Friday, January 27, 2023

Virginia Beach kept paying power bill 20 years after vacating property; expenses totaled $144k

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Virginia Beach city workers turned off the lights Dec. 31, 1995 in an office building for the last time, just before moving into a new space.

But for the past two decades, while private workers have used the space, the city has spent nearly $150,000 keeping the lights on for them. That’s because city officials didn’t notify Dominion Virginia Power they’d left.

“This one is raising some eyebrows,” said City Auditor Lyndon Remias. He called the error both “inadvertent” and “costly.”

The average monthly bill was $597, which was paid 241 times — the last of which was paid February, according to the audit. That equals annual costs of about $7,164, and totals $143,877 paid since the city vacated the property, according to the audit.

The Beach pays about $23 million annually for energy through about 17,000 total bills. Earlier this year, as it was using a new energy bill tracking method, the city discovered that one of its 963 Dominion Power bills was for the property at 397 Little Neck Road, which it had not leased in 20 years.

The energy administrator then notified the auditor to look into the matter and to see if the funds are recoverable.

Remias is unsure if that is possible and declined to say how optimistic he was because the city is still in talks with the building’s managers about the funds.

“We’re trying,” he said, adding “any amount that we could recoup would be better than none.”

The city’s initial landlord at the property was listed at “S & H Company,” according to the audit report. The company now managing the property is Palms Associates LLC.

The director of that company did not immediately return a message seeking comment for this story.

One of the current tenants is Sentara Medical Group, which purchased a private vascular practice there in 2008. Dale Gauding, a spokesman for the hospital, said it knows nothing of the situation.

“This is a mystery to me,” Gauding said.

Asked if the city could be mistakenly paying bills for other properties, Remais said there is no way for him to know.

“I would hope there aren’t any,” he said. “We are not aware of any.”

Until the each city department cross checks addresses for energy bills with office locations, it is impossible to know for sure, Remias said.

He recommended in his report that each department do so immediately and annually. He also recommended a centralized database for city properties — ones both owned and leased.

Deputy City Manager Thomas Leahy wrote last week in a response to Remias’ report that his suggestions are being implemented.

“Although this is only three-one hundredths of one-percent of the annual energy expenditure, it should not have happened,” he wrote.

CORRECTION: A previous version of this story misidentified the owner of the tenant company that was reached for comment.

Have a story idea or news tip? Contact City Hall reporter Judah Taylor at or 757-490-2750.

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