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Audit finds city does not have system in place for collecting overdue water bills

water_AMR_Meter_taken_by_PSNH_via_flickr.jpg
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A water meter. On Wednesday, City Auditor Josh Pasch released a report assessing DPW from 2019 through 2020.

A new audit assessing Baltimore’s long-troubled water billing system has found the Department of Public Works lacks a host of accounting processes. The agency does not have a system in place to collect overdue bills, nor could it show how much they billed customers from 2019 through 2020.

The agency does not have systems to collect delinquent bills and does not take proactive measures to increase water revenue collections, according to the report from City Auditor Josh Pasch, which examined DPW over the last two years.

Though DPW generates a monthly report that lists all outstanding bills, noting whether they are overdue by 30, 60 and 90 or more days, the agency does not act to collect the delinquent funds, Pasch wrote.

Specifically, the agency does not monitor the monthly report, send separate multiple late notices to customers as their bills grow more overdue nor send any delinquent bills to the law department or a collection agency to collect debt.

This failure in taking proactive measures to increase revenue collections poses the risk of financial loss, Pasch wrote.

DPW operates the city’s aging water system and provides water and sewer services to city and Baltimore County residents. Baltimore provides the county water at cost and is responsible for the maintenance of more than 400,000 water meters in the two municipalities.

The agency was able to demonstrate it collected $177 million in 2019 and $212 million in 2020.

The audit also found that DPW did not stick to several promised benchmarks, including promises to acknowledge all billing complaints within 48 hours and resolve them within five business days.

“Without monitoring the timeliness of resolving customer billing complaints, DPW cannot manage the operating effectiveness and adequacy of the workforce,” Pasch wrote.

He recommended the agency develop stronger policies and procedures around data collection and create a system to monitor exceptional changes in water bills in order to proactively identify potential errors.

DPW leaders concurred with Pasch’s suggested changes, but noted that the agency has some tools to recover delinquent bills, such as delinquency charges and liens.

Comptroller Bill Henry, who oversees the Department of Audits, said DPW cannot be run properly if there isn't a clear understanding of who oversees collecting revenue and how it is done. He added the issue is especially pressing as the city begins to implement the Water Accountability and Equity Act.

“We need accurate information from DPW in order to eliminate mistakes in the billing process, collect revenue on time and target egregiously delinquent accounts,” the Democrat said. “While we're trying not to charge more than our lower-income residents can afford, it's important that we actually collect what we're due from those who can.”