POWAY, CA — The Poway City Council may order a comprehensive audit of the city’s real estate contracts and billing practices, after two billing errors went unnoticed for several years, potentially costing the city nearly $900,000. Councilman Jim Cunningham called for the review, citing two incidents that have made headlines in recent months. In the first case, the city billed Pomerado Hospital for only 10 percent its water use between 2008 and 2014 — a shortfall of roughly $800,000. In the second, the city failed to calculate a scheduled increase in lease payments from Sportsplex USA from 2010 to 2015, costing Poway roughly $90,000. The city is trying to recoup some of its money from both parties, but the hospital and Sportsplex are challenging those efforts, and the law may limit what Poway can collect. City Manager Dan Singer learned about the water-billing error last summer and the Sportsplex error in March, but waited for months to notify the council. Cunningham said Friday when the Great Recession hit in 2008, the city cut its workforce from about 270 employees to roughly 190. He said he’s now worried that the details in city contracts slipped through the cracks because of the loss of manpower. “I don’t know what’s out there so that’s why I’m requesting the audit. We don’t have anybody assigned like we did in the old days to look at every real estate contract and monitor them,” Cunningham said. He has asked Singer to schedule a special meeting to discuss hiring an outside firm to conduct the audit, and to determine how to pay for it. Mayor Steve Vaus Friday said he expects an audit will take place. “There is no doubt in my mind we will be taking a close look at every contract,” he said. The Sportsplex lease calls for the company, which operates a large recreation complex on city-owned land in the Poway Business Park, to pay the city $4,000 a month, plus a portion of its gross revenues. In 2010, the percentage of revenues was supposed to have jumped from 7 percent to 8 percent, but the city never factored in the increase. The result: about $15,000 per year went uncollected. Making matters worse, some council members said, Singer failed to notify them about the problem and instead negotiated a deal with Sportsplex that called for the business to repay a portion of what was due, and put $10,000 of that toward the Tony Gwynn Memorial Fund. The council has repeatedly said the Gwynn memorial would be funded only through private donations. A closed-session council meeting was set for Friday evening to discuss Singer’s performance evaluation and possible contract renewal. This is the fifth time in the past few months the council has met behind closed doors to discuss Singer, without providing specific information about the status of his review. Normally such performance evaluations are routine matters requiring usually only two closed sessions. It is not expected that any action will be taken Friday night by the council.
The City of Yuma is moving forward with a lawsuit seeking restitution for water it says was stolen by Diamond Brooks, recently filing a document in court to adjust figures due to inaccurate readings on the meter used in the investigation. According to an April 7 filing in Yuma County Superior Court by the City of Yuma Attorney’s Office, the water meter was found to have an approximate 341 percent calibration error and it was disclosing the information to all parties as was required by law. City of Yuma spokesperson Dave Nash said while the error in the meter’s calibration has caused the city to adjust its figures, what it doesn’t change is that Diamond Brooks had an unauthorized connection to a fire suppression line and took water without paying for it. In November 2010, Yuma police began an investigation into the business, located at 3025 S. Avenue 4E, after receiving reports that the company had been stealing water, which it would then process and sell back to the public. It was initially thought that approximately 76.5 million gallons, which equates to a loss of over $168,000, were stolen during the course of the investigation. Nash said that the City of Yuma actually caught the error. He said that the water meter had been placed into evidence in the federal criminal trial against Diamond Brooks owner Philip Clark and that the City was able to retrieve it and have it tested by an independent engineering laboratory. Nash explained that the fire suppression line leading into the Diamond Brooks facility had a lower flow rate than a residential water line, which the water meter had been calibrated for, so when one gallon of water passed through the unauthorized connection fire suppression line, the meter recorded approximately 3.27 gallons. After the calibration error was discovered and the error factor determined, Nash said the City adjusted its figures in the lawsuit accordingly. Based on the new figures, Diamond Brooks allegedly took about 23 million gallons of water through the unauthorized connection to the fire suppression line instead of the 76.5 million gallons originally recorded on the meter during the course of the investigation. Those 22.9 million gallons, Nash said, would amount to $47,343.00 in unpaid water usage. He also said that there is evidence that Diamond Brooks was taking water for 33 months, not just the 19 months that were monitored. Clark, the owner of Yuma’s Diamond Brooks Water Company, who recently entered into a plea agreement with federal prosecutors, is scheduled to be sentenced at 9:30 a.m. on May 12 in U.S. District Court in Phoenix. He had been charged with 18 counts of wire fraud, three counts of stolen property, five counts of money laundering, 12 counts of failure to pay taxes, eight counts of failure to file tax forms, and one count of making false statements. The charges stem from allegations that he failed to pay IRS taxes he collected from his employees, and did not file corporate and individual tax returns for several years. Clark, who remains out of custody while he awaits sentencing, could receive up to five years in prison or a fine of up to $10,000, or both. Probation is also available, and if he is sentenced to probation, the term can be for no more than five years. According to his admission statement contained in the plea agreement, Clark admitted that between Jan. 1, 2001, and Dec. 31, 2009, he failed to pay the IRS $297,234 that he collected from his employees for certain employment-related taxes. He also admits that on Sept. 30, 2011, he failed to pay the IRS more than $31,296 in taxes that had been withheld from employee paychecks.
Four Pittsburgh City Council members scolded the Pittsburgh Water and Sewer Authority on Monday for ongoing customer service and billing issues — including in some cases thousands of dollars in incorrect charges and bills that fail to arrive — that have outraged constituents and monopolized their staffs’ time. Natalia Rudiak noted that her office still receives two to six PWSA-related complaints weekly, sometimes requiring several hours of attention. “It’s an inappropriate use of city taxpayer dollars to help navigate something that is an independent entity and not our responsibility,” she said. “We are simply relaying the anger that our constituency is relaying to us.” Interim Executive Director David Donahoe said a rushed “marriage” of a new billing system and new meter-interface units that use wireless technology to relay usage information caused incorrect billing, overwhelming customer service staff. PWSA’s board promised resources to right the issues, he said, adding that he has told employees that customers must be treated fairly. Its 111,000 customers receive water and sewer services, sewage removal or are municipal entities. “In short, we have, in all three cases, established the right people as far as I can tell, working on the right solutions. The PWSA does not want our customers to spend time on these issues. … So our goal is to get this marriage working as soon as we can possibly do that,”said Mr. Donahoe. He was named interim executive director March 3 after Jim Good abruptly resigned. Paul Leger, city Finance Department director and PWSA treasurer, said incorrect residential bills have decreased from 50 percent to about 3 percent, just above the industry standard of 2 percent. Councilwoman Deb Gross, who also sits on the PWSA board, said of the ongoing issues and 50,000 incorrect bills: “City council was not crazy. Our constituency was not crazy. There was a systematic problem, and that’s something we can take away from today: affirmation, and that you are working on it.”
Some Kirkwood residents are getting a shock when they open their sewer bills this month. The Metropolitan St. Louis Sewer District is charging a one-time fee to correct a billing error, jacking up bills several hundred dollars in some cases. Shonda Scott’s bill jumped up more than $400. “I was given a little notice from our neighbors,” said Scott, whose neighbors saw increases of $100- $200. “My blood pressure didn’t shoot up as high as it could have possibly been.” According to MSD spokesperson Lance LeComb, Scott and her neighbors are outliers, with the average customer owing the utility $6.50. “We’re certainly always very flexible in setting payment plans and we will work with those folks,” said LeComb. “But the bottom line is we did make a mistake, but we are billing for services that were rendered and delivered.” LeComb said letters warning customers of the fee were sent out last week to 6,500 Kirkwood residents and 800 businesses. For the past eight months those customers were under-billed due to a conversion error introduced by MSD when the city of Kirkwood put in new water meters. The meters measure water usage in gallons, while MSD measures water usage in one hundred cubic feet. Because MSD bills are based on water usage, Scott said she is confused that her bill is so much higher than her neighbors. “Our kids are moving out, we’re kind of empty nesting. And we don’t have a pool, we don’t have an irrigation system,” said Scott. “So I was surprised that ours is $400 higher compared to the $100 and $200 higher that our neighbors are experiencing.”
GRANDVILLE, Mich. — A Grandville business owner’s massive Consumers Energy bill was dropped after he mentioned that he called the FOX 17 Problem Solvers and complained to the state. Ronald Hite runs C&R Mobile Wash, a power washing business in Grandville. He’s only had the business for a month, and says he risked it all to start it. “All my savings…and I actually had an aunt help with all the investments,” he said. Hite said a bill like the one he received from Consumers would have basically ruined his new business. “I went to the owner that owns this building and showed him the bill. And they have six of these buildings and they have never seen a bill get this high,” he said. “Like the highest bill $200, $250 a month depending on how much they use on electricity.” His bill for a 29 day billing period was $13,628.79. He called Consumers Energy, believing it was all just a big mistake. He says he was told the smart meters don’t lie. Consumers has told FOX 17 on numerous occasions that the estimated high bills from old analog meters would be solved by the installation of smart meters, but Hite had a smart meter, and this is the largest bill FOX 17 has seen from a viewer. Consumers Energy had a change of heart when Hite mentioned the Problem Solvers. “Within 24 hours I got a call saying it was a clerical error,” Hite said. Hite’s bill was dropped to about $39.
When a company reports its quarterly earnings, management often presents just a sketch of how the company performed. But equally important for investors is the conference call — where management’s commentary colors in the sketch, providing the full picture of the company’s recent performance. Let’s look at some of management’s more notable comments from American Water Works’ (NYSE:AWK) most recent call to help discern the full picture for Q4 2015. Staying on target Operating as efficiently as possible is the hope of any good company, but it’s especially important for a company like American Water Works — a company that can’t merely raise rates when it desires. Instead, the company must seek regulatory approval for rate increases; consequently, streamlining its operations is crucial — squeezing out every bit of value that it can from the top line. Management gauges success in this through the O&M efficiency ratio metric — a measure of its operations and maintenance expense in its regulated business segment against its regulated business revenue. The company has consistently been improving on this metric since 2010. Reporting an O&M efficiency ratio of 44.2% in 2010, the company improved that figure to 35.9% for 2015. Management is quite proud of its accomplishment and affirmed its forecast that it will achieve its 34% target by 2020. During the conference call, the company’s COO, Walter Lynch, stated, “I know, we’ve talked a lot about this, most recently, at our Investor Day in December, but I think it’s worth repeating: We’ve really made tremendous progress here.” And though management didn’t state it specifically, the improved O&M efficiency has surely contributed to the company’s earnings growth; management reported diluted EPS of $2.64 for FY 2015, a gain of more than 10% over the $2.39 it reported in FY 2014. Metering for cautious optimism Although management is reluctant to comment on its O&M efficiency ratio expectations post-2020, it’s reasonable to suspect that it has high ambitions. During the question-and-answer session of the call, Richard Verdi, an analyst from Landenburg Thalmann, noted that American Water, a few years ago, had a target of 35% for 2018 — 100 basis points higher than the 34% target for 2020 — and probed to see how likely it was that American Water reduces the ratio to around 33% by 2022. He further pointed to automation and technology as a force behind the reduction. Walter Lynch didn’t take the bait, but his reply was telling nonetheless: “We’re not going to forecast beyond 2020 and 34%, but I can tell you our teams are geared toward continuous improvement, and that’s what’s driving this, and technology is going to be a big part of it.” Further elaborating on this point, Lynch credited the company’s 90% implementation of automatic meter reading and its transition to advanced metering infrastructure as driving factors. These moves, as well as others — such as the recently announced collaboration with General Electric to explore the Industrial Internet of Things applications for the water industry — suggest that the 34% target may soon fall victim to a more aggressive target, which, should it happen, would also suggest a more robust EPS forecast revision.
Southern California Gas Co.’s plan to fully deploy a network of upgraded gas meters faces hurdles in some parts of Orange County as local officials assert they have the authority to approve where pole-mounted wireless transmitting units should go and how they should look, the Register has learned. Municipalities including Laguna Beach and Newport Beach have been involved in lengthy talks with SoCalGas over the setup of poles and antennas that collect data from “advanced” meters at homes and most businesses and send the data to the gas company. Cities across Southern California are in various stages of shifting to the advanced meter networks, which eventually are expected to eliminate the need for human meter readers. SoCalGas is still in the process of obtaining permits to install network units in Laguna Beach and Newport Beach. Buena Park has had the technology since late 2012. The network also has been set up in Irvine, but some recent installations were needed to fill gaps in the coverage. The systems in Seal Beach and Huntington Beach are works in progress. The local permitting challenges are the latest bump to emerge in the gas company’s massive effort to upgrade millions of old analog meters and phase out the process of sending workers through neighborhoods to read the units manually. Over the last six years, SoCalGas personnel assigned to meter reading have been reduced from more than 1,000 to about 70, company figures show.