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Water Torture 

Ralph Hofmann couldn't believe it: $5,059.40 for one month's worth of water. 

Until he saw the August 2007 bill for his two-unit rental property on the South Side, Hofmann had little clue about what was coming. Since January, at least, the water bills had hovered between $40 and $100.

Then he remembered: Months before, his first-floor tenant reported a faint hissing sound beneath the kitchen floor. Hofmann had found, and repaired, a leaky pipe in April, but there'd been no drop in water pressure -- and the bills had remained consistent all year long.

That's because those water bills were estimates. They relied on previous months' usage, and so didn't reflect the water leaking away into the earth. Hofmann's August bill was based on an actual reading taken in June, the first he'd had that year.  

The Pittsburgh Water and Sewer Authority has an automated meter-reading system -- one designed to make estimated bills a thing of the past. But like the rest of its aging infrastructure, the authority's meters are prone to failure. Sometimes their batteries stop working. Other times they're destroyed by vandals. The result is that at any given time, thousands of customers are paying estimated bills -- sometimes for years.

And some of those customers are in for unpleasant surprises when they finally get an actual reading. 

"It's a big joke," says Hofmann, "but it's not funny." 

Had he been receiving actual readings all along, Hofmann contends, the leak could have been identified and repaired much sooner. It took Hofmann two years to get the bill reduced: It was finally cut in half this past November (though the next month he received yet another notice for the $5,000 charge). 

According to PWSA records, more than 3,100 of the authority's 83,000 customers -- roughly 4 percent -- have been receiving estimated water bills for more than 12 months in a row. Some customers have gone without an actual reading for six full years. Some are customers who never received automated meters. Other have meters that have stopped working.

And it's not just landlords like Hofmann, or families living in their own homes. Among those receiving estimates -- and risking a big surprise in the pipeline -- are large apartment complexes and even other government agencies.

The consequences can be minor: a few dollars' difference between the estimated bill and a customer's actual usage. Or they can be huge. 

"To send estimated bills for more than two or three [consecutive] months would be very unusual and poor business for a water company," says Scott Rubin, an attorney and consultant who specializes in public utility issues. "If [the PWSA] has an automated system, and they're sending out all these estimates, they've got a problem."

 

Actually, the water authority has more than just one problem. Financially, the authority is itself underwater -- roughly $780 million in debt. And its 900 miles of pipes are nearing the end of their life. 

Many of the city's water pipes were installed in the early 1900s -- and were built to last 75 to 100 years. Now they're beginning to burst, and leaks are common. A November report in the Pittsburgh Post-Gazette revealed that the PWSA actually gives away or loses more than half of the water it produces. Estimated bills make it even harder to figure out if the water is going where it should. 

Michael Kenney, the water authority's executive director, says the authority is paying for a lack of foresight. "In the past, [the water authority] didn't reinvest in the future," he told City Paper just days before a pipe break in the Strip District caused a massive sinkhole. 

Kenney, who took over the authority in 2008, is trying to plug the holes. In December, the PWSA's board of directors approved a 2010 budget that included a 5 percent rate hike. The water authority plans to spend the money on repairs and expanding the water and sewer system. 

"We wanted to have a continual flow of money into the reinvestment," says Kenney, who expects the rate hike to generate roughly $4.5 million per year. "We wanted to get a little more proactive."

Big water-main breaks are what attract the TV cameras. But countless gallons are also lost without anyone noticing -- in the lengths of pipe connecting the mains to individual customers. Often, the leaks are invisible, and a higher water bill is the only clue of a problem. Estimated bills mask that symptom, meaning more lost water ... and more headaches when an actual bill arrives.

Just ask East Liberty Housing, Inc.

The nonprofit agency operates the Garden Apartments building, home to roughly 200 residents in 120 units. Typically, those residents generate water bills totaling approximately $7,000 each month.

But according to Kendall Pelling, property manager for East Liberty Development, Inc. -- a consultant for East Liberty Housing -- the complex has been prone to underground water leaks that can't be identified from above. "You can't tell there is a problem," he says. "Water pressure doesn't drop."

So when the Garden Apartments began receiving estimated readings for 15 straight months starting in October 2003, the end result was bound to be bad news. 

When the complex, then managed by Hill Cleary and Associates, finally got an actual reading in June 2005, the bill totaled $290,000. 

"Craziness," says Pelling. "It all looked perfect from above ground. You couldn't tell there was a river's worth of water leaking underneath."

After the June bill, East Liberty Housing didn't receive another bill, this one totaling an additional $127,000, until Sept. 19 -- even though the water authority is supposed to send bills each month. Three days later, the property manager received an additional charge of $62,000. Each bill reflected tens of thousands of gallons being lost underground. 

East Liberty Housing contested all three bills during a hearing with the PWSA's exoneration board, which handles complaints from customers challenging their bills. (The board is supposed to include five members, but currently is composed of just three, including the assistant city solicitor and two PWSA customer-service employees. PWSA spokeswoman Melissa Rubin says the two vacant positions, which are supposed to be appointed by the mayor and city council, have not been filled "for years.") And on Dec. 20, 2005, the board cut the total of the property manager's bills in half -- from roughly $480,000 to $240,000. In a written ruling, the board noted that while there was no proof of a mistake by the authority, "underground leaks may have been difficult for you to detect."

East Liberty Housing thought $240,000 was still too high. It took two years of court action, but in November 2007 a judge finally reduced the charges to just $18,000. 

On the same day, the agency got a break on two other bills -- totaling nearly $200,000 -- stemming from leaky pipes. (Pelling says it took five months to locate and repair all the pipes leaking underground.) The judge cut that bill down to just over $6,000. 

 

click to enlarge ELDI's Kendall Pelling, right, and maintenance worker Charles Gilbert check a water meter at East Liberty Garden Apartments. - HEATHER MULL
  • Heather Mull
  • ELDI's Kendall Pelling, right, and maintenance worker Charles Gilbert check a water meter at East Liberty Garden Apartments.

Problems like this may have been even more widespread a decade ago. Like most other water-utility companies at the time, the authority employed meter readers to record its customers' actual readings. 

But with just eight employees reading the meters of 83,000 customers, the authority could only generate actual readings four times a year, rather than every month. Even then, only about 30 percent of the meters were being read according to schedule. The rest of the bills were estimated. 

The water authority sought to change that in 1999. In an effort to modernize its meter-reading system, the PWSA signed a 10-year contract with Landis+Gyr, a Switzerland-based electronic-metering firm, to develop a state-of-the-art automated meter-reading system. The original contract was for 79 cents per meter read, or approximately $75,000 a month, and was renewed last September for roughly the same price.

The system, which sends actual readings to the authority through phone lines, replaced manual meter-readers. And at the time, it was on the cutting edge. The PWSA was among the earlier water-utility companies to implement the technology, says Paul Olson, director of standards for the American Water Works Association. Today, Olson estimates that roughly 60 percent of the nation's water-utility companies use such a system.

"The technology is advancing," says Olson. 

In theory, Pittsburgh's meters are capable of tracking daily, even hourly, water consumption. In practice, the system is supposed to automatically report water usage every month, using an MIU -- a battery-powered unit that transmits readings to the authority. That data, in turn, is supposed to virtually eliminate estimates, and help detect leaks more quickly. 

But "there is a whole host of things that can go wrong," Kenney acknowledges.

Calls to Landis+Gyr's American office were not returned. 

According to the PWSA's Rubin, a portion of the estimated accounts have nothing to do with problem meters: Some properties receive estimates because they were never connected to the automated system. But for those properties hooked up to the automated system, Kenny ticks off a list of potential problems. Vandals -- often called "midnight plumbers" -- are known to steal copper pipes and water meters at vacant properties. Meters can also corrode over time, and wires can be dislodged or cut. Another problem, Kenney says, is with the batteries inside the MIUs.

Like the authority's water pipes, the batteries are at the end of their service lives. When the meters were installed in 1999, their reading devices were equipped with D-cell lithium batteries -- each costs roughly $17 -- that had a shelf life of 10 years. Many have begun to fail.

Estimated accounts are "a huge problem," says PWSA board member Patrick Dowd, who is also a city councilor. "The [PWSA] system processes 70 million gallons of water each day, but it doesn't read the usage of 70 million gallons each day."

 "If you have an automated system, there should be no reason for estimated bills," says Frank Radigan, a utility consultant for Hudson River Energy Group, in New York. "It's a bad thing. [And] if you're doing it for an extended period of time, it's really bad."

"Something is not working right," agrees Scott Rubin, who worked for 10 years in the Pennsylvania Office of Consumer Advocate dealing with utility issues. "It looks like [the PWSA] has a pretty high failure rate." 

Kenney says things are improving. In 2008, he says, there were 6,000 accounts that hadn't been read in a year -- nearly double the number today. But he acknowledges that 3,100 accounts is still too high -- "Our goal is zero." The authority plans on spending $500,000 on repairing and replacing the meters, specifically their expiring batteries.

"We are currently going through every one of the [3,100] properties to see exactly what needs to be done," he says. "We will have this rectified within the next 10 months."

But those properties don't reflect the whole scope of the problem. The authority does not compile records listing properties which have been getting estimates for less than a year. Kenney says the PWSA only requires meters to be read once a year. That's a standard the state's Public Utility Commission sets for private utility companies -- though the commission has no jurisdiction over municipal water systems.

 

Water authority officials say they're not the only ones to blame for a string of estimated bills -- and the unpleasant surprise that often follows. 

"Customers want to push [the blame] all on us, but it's a shared responsibility," says Julie Quigley, the water authority's customer-service manager. She also sits on the exoneration board.

Quigley says customers should pay more attention to their bills. Next to the amount due, the bill indicates whether the amount was calculated by an estimate (in which case the amount will be flagged with an "EST") or by an automated reading ("AMR"). Just below the amount due, the bill advises customers that "If above read code is 'EST,' call customer service." 

"Customers need to be a little more educated" about their bills, Quigley says. 

Rick Swartz isn't convinced: "It expects a lot of ratepayers to be calling in to the water authority to say, 'I've had estimated readings eight consecutive times.'"

Swartz, for one, wishes he'd made such a call himself last year. 

As the executive director of the nonprofit Bloomfield-Garfield Corp., Swartz controls more than 50 properties, some of which are vacant homes. One such property is located at 5126 Rosetta St., in Garfield. 

Swartz's organization bought the dilapidated property in 2001, hoping to renovate or replace it. But progress has lagged, in part because the city's Urban Redevelopment Authority has been focusing on streets closer to Penn Avenue.

Swartz says he never bothered to terminate water service at the boarded-up property, electing instead to pay the roughly $20 monthly water bills. At the time, he didn't begrudge the modest charges: He expected the authority to assess a base-level fee to maintain water service -- even if no water was being used. "We know that they're going to charge something," Swartz says.

But that $20 amount was based on estimates, which the property had been receiving for years. Until August of last year, that is, when Swartz finally got an actual reading ... and a $51,000 water bill. 

"It came as a shock," says Swartz: $51,000 is roughly what his organization spends on an after-school program every year. "There's no way we're going to pay that bill."

Swartz quickly sent a letter to water-authority officials requesting termination of service and a hearing to exonerate the $51,000 charge. "There has been no outward evidence" of water leaks, he wrote, "so we had no reason to suspect this was occurring."

During the years of estimates, Swartz says, the water authority never notified his organization that there was exorbitant water usage at the property. "Nothing certified, no phone calls," he says. "Why did it take seven years to get an automated reading?"

Swartz says it could have taken even longer. "No one ever came out to fix the meter," he says. "That's the comedy in all this: We don't know how it got fixed."

Rubin, the PWSA's spokeswoman, says it's hard to know why a meter stops -- or starts -- working. It's unlikely, for example, that a dying battery would flicker to life, generating an actual reading after months of estimates. "It either works or it doesn't," she says. 

Rubin says customers will typically receive estimates until meter repairs are made. She says there are nine PWSA employees responsible for fixing meters after work orders are created by customer-service representatives.

The BGC's Rosetta Street house isn't the only property to have received estimates for more than a year straight. According to PWSA records, as of last October the nonprofit owned seven properties that have been receiving consecutive estimates for more than a year. 

"Estimated readings kind of lull you into thinking, 'I can take $10-15 a month,'" says Swartz. "The last thing that occurs to you is, 'I could incur a $51,000 water bill by holding this property.'"

 

Swartz and others say the authority could be more proactive -- by sending warnings to customers with repeat estimates, notifying them their meters may be malfunctioning. 

"Customer service has to be ramped up dramatically," says Dowd. "[The water authority's] information system is hobbling."

The authority does send out hand-typed notices to some customers who have been receiving estimates. But that process isn't automated: Rather than sending notices to every customer with, say, 12 months of estimated readings, Quigley says the notices are generated manually for properties that have been getting estimates for the longest period of time. 

"A goal of ours is to make letters generated electronically," says Kenney.

But by the time you're made aware of such problems, some disgruntled customers say, it's already too late. 

Even the city's Urban Redevelopment Authority -- which, like the water authority, is a quasi-governmental agency -- has had trouble getting its sister agency to resolve problems.

Among the 3,500 properties receiving estimates for a year or more as of last October, 26 belonged to the URA. (Almost all are vacant.) In a December e-mail, URA spokeswoman Megan Stearman wrote that officials realized the problem in August and requested actual readings on all of those properties. 

"However," she continued, "[the] PWSA has not complied." 

In 2006, Stearman says consecutive estimates disguised water-line breaks at two separate URA properties. And in both cases, she says, "[The] PWSA worked with us to provide some relief on the accounts, and waived interest fees." 

But that's often the best-case scenario -- even for customers who try to take the initiative in dealing with problems. 

Swartz, for one, is still waiting on a response to his letter contesting August's $51,000 bill. Apparently, he says, water service to the property hasn't been shut off, even though he had requested it in the letter. What's more, the account is back to receiving estimates. In December, the Rosetta Street property was billed $2.64. 

Swartz can't figure out why the meter apparently stopped working, any more than he understands why it started. 

"This is like Alice in Wonderland," Swartz says. "And [the estimate] is the Cheshire cat that appears and disappears."

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