Water Department Spends Nearly $2-Million More Than What Council Approved for Smart Meter Program - NBC 7 San Diego

Water Department Spends Nearly $2-Million More Than What Council Approved for Smart Meter Program

NBC 7 Responds and media partner Voice of San Diego found the Public Utilities Department spent nearly $2-million dollars more than what the city council had approved for the city’s switch to smart water meters.

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    This article has been updated to reflect the city's controls in place to prevent overspending.

    San Diego’s Water Department spent $1.8-million dollars more than what the city council had authorized to spend on the implementation of its $67 million smart water meter program. 

    Those findings and more are featured in “Flood of Distrust: An NBC 7 Responds Special Report”. To watch the special report, click here

    NBC 7 Responds and media partner Voice of San Diego found the cost overruns while investigating the program. According to a July 5, 2012 city council resolution, councilmembers approved $2.1 million to purchase smart meters from Mueller Systems over the next three fiscal years. 

    But on October 8, 2014, the Public Utilities Department returned to the city council for more money. According to city documents, department officials stated they not only spent the $2.1 million but paid Mueller Systems an extra $1.8 million for additional meters. 

    According to the city council resolution, the water department did not provide any reason for the extra spending nor did the council ever ask. 

    Nicole Darling, a spokesperson for the City of San Diego, said the city updated internal controls through its financial software, SAP, in 2016.

    “It would be safe to say that since 2016, the City has implemented new software and increased controls in SAP,” Darling said. “Among other things, these updated internal controls in the financial transaction system in SAP have helped prevent all City departments from overspending on contracts.”

    SAP or the Enterprise Resource Planning (ERP) system is a computer system that maintains the city’s financial, logistical, and personnel records.

    “In terms of what's happened in the past, I'm not able to thoroughly address that.” Deputy Chief Operating Officer Johnnie Perkins told NBC 7 Responds in response to questions about the department’s spending. “What I can tell you is that going forward, what's really important to us is the customer experience.” 

    Six years ago, the city of San Diego’s Public Utilities Department made the commitment to transition from manual read water meters to wireless smart meters. 

    Manual read meters require city workers to physically access a meter and record a customer’s water usage while smart meters can be read wirelessly through an Advanced Metering Infrastructure, or A.M.I. for short. 

    Smart meters have also been credited for assisting customers who are looking to conserve their water use by sending customized alerts when high usage occurs. 

    In 2012 the City of San Diego estimated that it would take five years to convert the 282,000 residential and commercial water meters citywide. But, the transition has not gone as quickly or as easily as originally planned. 

    As of August 2, 2018, the city has spent more than $19-million dollars on the AMI project and, according to internal documents obtained by NBC 7 Responds, only 16,000 customers or five-percent of the city’s customers have working smart meters. Out of those 16,000 customers, only 4,531 are connected to single-family-homes. The rest are connected to commercial properties. 

    “We're being very careful before we rollout full [smart meter] implementation,” Perkins said. “How are we going to manage the expectations as well as the revenue for the taxpayers. And that's really critical for us because we want to make sure that the money that we're using is spent wisely because it is the ratepayers’ money. We work for them.” 

    Perkins sat down with NBC 7 Responds to discuss the Public Utilities Department’s customer service and billing complaints raised over the past year. To watch that special, click here.