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San Diego Water Department Sent 2,750 Incorrect Bills In 2017, Audit Found

A water meter at Erie Drive in Clairemont is shown, March 9, 2018.
Claire Trageser
A water meter at Erie Drive in Clairemont is shown, March 9, 2018.

An audit released Thursday of San Diego's Public Utilities Department prompted by reports of sky-high water bills found that last year 2,750 water bills had to be changed after customers received them. That's out of 1.3 million customers billed.

The audit also found that almost 19,000 water meter reads were corrected last year before the bills were even sent to customers. That's about 1.4 percent of water customers.

About 1.6 percent of water customers saw bills that doubled or more than doubled from the previous billing cycle in 2017, according to the audit. But some of those bills were due to an actual increase in water use, a longer billing cycle and increased water rates.

San Diego Water Department Sent 2,750 Incorrect Bills In 2017, Audit Found

RELATED: San Diego Officials Looking To Solve Mystery Of High Water Bills

After reports in the media of high water bills and calls to city council members complaining of similar issues, Councilwoman Barbara Bry in February asked the Office of the City Auditor to look into the department's billing practices.

In a written response, the Public Utilities Department said it would make changes recommended by the audit and would come up with a plan to track customer complaints by October.

While the audit was finished Tuesday, the Public Utilities Department asked for additional time to prepare a response, according to city spokeswoman Katie Keach.

In response to the audit, Mayor Kevin Faulconer asked the Public Utilities Department to make several changes by January, including overhauling programs that analyze the number of water meter misreads, estimated bills and customer call volume to flag errors before a bill is sent to a customer, boosting supervisors' reviews of employees and accelerating the use of smart water meters.

"Our customers must be able to trust when they receive their bill that it accurately reflects how much water they use, no more and no less," he said.

"We have to change the culture of this department in order to consistently deliver the excellent service that San Diegans expect," he added. "I have directed staff to immediately begin reforming water operations by implementing the recommended changes and rebuild the trust that has been lost.”

In addition to this audit, an additional audit from an outside firm looked at reasons behind the high bills. Faulconer also said he was asking the Deputy Chief Operating Officer for Infrastructure and Public Works to do a third-party examination of the Public Utilities Department’s management structure, internal controls, processes and protocols, and employee oversight. The city’s Performance & Analytics Department is also conducting an analysis of billing data.

Human Error Likely Cause

The audit found the most common reason for billing errors were human error and estimating water meter reads instead of actually reading water meters.

Human error was likely caused by mistakes when entering a water meter's amount into a handheld device. According to the audit, the device is supposed to lock after three unsuccessful attempts to enter different meter read values, and once a device is locked only a supervisor can unlock it. However, the audit found through interviews with employees that some know a workaround to bypass the need for a supervisor to unlock the device.

When reports of high bills first gained media attention earlier this year, the Public Utilities Department blamed one employee for entering bad water meter reads and said that employee no longer works for the city. The audit found that employee made 625 of the reads on the 2,750 bills that had to be corrected.

But that does not account for all the incorrect bills. The audit found that in 2017, 10 water meter readers accounted for more than 70 percent of the bills that had to be corrected after the bills were already sent out.

"While (the Public Utilities Department) only identified one meter reader, the controls may have been circumvented by other meter readers as well," the audit states.

Estimated Meter Reads Also A Problem

The audit found that sometimes, water meter readers can't view a water meter, either because it is broken, scratched, inaccessible or too difficult to locate. When that happens, the meter reader skips the read and instead enters a trouble code into his or her handheld device, which then causes the billing system to estimate the water meter amount.

Those estimates could also contribute to the water billing issues, according to the audit.

The report also said that when a water meter reader enters a trouble code, it is meant to flag the water meter as needing repair. But that doesn't always happen. Some department employees told the auditor's office that supervisors told them not to enter trouble codes for broken meters "due to a backlog of duplicate service requests."

RELATED: How To Check Your Own Water Meter

Smart Water Meters Not To Blame

The city is slowly switching to smart water meters that could be read remotely without sending a person to look at the meter and enter the amount on a handheld device.

The audit found that these new smart meters accounted for about 2 percent of the readings that were flagged for additional review in 2017, compared to 7 percent that were done using the old human-based method.

Audit Recommends Improved Customer Communication

The audit also found that a longer billing cycle and increased water rates lead to some of the bill increases, but stated that the Public Utilities Department did not do a good job communicating these changes to its customers.

It also found that calls to the department skyrocketed at the beginning of 2018 when reports of high water bills were covered in the local media and that in February 2018, 23 percent of those calls were abandoned because it took too long for someone to come to the phone.

The audit found that some people who did reach an employee never received a resolution to their issue, never received a call back, or "were given reasons that placed the blame on the customer."

Recommendations For Change

The audit made 10 recommendations for change within the Public Utilities Department. Those include regularly checking their system for identifying billing problems, creating employee performance metrics and finding ways to reduce errors, requiring meter readers to enter a trouble code every time there's an issue with a meter and improve supervision of water meter readers' accuracy.

City Auditor Eduardo Luna said the audit was "one of the most important audits my office has conducted because residents expect and deserve that the water bills they receive are accurate and reflect actual water consumption."

"The percentage of inaccurate readings that pass through the PUD billing system is low," he added. "To regain the public trust, (Public Utilities Department) executives will need to strengthen their oversight of the meter readers."

Customers with questions or concerns about their water bills can contact the city at 619-515-3500 or customercare@sandiego.gov.

San Diego Water Department Sent 2,750 Incorrect Bills In 2017, Audit Found
San Diego Water Department Sent 2,750 Incorrect Bills In 2017, Audit Found GUEST: Eduardo Luna, city auditor, city of San Diego

Our top story on Midday edition. Almost 3000 San Diego water bills have to be changed last year. And now the city says it knows why. An audit of the Public Utilities Department found that two thousand seven hundred fifty water bills were changed after customer complaints. Those customers crowded into public hearings earlier this year to demand answers. Now the city auditor is out with an explanation and recommendations to prevent it from happening again. Joining me is Eduardo Luna auditor of the city of San Diego and Eduardo. Welcome to the program. Thank you for having me here. The most common reason cited for the overcharging is human error. How did that happen. The system that we have Donnelly relies on human persons. Meter reader to go out and physically in the field and read meters it's a physically demanding job. There's a lot of meters they have to read each day and you're entering codes you have very few seconds to go to each house and enter the codes. It's easy to some cases make mistakes but given the total number of bills in meters that were read last year one point three million. It's very very low percentage. One in five hundred. One of the things that you found during the audit is that some meter readers were able to bypass an accuracy check. What was that about each meter reader has a handheld device in that device Thiers controls that are embedded to prevent Iran from occurring. What we have found is that some of the meter readers had access to a code that allowed them to override when they had inserted incorrect information. Why would they do that. The procedure would require the supervisor to come in to the field where they were at. It was a lot easier for them themselves to override the control to share passwords so to speak or share the trouble codes. There was one meter reader who entered hundreds of incorrect reads and apparently 10 water meter readers who were responsible for 70 percent of the errors. And I'm wondering why weren't those mistakes caught before the bills went out. You know the majority of the rebuilding that were done or the checks that were done were caught before some cases some do slip through the cracks so to speak in terms of just given the sheer volume of implausible reads and reviews that are taking place each day. So it seems odd that so many errors should pop up in one year. Did you find any reason for that in terms of the air raid entries. We didn't really go back and compare to the year to previous years but from our perspective we looked out the totality of the total number of bills that were issued. You know you're Shien one point three million bills and the actual number of errors that went out Bill was incorrect because it went out to customers as 27 50. It's a really low percentage you know and I think the problem the city has is you know residents are expecting accurate bills each and every time it hits very important terms of establishing trust to get those bills correct. Now there was speculation that the introduction of so-called smart meters might be the cause of the overcharging. Those are smart readers they read on the Internet. There's no a meter reader that has to go out and actually look at the meter. What did you find. What were the smart meters involved in the overcharging. We found that the smart meters were actually fairly accurate in the readings we are doing a comprehensive audit of the implementation of the smart meters. Hopefully we'll be able to complete that audit the next couple of months and really get complete answers with regards to the accuracy and the implementation and rollout of the smart meters. Now your report also talks about the effect of water rate hikes on what customers see on their bills. Were some of the customer complaints explained simply by the price of water going up. That was one of the factors that we looked at. You know rates did go up. I mean there is a tiered pricing and then you had in December next billing cycle which is normally 60 days extended to 70 days. And that's where we found that the department could have done a better job of communicating to customers that hey we're going to extend the billing cycle next for 10 days. Rates are going up so there was a surprise for a lot of customers myself included. So along with the audit you've issued some recommendations to the public utilities department and they've agreed to them. What are some of those key recommendations. There's a series of recommendations that we're making for them to improve their oversight over the meter readers. You wanna ensure that you develop some metrics to assess your performance to determine you know what the average time is to complete the routes the number of errors that are being occur to be able to really review their performance on an ongoing basis and strengthen the controls to prevent the override of controls that had incurred and any more. Now there's several drum you know improving customer service to really strengthening their outreach in terms of ensuring that the bills are accurate and I think the series a record reasons that we're making are going to go a long way to improving how meters were read in the city. Until you do have a point in the future where you do have smart meters. But in the short term I think there's a lot of work. The department has to do. And I think they're committed to doing so. Who's charged with monitoring to see if the Public Utilities Department does indeed kind of straighten up its act in regard to the accuracy of water bills on the day to day level you have the director of the department and you have a deputy chief operating officer who oversees that director. You also more importantly we are presenting the results of this audit to the audit committee on Monday and then later next week to the environment committee so you have counsel who will be also overseeing the implementation of these reviews and I know that audit committee chair Lauries have called for ongoing reporting of the progress of implementing these recommendations on a regular basis to the audit committee so there'll be some oversight as you mentioned this inaccuracy in the water bill is it only affected a rather small percentage of the total of people who get water bills in San Diego. But those people were quite upset about it. They filled public hearings and made a lot of complaints. Why do you have to say to those people after conducting this audit. You know it comes down to the fundamental issue of trust. I mean people expect that when the RBA her water bill that it's going to be accurate they're going to be charged for the water used and I think it's one of the most basic tenants that we have between the city in our residence that you know we should be able to provide them with an accurate water bill and I think importantly what you heard yesterday she had the mayor you know committing to reforms and making improvements and I think they're well aware of the importance of being accurate because it's fundamental to trusting our government. And I think this audit there was independent. It goes a long way to improving that trust. I've been speaking with San Diego City Auditor Eduardo Luna. Thank you. Thank you.

San Diego Water Department Sent 2,750 Incorrect Bills In 2017, Audit Found
An audit released Thursday of San Diego's Public Utilities Department prompted by reports of sky-high water bills found that last year 2,750 water bills had to be corrected after customers received them. That's out of 1.3 million customers billed.

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