Audit Finds Thousands of Bad Water Bills, Hints at Other Problems

San Diego’s water department sent out at least 2,750 incorrect bills last year, according to an audit of the department released Thursday.

But city auditors, who were asked to get to the bottom of the water department’s billing problems, said the department is, by and large, doing a good job.

Auditors blamed most of the billing problems they found on 36 or so city employees responsible for reading the city’s quarter million water meters every two months. About 1,970 of the bad bills were blamed on just 10 city employees.

The audit – which is one of several being done of the water department – may do little to end questions about the water department’s credibility. That’s because, even though auditors brushed aside concerns of systemic billing problems, their findings hint at other problems.

Auditors, for instance, found issues with the city’s $60 million “smart meter” program but don’t go into them. They may get to those problems in another future audit.

It found those issues were not a large factor in the billing errors, but it did find that some of the new meters were causing problems. The meters are supposed to improve meter accuracy, provide real-time data on water use and eliminate the need for human meter readers, but San Diego and other cities appear to be having problems with them. The auditors’ findings don’t explore whether using more smart meters – as the city plans to do – might cause more problems or be a waste of ratepayer money. The whole point of smart meters, after all, is to automate a process rather than complicate it further.

Instead, the auditors merely said, “We should note that similar issues will likely continue as [the water department] moves forward with implementation of its [smart meter] program. To that end, [the department] should ensure that these issues are continuously monitored and quickly resolved to reduce billing impacts to customers.”

There are other problems the auditors couldn’t fully explore. For instance, when auditors asked for records that would show how well water department supervisors were monitoring the quality of meter readings, the water department said it could not find the records.

Likewise, auditors found problems with a new computer system the department is using.

The audit also doesn’t touch on efforts by top water department officials to dodge oversight and withhold information about problems, though it says the department could do more to communicate problems that affect customers’ bills.

Auditors found that about 21,000 bills doubled or more than doubled from one billing cycle to the next, a finding that lines up with a Voice of San Diego and NBC 7 Responds analysis that bill spikes are widespread. But just because a bill spiked doesn’t mean it’s wrong. The water department argued a confluence of justifiable factors can explain many spikes: rising water rates, increased water use coming out of a drought, leaks, filling pools and hosting visitors. Also, customers with newly installed water meters could see their bills spike because older meters may have been undercounting use, essentially giving people free water. The auditors seemed to agree.

Auditors decided to review 455 meters that showed big spikes. From that sample, auditors concluded that the water department “appears to identify and correct most meter reading and billing error” so well that “a relatively small number of errors likely go unnoticed and uncorrected.” For instance, the department flagged over 57,000 potentially erroneous meter readings and corrected early 19,000 errors before customers received a bad bill.

The auditor largely blames city employees who go out and read water meters for any bad bills that customers end up receiving. Some of those employees – known as meter readers – have been a problem for the department for over a decade. The audit says that in 2003 it released a “confidential audit” that showed employees were falsifying overtime payments. At least two of the employees identified in that audit are still working for the department, auditors said.

Earlier this year, city blamed about 350 bad bills on a single meter reader who was making up readings. Auditors found that other employees have recently been bypassing a system meant to make sure they were accurately reading meters.