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David Hughes, PE, vice president of Woodard & Curran, and Denise Cameron, PE, project engineer, found that more than 30% of Quincy, Mass.'s master meter water use was not being billed to customers — and that the city's department of public works had few effective management reporting tools to ensure the accuracy and reliability of its billing systems. Photo: Woodard & Curran

Brian Carlisle recognized early in the process that staffing issues caused the department to operate in a very reactive manner. “There was no time or money to invest in fixing processes. Now we have cost-benefit analysis data to fund the operation at the right level and reduce our overall expenses,” says the city's water and sewer superintendent. As a result, the city added one billing clerk (bringing the number of clerks to three), improved the efficiency of meter-read routes, investigated the root causes of repeated “estimated” reads, and adjusted its rate setting methods.

IMPROVING THE SYSTEM

The public works department established a clear policy for refunds, an abatement procedure with an audit trail, and standard operating procedures for documenting meter rereads and bill reissuance. It also implemented a proactive collections program and timely notifications for past due balances through the city treasurer/collector's office, leading to almost $2.5 million in liens and interest on past-due balances collected in the first full year. Prior to the audit, the city's rate setting model assumed all users paid their entire bill every time.

The department also revised its financial model based upon reasonable estimates of water consumption and corresponding sewer discharges, reasonable collection rates based upon actual historic data, and an indirect cost allocation method approved by the city's external auditor.

The city implemented a more thorough review of the meter calibration data, monthly large-volume user reviews, and a new program for leak detection that prioritized potential areas to investigate for leaks based on the usage age and type of pipe.

The audit led to several new management reports to improve quality control and oversight and changes in the way data was handled during the upload process. That ultimately improved the accuracy and efficiency of data entry and reduced the number of credits to customer accounts resulting from data entry issues.

Quincy invested a total of approximately $75,000 in the audit, which is less that 1% of its annual $40 million water and sewer departments' budgets. For an average utility, the process would likely take three to six months and cost $20,000 to $100,000 depending on the complexity of operations, availability of key staff, and level of detail needed.

The city is now expected to fund a $1 million reserve account entering the 2009 fiscal year — a turnaround of more than $5 million. It also decreased the burden on overloaded staff and reduced the number of refunds. “No utility can afford to knowingly run a deficit,” says Lawrence Prendeville, Quincy Department of Public Works commissioner. “This audit established a road map for continued improvement.”

— Shea is a water and wastewater engineer and a vice president of Woodard & Curran.