Baltimore City and Baltimore County have lost millions of dollars in water and sewer revenue due to a dysfunctional system despite spending more than $133 million in the last decade to fix ongoing problems, according to a report Monday by the city and county inspectors general.
The document is the culmination of a nearly nine-month investigation into the system, which the city runs.
It highlights two significant findings: Tens of thousands of digital water meters in both the city and county are not fully functional, and more than 8,000 open “tickets” about problems with county water accounts have not been resolved by the city. Those account for 74% of the tickets opened since December 2017, the investigation found.
“The OIGs determined a fundamental lack of communication between the city and the county is central to the problems that have been plaguing the water billing system for years,” wrote Baltimore City Inspector General Isabel Mercedes Cumming and Baltimore County Inspector General Kelly Madigan.
The pair recommended a more coordinated approach.
Mayor Brandon Scott and County Executive Johnny Olszewski Jr., both Democrats, held a joint news conference Monday with Cumming and Madigan. Both leaders pledged better cooperation to address problems with the system, which the pair noted dates to before they were born.
“Government works best when we’re responsive to our constituents and communicate with one another,” Olszewski said. “Unfortunately, for too long, that has not been the case between our two jurisdictions.”
“We will fix this system,” Scott said. “This is a top priority.”
The city Department of Public Works has long been plagued by water billing system problems. In 2012, for example, a city audit of billing errors found the department overcharged thousands of customers by at least $9 million combined. More issues have emerged in the years since. In 2019, it was revealed the city had not billed the Ritz-Carlton Residences in the Inner Harbor for $2.3 million in water used since 2007. The city law department still is working to resolve that matter.
According to the report by the inspectors general, more than 22,000 of the digital water meters installed beginning in 2014 in the city and the county have “some type of operational issue.” Many are producing readings that say no water has been used at a location, costing the city and the county what is estimated to be millions of dollars in lost revenue, the report states.
In addition, the malfunctioning meters cut the county’s reimbursements to the city for the cost of providing water. Based on a 1970s agreement, the total annual usage of water by county customers is used to calculate how much the county owes the city.
The report found that the majority of the new digital meters provide incorrect readings because of problems with electronic transmitters. Specifically, wires connecting the transmitters have come loose, become corroded or disconnected. Other transmissions are interrupted because some transmitters fell into the vaults where they’re housed due to faulty clips. In other cases, data from transmitters is blocked by the vaults’ cast iron lids, which were to be replaced as part of the digital installation.
The report also found significant problems with the system the jurisdictions use to address complaints when faulty meter readings are found. If a complaint is made by a customer or an issue is found by the city or county, a ticket is generated. It’s supposed to be manually reviewed by an employee of Baltimore’s customer support and services division, part of the city public works department. Once the ticket has been resolved, it is supposed to be closed.
However, the majority of the 11,747 tickets created since December 2017 remain open, the investigation found. About 8,650 tickets were open as of Nov. 29. Of those, 8,195 had been open for more than a year. Some had been open for almost three years.
Of the tickets issued during that window, most were for meters issuing readings of zero use of water, the report states.
“These open tickets are a form of waste in that they directly translate into millions of dollars in unbilled or underbilled water and sewer fees,” the report said.
The city’s acting director of public works, Matthew Garbark, was unaware of the open tickets until they were brought to his attention by the investigation, the report states.
In a written response to the report, Daniel Ramos, the city’s deputy chief administrative officer, said the city and county have begun holding meetings between senior-level staff to coordinate on water-related issues.
He also said the two governments have hired a vendor to study communication, staffing and governance issues in the water and wastewater utilities. The county’s written response said the review by New Gen Strategies and Solutions will be finished by Dec. 31.
The report laid bare issues that prompted Baltimore’s Water Accountability and Equity Act and underscored the need to see it implemented on its current timetable, said Rianna Eckel, senior organizer at the advocacy group Food and Water Watch.
”While [the report] is of course horrifying and deeply disappointing, a lot of it is not surprising,” Eckel said.
Eckel said the act, passed by City Council in 2019, addresses one of the most glaring issues highlighted in the report: customer service. She said the legislation outlines a timeline for public works employees to respond to citizens and new avenues for people to dispute their bills. It’s slated to be implemented by the end of summer and Eckel said it’s critical for Scott’s administration to honor that deadline.
Democratic City Council President Nick Mosby said he was “exasperated” by the report’s findings.
“The council will use legislative oversight to force accountability in billing and drive the responsible investment of our finite tax dollars,” Mosby said.
Republican County Councilman David Marks called the report just the latest example of a “confusing and often archaic” system that prompts his constituents to reach out to him more than any other issue.
He said it was time for state lawmakers to create a regional system to oversee water and sewer.
”Issues like this demonstrate that we need a comprehensive regional water authority,” Marks said.
Asked at the news conference about that approach, Scott and Olszewski said they would look at all options for improving the system.
“Of course, I do not want to divest the city’s assets and take strength away from the city, but we have to look at everything,” Scott said.
The report also highlighted a repeated problem involving bypass valves. The valves, which are built into the system to avoid shutting off service to larger customers during maintenance, have been mistakenly left on at some sites of newly developed properties. In one such incident at Stone Cliff, a development near Quarry Lake in Baltimore County, a meter was installed in 2005. The county did not discover the bypass was on until August 2019, revealing $386,000 in lost revenue, the report states.
Meanwhile, the city has cut staffing in the customer support and services division, the report noted. The majority of employees in its meter shop, who manually read and service meters, have been on paid leave since March due to COVID-19.
In October, then-Democratic Mayor Bernard C. “Jack” Young announced a plan to lay off the more than 60 meter shop employees and outsource their work to a contractor, Itron Inc. However, the city has not yet signed a contract with the company for that work. The county signed an emergency contract with the firm to read meters until April.
Cumming said Monday that meter shop employees remain on the city payroll. All but 18 are still on paid leave. Asked about the situation, Scott said the city was reviewing Young’s action and talking with the workers’ union.
The report noted the city and county have entered into dozens of contracts since 2011 aimed at improving the system. The inspectors general did not question the work of those contractors, but highlighted as an example of waste the city’s lack of response to a $420,000 contract the county awarded in 2018 to advisory firm Baker Tilly Virchow Krause to perform a comprehensive review of the system.
The review noted several weaknesses of the system, and the county shared it with the city’s then-head of public works. That official never responded to the review, however, so the firm never finalized its work.
“This $420,000 is yet another form of waste,” the report states.
Olszewski said county officials eagerly await the results of the New Gen Strategies and Solutions review. That study cost the county $845,000.
Cumming and Madigan questioned whether the review would mirror the Baker Tilly findings.
“I’m tired of consultants,” Cumming said. “Let’s just fix this.”
Sen. Cory McCray, co-chair of the Baltimore City delegation to the General Assembly, said the report represents an opportunity for Scott’s administration to address an “inept” system and its billing issues that have “been plaguing us for the past several years.”
McCray, a Democrat, said citizens have lost trust in the system and the government at large, and that fixing this problem will go a long way toward rebuilding trust. He wouldn’t specify whether his delegation would consider a regional water authority, but said he wants constituents to know he’s keeping an open mind.
“Everything is on the table and we have to look at every tool in the toolbox,” McCray said.