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Oct 12 - City Manager: “We’ve got to get our house in order” before the City can move to new Water Meter Reading technology

Category: Local Govts & Politics

By Lou Phelps, Savannah Business Journal

October 12, 2017 – Savannah City Council heard the results of an operational audit conducted by KPMG’s Atlanta office, retained back on April 27, to review the City of Savannah’s Utility Services Dept. (USD) which melted down in late 2015 and 2016 after installing a new billing software system that the staff was not prepared to operate.

KPMG’s 108-page report includes 21 key issues found that still exist in the USD, including the meter reading process. And, there are 21 recommendations to be implemented, explained David Roberts, Managing Director of the Atlanta Office for KPMG, the partner on the project. 

And while he urged increased transparency with the public and the City Council on issues and improvements being achieved moving forward, there was no public discussion today on how much money the City has lost to date, or how large or how old the water department’s Accounts Receivable is – money that will be difficult to collect.

The KPMG Executive Summary begins, "As a result of both internal and external factors discussed throughout this report, the Utility Services Division (USD) encountered a series of operational and technical issues over the past years, limiting its ability to consistently provide effective and efficient metering reading, billing, and customer service. Outputs from the City of Savannah’s (the City) operations resulted in billing delays, inaccurate customer bills, meter reading inaccuracies, and declining customer service levels."  

The water system is what is termed an 'Enterprise Account' that is designed to be self-sustaining, generating enough revenue to help pay for improvements needed to the water delivery system. Therefore, the millions potentially lost do not impact the city's operating budget, but the loss can require increased capital funds, bonding or borrowing as the water system ages, and there are not funds to pay for the capital needs. 

With a significant level of residential rental properties in Savannah, including student rentals, former residents who did not pay their water bill and then leave the area, mean that it’s important to have a timely billing and collection process. 

Think your water bill has been wrong, KPMG states, "USD should develop a formalized and coordinated meter change-out program to address the more than 26% of meters either approaching or past their useful life. The USD should prioritize proactively replacing oldest meters first to guarantee customers are receiving the most accurate meter data. The City should also remove all abandoned (non-operable) meters from meter boxes to help prevent confusion during meter readings. In addition, the USD should prioritize cleaning up and improving meter data as evidenced by the fact that 80% of meters do not have “install dates” and ensure meter install dates are properly documented to regulate useful life." 

The City is currently only billing every two months, and in 2016, only managed to get out five bills versus six, due to the backlog in meter reading. Only 30% of the city’s properties have what are termed “AMR” technology that allows a city employee to drive by a property and get the meter reading using a radio signal. Without that, a meter reader must go and look at each meter to get the reading, submit that information, that then goes into a billing cycle. 

The City may only be able to get out five bills in 2017, as well, though “that decision has not been made yet,” according to Interim Revenue Director Keith Lloyd. The speed of meter reading is impacted by hurricanes, lighting and thunder, etc, he told the Council, when questioned by Alderman Julian Miller about the KPMG 108-page report the Council had been sent last Sunday. He appeared to have been the only member of the Council who had read the report, which was not available to them at the Work Session. 

KPMG was hired to assess the City’s water and billing system and meter-reading processes. 

City Manager Rob Hernandez said that Savannah was as much as two years away from being able to send out monthly water bills, due to the need to increase staff, and improve meter-reading technology. There are two approaches the city could take, and one of the next steps is to do a financial assessment of whether to expand the AMR system, or invest in what is termed “AMI” meter technology, similar to what is used by Georgia Power. AMI systems send the usage data to central software, powered by solar technology.

Alderman Brian Foster stated that he understood that there were vendor who would implement a system similar to that used by Georgia Power, at no cost to the City. But, Hernandez replied, " We’ve got to get our house in order before we can even contemplate going to AMI."  

KPMG’s report also includes an analysis of what went wrong when the City moved to the new billing system in 2015. In short, the City’s staff was not adequately trained on the system, and there was a significant lack of understanding about the manpower needed to implement the changes. 

There have also been prior discussions that the software purchased by the City Council, recommended by the prior City Manager Stephanie Cutter was a ‘beta system’ and Savannah “was the guinea pig,” a charge pointed out today by Alderman Brian Foster. 

KPMG recommended that the City name someone as a Project Manager to insure that their 21 recommendations are implemented. Hernandez did not specifically comment on that recommendation. 

Roberts urged the Council to read the entire 108-page report. 

There was discussion about the significant problem with customer service, which Hernandez said was due to the use of temporary workers who “had not gone through the City’s customer service training.”

The recommendations address administration of the USD, customer account set up, meter reading, billing and collections. He said the City’s staff appeared to work well together, and has already begun to implement changes.

They also strongly recommended that all aspects of the water process “operate under one single leader” – meter reading, billing and collections – to strengthen communications. The USD areas also function separately from the actual delivery of water to property, including the leaks detection functions.

The City is currently looking at 3rd party vendors to focus on collection. 

Roberts said that there needs to be “Proper procedures to track complaints and calls as they come, to be able to look at what are the complaints that are coming in.” 

And, he pointed out the bills now going to customers lack water usage information, previously detailed on the prior bills issued to customers.   

Click here to view the full report »

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