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Baltimore to outsource part of water billing operations after sustained ‘struggles'; employees to be laid off

Baltimore will outsource part of its water billing operation to a contractor after problems in the public works department have consistently left residents with inaccurate information. A bill for water to a rowhouse is shown in a 2017 photo.
Baltimore will outsource part of its water billing operation to a contractor after problems in the public works department have consistently left residents with inaccurate information. A bill for water to a rowhouse is shown in a 2017 photo. (Amy Davis / Baltimore Sun)

Baltimore will outsource key functions of its long-dysfunctional water billing operation to a contractor, Mayor Bernard C. “Jack” Young announced Wednesday, after years of problems in the public works department have consistently left residents and businesses in the dark about what they owe.

Itron Inc. will take over meter reading, small meter installation and maintenance in Baltimore City and Baltimore County, the Democratic mayor said in a statement.

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The Department of Public Works has long been plagued by problems related to its water billing system. In 2012, for example, a city audit of water-billing errors found the department overcharged thousands of customers by a total of at least $9 million. In the years since, more issues have emerged.

The mayor’s news release noted the department’s “struggles” continued despite the expensive installation of automated meters a few years ago.

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As it moves work to the vendor, the city will lay off more than 60 employees. It’s unclear whether officials will be able to find new jobs for them at a time when the coronavirus pandemic has already left thousands in the city unemployed.

“There really is no guarantee we’ll be able to find positions for folks,” said acting Department of Public Works Director Matthew Garbark.

Outsourcing the operations is intended to improve billing accuracy and timeliness, as well as reduce operational costs, city officials said. The change is expected to save about $50 million over the course of the five-year, $13 million contract with Itron, which is based near Spokane, Washington.

“There’s no way you can say ‘no’ to saving," that kind of money, said Young’s chief of staff, Kim Morton.

The anticipated cost savings come as Baltimore grapples with how to pay for sweeping legislation that would institute major changes in the water billing system, including providing discounted water rates based on a customer’s income and giving residents more rights to dispute erroneous bills. Morton said the money Baltimore saves via this contract will go toward paying for the Water Accountability and Equity Act.

Advocates who pushed for that bill say it is “fundamentally wrong” that the city says it must lay off workers to provide more affordable water service to residents.

Food & Water Action organizer Rianna Eckel said she is also frustrated that the public was not able to weigh in before the city announced a seemingly done deal with Itron. The contract was not debated publicly before Young sent out a news release on it Wednesday.

The Baltimore Board of Estimates will be asked to approve the deal in November, but Garbark said the plan is being executed “as if we’re moving forward with it.” Young controls three of the votes on the five-member board: his, Garbark’s and that of the city solicitor.

The board voted in 2013 to award the same firm a multiyear, $83 million contract to install wireless “smart” meters, which are designed to continuously transmit signals that monitor water use and cost. Itron has other, ongoing contracts related to the meter reading system.

Garbark said the meters installed by Itron are “state-of-the-art,” and that many of the problems in his department are tied to human error. He said the city’s crew of meter technicians struggled to transition to the new system, while Itron’s workers are experts in the technology.

“What we hope is that, when there’s an issue, it’ll get a resolution a lot faster,” he said.

Asked whether the city attempted to better train its employees, Garbark said the department did “numerous trainings,” but problems did not improve.

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The meter-operations employees who are being laid off have been on leave for the last several months due to the coronavirus pandemic, according to the union that represents them. Those workers reported to their union that they had been previously provided with subpar equipment to read the meters.

Eckel also objected to Wednesday’s announcement as reflecting a “lack of transparency and seemingly unilateral decision-making on the mayor’s end, when he is only in office for a few more months.” City Council President Brandon Scott defeated Young in the June Democratic primary and Young will leave office this winter.

Scott said he was not briefed on the announcement before the mayor announced it. He said his thoughts are with the laid-off employees, and he pledged to advocate for the city to connect them with new job opportunities and work to improve the troubled water system.

Young ordered another audit of Baltimore’s water billing last year, 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. Bentley said the inspector general’s office is working on the audit.

Then, at the start of the coronavirus pandemic, Baltimore residents' water bills were delayed by several weeks because of complications tied to telecommuting requirements.

The Department of Public Works — along with the law and finance departments — will still work with residents and businesses who are tied up in water billing disputes.

Erratic billing has long frustrated Baltimore County residents, as well. The city manages water meter reading and billing for the county under a long-standing agreement.

Democratic County Executive Johnny Olszewski said in a statement that hiring Itron will help address concerns about further billing delays.

County residents — who are billed for water quarterly, rather than monthly — haven’t received bills since the pandemic began. The county has struck a separate, smaller deal with Itron make up for the missed billings in recent months. Olszewski said he will also send four staff members to help city DPW employees prepare information for residents. New bills should be processed by mid-November.

“We’ve heard from many who are frustrated that they haven’t yet received their water bills," Olszewski said, “and others who are anxious to receive their bills so they can budget for and pay them without any further delay.”

For some, the economic uncertainty tied to the pandemic has meant stacks of unpaid utility bills. Baltimore’s water system has seen a large increase across the city and county. The amount of uncollected charges for all accounts rose nearly 16% between March and September, totaling $194 million by Sept. 15, according to the Department of Public Works.

Baltimore Sun reporter Alison Knezevich contributed to this article.

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