7:21 PM CDT
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SHREVEPORT, LA (KSLA) - The City of Shreveport has fired and filed suit against a company contracted to update the city's water and sewer billing system, claiming they are responsible for more than $1 million in lost revenue due to errors that led to customers being billed incorrectly. 

In the lawsuit filed Friday in Caddo Parish District Court, the City of Shreveport alleges Systems & Software failed to deliver on their end of the deal and asks the court to order the company to pay back at least $1,052,000 in lost revenue, plus expenses and damages.

"My administration is taking actions to address the long-standing Water and Sewerage Department billing issues we believe were caused by the City's third-party billing contractor, Systems & Software," said Mayor Ollie Tyler said in a statement released early Friday afternoon.

Systems & Software was hired as a subcontractor in 2010 to set up and provide training on a new tiered water rate structure for billing the city's water customers.

The errors in billing were brought to the city's attention by Shreveport businessman Scott Pernici and business partner Michael Wainright in 2015, who later sued the city for breach of contract over an agreement in which they claim the city agreed not to share the details of the underbilling with anyone else and to pay them compensation for uncovering the issues.

In January, Caddo District Judge Ramon Lafitte refused the city's motion to have that suit thrown out.

Pernici and Wainright filed a new lawsuit in March 2017 accusing the city of defamation and seeking damages. That lawsuit claims Tyler and other city officials used terms in statements made in public that referred to Pernici and Wainright's actions that included terms like "extorted," "blackmail," and "shakedown."

At last check, those lawsuits were pending in the First Judicial District Court and Pernici had filed yet another lawsuit in connection with the ongoing dispute with the city. The latest suit is seeking class action status on behalf of other Shreveport water and sewer customers "for the recovery of overpayments of water and sewer charges by and from the City of Shreveport over the last 10 years."

The suit, which lists Wainright as co-counsel, alleges the city has never implemented a system to properly record or bill customers' monthly water usage in accordance with city ordinance and asks the city to provide a detailed account of amounts overcharged to residents. It also demands that the city be prohibited from cutting off service to customers until it can prove the bills are correct.

The billing problems were corrected by August 2016, but according to Mayor Tyler, efforts to communicate with Systems & Software since the problems were detected has progressed through all of the steps required by contract to resolve issues with the subcontractor before filing suit became an option.

"Over this period, the administration has sought to hold the contractor accountable for the errors. The city has decided not to renew the service contract with Systems & Software that will expire at the end of this year and has provided the company with notice of this decision."

A Request for Proposal (RFP) is expected to be issued in May seeking professional submissions from interested providers for these services.

A new selection process which includes the administration and the City Council will be used to select the new provider.

"My staff and I are working tirelessly to resolve the problems created by the Systems & Software product," Tyler said. "We are committed to making system-wide and operational changes to address these and other related concerns which include the implementation of a reliable billing system that will have the full confidence of our citizens." 

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