This article has been updated with new information.
The San Diego’s City Auditor’s Office has released its review of the city’s water billing procedures, five months after hundreds of water customers complained they were overcharged hundreds and in some cases thousands of dollars.
The report found errors made by 10 employees reading water meters led to more than 11,000 customer bills that were corrected in 2017 and that meter readers had learned ways to hide mistakes made out in the field.
After the audit was released, San Diego Mayor Kevin Faulconer called for reforms within the Public Utilities Department.
"[The Public Utilities Department] needs to be more transparent, with a customer service focus," Faulconer said at an afternoon news conference. "That's not happening now."
The audit reviewed 1.3 million water bills issued in 2017. Of those, the audit found 21,000 customers saw their bills’ water use double or more from their previous bills. Those findings are in line with a billing data analysis performed by NBC 7 Responds and media partner Voice of San Diego.
“This does not mean that these customers were incorrectly billed,” states the report. “The increases could be a result of actual water consumption.”
Meter misreads were not the only problem. The report criticized the Public Utilities Department for failing to supervise meter readers out in the field, including shortcuts that were used by meter readers to prevent error alerts from being sent to their supervisors.
In the field, if a meter reader enters a misread or if an entry is flagged, the handheld device they carry sends an alert to the department.
But the Auditor’s office found meter readers used codes meant for their supervisors to silence the alerts. By doing this, the report states employees prevented their supervisors from seeing the actual number of misreads on any given meter.
“By not evaluating meter reader performance, PUD cannot sufficiently manage staff capacity and ensure accurate meter reads,” the report said.
To read the audit report, click here.
In 2017, the report found 57,117 water meter reads were flagged for review and as a result, 21,478 water bills were corrected. Of those, 2,750 bills were corrected after customers had already received the bills, the rest were corrected prior to being sent out. More than half of those billing adjustments were caused by meter misreads. The audit does not state a reason for the remaining 46 percent of bills that were corrected.
The audit also discovered issues with the software used to input customer billings and data as well as poor training of employees on that software.
“[W]e found that the City’s new infrastructure management system, IAM San Diego, is delaying the processing of work orders to repair or replace broken meters...” the audit report states.
According to the report, the “rollout” of the IAM San Diego software, of which the city spent approximately $50 million on, was not “well coordinated.” In many cases, water department employees were forced to input repair data into the system manually.
“[The Public Utilities Department] indicated that staff are still learning how to use the system creating the potential for errors,” added the report.
Another major contributing factor to the high water meter bills is the frequency in which employees were estimating water use for bills. Estimates are used when meter readers are unable to access meters, whether that be because of obstacles, or if the meter is broken. However, the system issues alerts when more than three consecutive estimates are used on a single meter.
But the audit found that in many cases reports that meters were broken went unnoticed for more than a year, resulting in the need for additional estimates.
Furthermore, city auditors stated that supervisors at the water department gave meter readers “mixed messages” in regards to reporting broken meters.
“[M]anagement advised meter readers to not enter trouble codes due to a backlog of duplicate service requests at the Meter Shop.” the report states.
The report found that smart meters, or the city's $60 million dollar investment to switch to wireless meters, played a small part in the billing issues.
The audit said, “...three [smart] meter models caused a disproportionate amount of AMI network read errors.”
Eduardo Luna, San Diego's City Auditor, told NBC 7 Responds those three smart meter models were residential-sized meters, manufactured by two companies, Badger and Hersey.
Luna added that PUD reported that the errors were due to programming issues, but that the Public Utilities Department would have more information on the problems.
“Meters [that] read automatically over the AMI network accounted for a small number of reading adjustments,” the report said.
The audit report does not address a “glitch” identified in more than 36,000 Hersey smart water meters currently installed. One of the city’s smart meter vendors informed the Public Utilities Department about the “glitch” at a meeting in April 2016.
Previously, the “glitch” had not been publicly disclosed by the Public Utilities Department and the agency only confirmed information surrounding the “glitch” after NBC 7 Responds and Voice of San Diego questioned officials about the meeting.
Jerry McCormick, a spokesperson for the Public Utilities Department, said Mueller Systems, the vendor that manufactures Hersey Meters, classified the “glitch” as only a “minor” problem and that no corrective action was needed.
“The register’s mechanism [that] counts and displays cubic feet exhibited a ‘glitch,’” McCormick said. “Since the City bills in units of hundreds of cubic feet, it did not affect our reads or billing, according to the manufacturer’s representative.”
However, the audit found that 4,500 of all smart meters that were installed last year were flagged for review immediately after installation.
The report revealed that three specific models of smart meter did have a “disproportionate” amount of meter reads but the report did not disclose the manufacturer of those meter models.
The City Auditor will present the report at a special meeting of the Audit Committee on Monday at 8 am. Luna will then present the report to the city council’s Environment Committee on August 2.