THE MISSISSIPPI LEGISLATURE

Alcorn State University is unique among Mississippi universities in that its location is somewhat isolated, not being in close proximity to any cities of large or moderate size. In 1952, due to the rural location and limited natural gas services in the area, Alcorn State University (ASU) sought and was granted authority from the Board of Trustees of Institutions of Higher Learning (IHL Board) to install a pipeline to connect to an existing well head on campus. The pipeline is the only source of supply of natural gas for the operations of the university.

Subsequently, in order to attract faculty to ASU, the university sought authority to allow faculty in private residences to connect to the university’s gas and water systems. In 1968, the IHL Board granted authority allowing privately owned ASU faculty houses to connect to the water and gas lines of the university. At the time of PEER’s review, sixteen private property owners (one of whom operates a ten-unit mobile home park) received utility services from ASU.

In 2002, a private citizen whose residence is adjacent to the university and private property served by ASU water and gas lines complained to PEER that ASU attempted to install a water line across his mother’s property without a proper easement. This complaint raised questions concerning the university’s authority to provide utility services to private property owners and how ASU was managing the utility system.

ASU currently offers natural gas and water (including sewer) utilities and cable television and garbage collection services to the sixteen private property owners in the immediate area of the university campus.

ASU’s Office of Business Affairs is primarily responsible for the administration of gas, water, cable television, and garbage collection services to these private residences. The university offers automatic payroll deduction for monthly utility and other service fees to all active faculty and staff who own private residences. Retired faculty and nonfaculty are required to make payments to ASU’s Bursar’s office.

Alcorn State University has exceeded the authority granted to it by the IHL Board by allowing nonfaculty to connect to or use gas and water services that were to be limited to privately owned faculty houses. Of the sixteen private property owners receiving utility services from ASU, only three are active faculty members according to the IHL Board’s definition of faculty.

Alcorn State University has also exceeded the authority granted by the IHL Board by providing utility services (i.e., cable television and garbage collection) other than those specified in IHL’s order. Whereas the IHL Board’s order gave authority to tie in to the gas and water lines, as of May 30, 2003, ASU provided cable television to fifteen private property owners and garbage collection services to thirteen private property owners.

ASU’s Business Affairs Office has not ensured that faculty and staff living in private residences receiving water and natural gas through the university are metered and billed according to the actual units of service used. University administrators have not acquired separate water and gas meters for the adjacent private residences. As a result, customers are not being charged for actual units of service used.

ASU’s Business Affairs Office has not maintained records to reflect the reasons or justification of monthly charges and the method used in determining proposed monthly charges for water, natural gas, cable television, and garbage collection services. Thus PEER or another third party cannot determine the reasonableness and basis of amounts charged. Also, ASU did not give private property owners written notice of changes in monthly utility charges that went into effect on July 1, 2003.

With the exception of one resident who connected in 2002, ASU has no documentation to show that persons living in private residences paid fees to connect to ASU’s water and natural gas lines. Thus ASU has no evidence that the university did not bear labor and material costs for these utility connections.

From January 1, 1998, to May 30, 2003, the university has allowed faculty and nonfaculty who live in private residences to have past due utility accounts. As of May 30, 2003, five individuals had past due accounts totaling $1,049; all but one of these accounts has since been paid. One account was eleven months past due as of May 30, 2003.

ASU’s Business Affairs Office also does not have deposit requirements and has not assessed late fees for customers who are past due in payment of utility bills. Until March 2003, ASU’s Business Affairs Office had not generated reports of past due accounts or issued billing statements to residents.

The Office of Business Affairs does not have a written policy regarding disconnection of service for nonpayment of utilities. PEER found no record of service disconnection for residences that were as much as eighteen months past due.

1. Alcorn State University should seek authority from the Board of Trustees of Institutions of Higher Learning to continue service to existing customers or begin procedures to discontinue service to ineligible recipients.

2. The Board of Trustees of State Institutions of Higher Learning should reconsider its approval granting ASU permission to connect faculty to the university’s water and natural gas system.

3. If the IHL Board chooses not to modify the order to authorize utility services to nonfaculty, the board should require Alcorn State University to cease providing utility services to nonfaculty who live in privately owned residences.

4. Alcorn State University should take immediate steps to ensure that water and gas services for residences of faculty and nonfaculty (if services are continued to this group) are metered. ASU should keep a record of meter measurements indicating the identification of the customer, current location of the meter, and purchase date. All water and natural gas furnished by the university to customers should be charged based on meter readings that indicate units used. ASU should, upon request of any customer, furnish a statement showing that the meter on customer’s premises was read for billing purposes.

5. Alcorn State University should take the necessary steps to include in its standard operating policy and procedure a written description of the process used to arrive at monthly charges for water, natural gas, cable television, and garbage collection services, including the person or persons responsible for developing and approving changes in monthly utility charges. Alcorn State University should arrive at a charge for services that is fair to Alcorn State University and faculty and nonfaculty who are users of services. Alcorn State University should identify in writing a clear, concise, and non-technical description of the proposed change in monthly charges, a statement of the reason, and justification of the change. Customers should be informed of the new monthly charges in writing within thirty days prior to the date when the new charges go into effect.

6. Alcorn State University should consider requiring a cash deposit from customers to guarantee the payment of any bills that may become due. The required deposit should not exceed an amount equivalent to a single estimated average bill for residential customers. ASU administrators should consider assessing late fees for customers who are delinquent in payment of water and natural gas, cable television, or garbage collection bills.

7. Alcorn State University should adopt written policies and procedures governing monthly billing and collection of customer accounts for utility service. In particular, these procedures should address delinquent accounts and the discontinuance of service for nonpayment. The Vice President of Business Affairs should ensure that his staff designs appropriate forms and completes the tasks necessary to implement these procedures.

   The Vice President or his designee should review monthly past due reports and issue past due billing notices to utility customers who are thirty days past due. Alcorn State University should immediately collect on all past due accounts.

8. In the future, Alcorn State University should document that the faculty and staff who live in private residences have paid the university for connections from their private residences to the university’s water and gas lines. ASU should provide documentation of payment to the Board of Trustees for the State Institutions of Higher Learning.