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DPW to Refund $4.2 Million for Overbills on Water

February 23, 2012
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The city will be refunding $4.2 million to residents who were overbilled for water and sewer services for years. The Board of Estimates voted to make the payments Wednesday morning, according to a story in The Baltimore Sun, after receiving an audit of the Department of Public Works Bureau of Water and Waste Water.

“We would love it if you would mention all the steps we’re taking right now to improve customer service,” says Celeste Amato, a spokesperson for the Department of Public Works. “We’re about to up the number of customer service representatives. . . . We want to reduce frustration.”

Frustration was apparent in the 29-page audit, available at the City Comptroller’s web site. Among the findings:

  1. The Bureau of Water and Waste Water did not have written policies and procedures to guide its staff in performing their duties. (The Bureau says they’re there).
  2. There were no good records of adjustments for overbilling—so nothing to audit there.
  3. There were no actual or estimated meter readings for numerous new accounts for several years after new water meters had been installed.

Amato says that last issue was a communication breakdown within the department, so that the addresses of about 1,000 new meters at a county housing development never got put on a meter reader’s route.

But the main focus of the audit was the too-high bills many city and county residents receive seemingly at random. The problem has been epidemic this decade, eating up staff time at city council offices and causing no end of trouble for cash-strapped residents, who can face the loss of their property for unpaid water bills. From the audit:

There were 57 properties included in the city’s May, 2010 Tax Sale solely because of unpaid water and sewer charges that were based on estimated usage rather than actual meter readings for consecutive periods ranging from four quarters (1 year) to eighteen quarters (4 ½ years).

The auditor selected three properties for testing, and found no “actual meter readings” with which to calculate the correct charges.

The audit began when a citizen complained about crazy bills for 20 properties. The citizen is not identified in the audit, but the scenario sounds a lot like Linda Stewart, former proprietor of the Gaslight Tavern, who has been tracking water bills since about 2006, when her bar was threatened with tax sale over wrong bills (“Water Weight,” Mobtown Beat, June 3, 2007). Stewart, who started this facebook page to publicize the water bill irregularities she has been finding, says she isn’t sure if she was the source for the auditor, but  “no one has more information than me,” she says. “I think the information had to come from me.”

Stewart says she’s glad something is finally being done, but she wonders why it’s taken five years.

The auditor found 12 of the 20 test accounts to be overbilled by a total of $5,824. One more got overbilled and later refunded. And the others?

We could not determine whether two of the accounts included as part of the original allegations were over or under-billed. For one of the accounts, there were no actual water meter readings during the period for comparative purposes. The other account contained a “True” reading and no estimated readings; however, the meter appeared to be running backwards.

The remaining five accounts seemed OK, the audit said.

The tendency to estimate bills—and to overestimate those amounts—appears to be the core of the problem. There are 411,000 active accounts, of which 18,266 had been estimated for a year or more, according to auditors (the bureau says it’s more like 10,000). That’s at least 2.5 percent of the total. In its response to the new audit, the bureau noted that 2,222 city accounts had been overbilled and 163 underbilled, while in the county, 2,747 were overbilled and 140 were underbilled. Taken together, then, the bureau is about 15-20 times more likely to overbill customers as to underbill them.

Amato could not explain that tendency.

In 2008, John Brewer, who was in charge of billing for the system, estimated the bureau had an error rate of less than 0.2 percent—two errors in 1,000. Amato says Brewer retired about a year ago and that the bureau is working to fill his position.

In 2009, 88.4 percent of the meters were read; in 2011,  92.8 percent, which means 7.2 percent were not read that year—about 56,000 meters.

Amato says there are multiple reasons for the unread meters. “Some are inaccessible,” she says. “They can’t be found. We have increased the number of staff dedicated to that. Now we start dropping a new meter in whenever the old one is gone.” Others who have inside meters that are supposed to transmit a reading to a box hanging outside (but don’t) have been getting forms that instruct them to read their own meter and call in the readings. This is a technique in common use in many cities. It is new to Baltimore.

“The [billing] system is 40 years old,” Amato says. “Time for the upgrade.”

Says Stewart: “It’s too big for them to fix overnight. It’ll take years for them to fix this problem.”

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