An outside auditor recently completed an assessment of the city’s utility billing and collection services spurred by issues with bill delays and customer complaints.
The hired auditor, KPMG, found that internal and external factors led to a series of operational and technical issues that limited the Utility Services Division’s ability to consistently provide effective and efficient water meter reading, billing and customer service.
The city hired the firm for $141,846 after problems implementing new billing software led to billing delays during the first quarter of 2016. As a result the utility division was only able to process five of the six billing cycles, which in turn led to the final utility bill being equally divided among the fourth and fifth bills based on estimated customer consumption.
The city’s internal auditing director, Megan Duffy, said the goal was to look backward a bit and determine whether customers were billed properly and responded to in a timely basis.
“The large focus was to look forward and see what improvements we can make in the organization,” Duffy said. “It was really important for us to try to restore trust in this process as well as identify areas where we can make improvements to continue to provide good customer service to our citizens.”
City officials have since made progress, but still have a lot of work ahead — some of which could come with a high price tag, according to the report.
The utility division was found to have improved the timeliness of customer billing throughout 2016; but some of this year’s billing cycle timelines are behind schedule. One billing cycle scheduled to be mailed on June 8 was not sent until July 10. Such delays impact the city’s collection efforts and overall cash flow and the division may again only be able to process five billing cycles rather than the six billing cycles for the year, the firm found.
The biggest workload driver for billing staff was reportedly reviewing and resolving meter reading errors and issues classified as “exceptions.” Such exceptions include readings that show zero consumption, negative consumption and significant variances compared to normal usage — the last of which made up 65 percent of the 47,000 exemptions examined.
The percentage of total exceptions for three sample billing cycles decreased from an average of 35 percent in June 2016 to an average of 23 percent in March 2017, indicating improvement in exception processing. However, an exception rate of 23 percent is “labor intensive” and indicates the utility division is devoting significant time and resources towards addressing the issues, the firm said.
Estimated readings were found to be used to resolve meter reading exceptions when actual readings could not be obtained in a timely manner. From January 2016 through July 2017, the utility division performed more than 29,000 estimated meter readings. Despite industry guidelines that recommend actual readings at least every other billing cycle, the assessment found that three billing cycles during June 2016 through March 2017 experienced an increasing number of consecutive estimated readings.
The level of recurring estimated meter readings reportedly indicates that the utility division is having issues obtaining meter readings and processing exceptions in a timely manner to facilitate weekly cycle billing.
Relying on estimated readings can create an overall decline in public trust in the billing process as customers may believe the estimated consumption assigned to their water bill does not accurately reflect their actual usage, the report stated.
Complaints about high bills have decreased since last year, but there are still some customers claiming excessive charges.
On Wednesday, Gina Porter, 84, contacted the paper, claiming that she had received a $710 water bill — up from a previous bill of $167 — despite the lack of a leak or any excessive usage that could explain the charge. Over 31 years at the house where she lives, her highest water bill was $450, Porter said.
“That includes the time I had the pool emptied twice,” she said.
City officials are urging residents who think their bills are incorrect to call the city’s service number, 311, so staff can do an assessment and see if there is an issue such as a leak or incorrectly read meter. Still, Porter said city workers came by three times and were unable to offer an explanation.
Other key findings:
Other key findings from the audit include a lack of documentation regarding the installation of meters so that staff can not determine when a replacement is needed. The city currently has 77,741 meters in the ground today. Of those, only 15,187 meters have documented install dates, with 26 percent of those meters approaching or past useful life.
The utility division’s failure to review and appropriately redistribute the number of meters assigned was also attributed to inconsistent meter reading workloads for employees. Some coverage assignments were found to contain less than 100 meters, while others contained more than 1,900.
Insufficient staffing was also cited as an issue in the report, resulting in meter readers acquiring about 1,500 overtime hours and more than $30,000 in overtime pay from 2015 through 2016.
The assessment included a total of 21 recommendations for how to address the issues, including improved communications, customer service and training.
The utility division also recommended charging an application fee for new accounts, transfers and service reconnections to help create new revenue streams that could help offset potential revenue declines and provide revenue for utility infrastructure, personnel, and strategic initiatives.
City staffers are in agreement with a majority of the recommendations, although some of them can be implemented much more quickly than others, Duffy said.
“We heard the frustration in the community and we really wanted to make an effort to show we heard them, we were going to look into this and restore confidence in the system,” she said.
One costly long-term recommendation included the replacement of the city’s meters with advanced meters that can be read remotely. Once those meters are installed, the firm said the city may want to consider moving from a bimonthly to a monthly billing cycle.
The Savannah City Council is scheduled to hear a presentation from KPMG regarding the utility audit during a workshop Thursday morning, before the regular meeting.