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An ongoing audit of Baltimore’s water billing system has identified nearly 800 accounts or addresses that need to be investigated to determine if they are properly paying for water, including 240 locations that may never have been billed, according to a top city administrator.
“We’ve spent a lot of time doing the research to identify the right locations and the right accounts that we need to be investigating,” said Sheryl Goldstein, chief of operations for Democratic Mayor Bernard C. “Jack” Young. “We are committed to getting to the bottom of it and getting it fixed.”
Young ordered the audit in October, after discovering the city had failed for more than a decade to collect a total of $2.3 million for water from the Ritz Carlton Residences, a development of nearly 200 condominiums near Federal Hill. After the audit was announced, dozens of additional businesses contacted the city to report issues with their bills, officials have said.
In addition to the 240 locations that potentially never have received a bill, Goldstein said the city has identified 310 locations that have accounts but might not be getting properly billed, and another 215 that may have stopped getting billed properly or at all after the city switched to its automated UMAX billing system in 2016.
About 60% of the flagged accounts and locations are connected with commercial entities, with the rest being residential, Goldstein said.
Few of the flagged accounts have been fully investigated to date, she said, and many of those flagged — through reviews of property and billing records, developer agreements and other data — may in fact be getting billed correctly.
Goldstein said the city has confirmed four commercial entities that it’s never billed for water consumption, but she declined to identify those other than the Ritz. She also would not say how much those companies owe.
Officials hope to review all of the flagged accounts and complete the audit by May. They then would start sending back bills to accounts that were undercharged, Goldstein said.
“The sooner we can finish it and put it out there and start collecting the money, the better,” Goldstein said. “If I could wave a magic wand and fix all this right this very minute, I would. But this is complicated and it is going to take time to do the proper research and to make sure that these accounts are properly corrected.”
In addition, the audit has identified 300 accounts — half of them commercial — that have not been billed in over 18 months because of account disputes or other issues internally flagged by city officials, resulting in large or growing balances being reflected in the city’s online water billing portal. Goldstein said that is a distinct issue from accounts being improperly billed or never billed. She said the city is working with those account holders, including some of the city’s biggest businesses, to resolve whatever issues exist so users can resume payments and clear balances.
Goldstein said the city has 215,000 water billing accounts overall, such that the number of flagged accounts represents a tiny percentage of the overall figure. Those actually found to have problems will be an even smaller figure.
“I’m not minimizing it. We need to fix it. We need to get it right. But it is a small number of cases and accounts that are problematic or at issue," she said.
Goldstein said officials do not have an estimate for the amount of revenue the city has failed to collect, but does not expect the amount to have an impact on the bond rating or “overall financial health" of the water utility, which has suffered a slate of problems with its billing system going back years.
In 2012, The Baltimore Sun reported that the city had allowed big businesses and entities to run up delinquent accounts totaling more than $10 million, even as it took the homes of residents who had relatively small unpaid water bills. Then last year, the city couldn’t issue bills for months after a ransomware attack. Water rates have been raised repeatedly in recent years, to the consternation of some residents.
The City Council, which passed legislation last year that discounted water rates based on customers’ income and made it easier to dispute bills, is set to hold a hearing Wednesday on billing issues.
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Attorneys for the Ritz condominium owners said their clients had repeatedly asked the city’s Department of Public Works for water and sewage bills between 2009 and 2017, want to pay their fair share and are negotiating payment terms with the city. Attorney Rachel Hess said Monday that she did not have any update on the negotiations.
Goldstein said that while she generally could not discuss individual water customers’ accounts, she had permission from Johns Hopkins Hospital to discuss an effort to address problems there.
The hospital has dozens of individual water meters on its city campuses, and reached out to the city after the audit was announced to flag issues with 16 of them. Now, Hopkins and Department of Public Works officials are checking each of the meters to ensure they are giving proper readings, and that each is connected to the correct service address and the correct billing account, Goldstein said.
“At the end of that process, DPW and Hopkins will have confidence that the reads are matching up to the right accounts,” Goldstein said.
In a statement Monday, Hopkins said it reached out to the mayor’s office after noticing issues including “past water leaks, closed accounts and questions about billed amounts," and together they identified 39 meters on its Homewood and East Baltimore campuses that may have been “billed incorrectly.”
“We continue to work with DPW and hope to have the billing issues resolved and paid by the end of March,” it said.
For account holders who the audit determines have not been paying for water, the city law and finance departments are developing a policy for collecting on debt going back three years, Goldstein said. The city will offer payment plans and a dispute resolution process for anyone who wants to appeal a back bill, she said, with appeals going before an administrative judge with the Baltimore Environmental Control Board.