City Spends Additional $9.2 Million on Another Failed Water Billing System

Audit Date: July 1, 2009
Audit Categories
  • Performance
Controller: Alan Butkovitz

Executive Summary


For Immediate Release:
July 1, 2009

Contact: Harvey M. Rice
(215) 686-6696

City Spends Additional $9.2 Million on
Another Failed Water Billing System

Butkovitz’ audit finds fifth billing system still doesn’t work

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PHILADELPHIA – As water rates increase today by 6.4 percent for thousands of Philadelphians, City Controller Alan Butkovitz released the New Water Billing System audit that found the City has spent $9.2 million on the ineffective “basis2” system.

In conjunction with a 2007 audit of Project Ocean that looked at the City’s previous failed water billing systems, the City has now spent almost $50 million on five water billing systems that do not properly function. The basis2 system cost $2.5 million more than the City projected.

According to Butkovitz, “When the last audit was issued the City pledged that if it spent another $6.7 million on an ‘off-the-shelf’ software program known as basis2, it would finally get it right and the system would be operating on Jan. 1, 2008.”

“In addition to the $2.5 million overrun, it is very troubling to announce that once again, the City is left with a water billing system that doesn’t work,” said Butkovitz.

After one year under the new system, water and sewage collections were down $9 million. The City collected $428 million during calendar year 2008 compared to $437 in 2007. Under the “new” water billing system, the outstanding amount owed the City increased by $8.4 million putting the total outstanding for water and sewer accounts at $167 million.

“While the bill for this on-going debacle continues to climb higher and higher and the problem appears to get worse year after year, Philadelphians continue to foot the bill for this continuing technological mess,” said Butkovitz.

Over the last eight years, the City has raised water rates by 41 percent. In the last eight months, the City has raised its rates by 13.5 percent.

“It is outrageous that the overwhelming majority of responsible customers will be forced to pay higher rates because the Water Revenue Bureau can’t get it right,” said Butkovitz.

Some of the problems found with the basis2 system include:

– customer’s were not billed accurately – in one case a bill was sent for $331,163

– employees, who were not allowed to make customers’ credit adjustments, were changing amounts owed

– only delinquent commercial accounts were identified and delinquent vacant and landlord accounts were not included

– programmers who designed the new system were given access to billing data

“The City must aggressively focus on solving this on-going water billing system mess once and for all,” said Butkovitz. “The City must also aggressively collect the millions of dollars owed in long outstanding water bills.”

“It is unfair and unconscionable that hard working Philadelphians are forced to pay higher and higher water bills — to compensate for those who don’t pay their bills – and for an on-going technological mess that has already cost an estimated $50 million.”

Click here to view the report