CHESAPEAKE, Va. (WAVY) – The city of Chesapeake could owe millions because of an accounting flaw.
The flaw centers on the city’s Public Utilities Pro-Rata program. The program was designed to reimburse developers who build in the city. But an error that goes back to the 1980’s might have held back funds.
Over the last 30 years, development sites in Chesapeake have grown up around the city.
“If the developer can build their portion and it’s going to be able to serve more than just them, they are allowed to be paid back by other developers for the original construction efforts and costs,” says Director of City Public Utilities David Jurgens.
Jurgens says while developments have sprung up, the city hasn’t properly collected the money to pay the first developers back.
“When we received the funds before they were just counted as revenue,” he says.
The city also has to account for every development built since the program started.
According to a city audit they only have complete information for about 52 percent of the developments, and if those developers wanted to collect, it could cost millions.
“Around $3 million is the amount we could possibly owe to developers that hasn’t been paid out,” Jurgens says.
For the last few years Jurgens has worked with the auditor’s office to straighten out the program. As they work through each development’s financial history, Jurgens says he wants to make sure this never happens again.
“I just last month, requested one additional engineer and one additional accountant to completely manage the program,” he says.
According to Jurgens, those developers could collect their reimbursements. But the money would not come from the city utility customers’ pockets. He says the money is already set aside in their department.