Comptroller reports $32M down the drain

A New York State investigation by the State Comptroller’s office has estimated that as much as $32 million in additional revenue was lost down the drain by the failure of the Department of Environmental Protection (DEP) to install replacement water meters on schedule.
State Comptroller Thomas P. DiNapoli, reported on Monday, October 20, that in failing to replace old water meters in a timely fashion, the DEP overlooked a possible $32 million in revenue during city fiscal years 2006 and 2007.
In 1988, the DEP began its universal metering program in order to reduce water pollution, improve water quality and reduce consumption. Since the program began, the DEP has installed water meters for most of its 825,000 customers. However, DiNapoli’s auditors found that the DEP was behind schedule in replacing thousands of meters that were at or close to inactivity.
“Old meters lose money,” DiNapoli said. “By failing to install new meters on schedule, millions of dollars in city revenue are going down the drain. DEP needs to develop a plan to replace aging meters and take quick action to make sure that plan stays on schedule.”
Investigators found the DEP’s replacement program had completed only about 25 percent of the program’s first phase. Additionally, under the DEP’s transition program, some customers did not have to immediately convert from the old flat-rate billing system to the metered billing when their meters were installed, and some flat-rate accounts had been in transition for two to 15 years. According to a May 2006 report, more than 31,000 metered accounts were still in the transition program. DiNapoli’s auditors also found delays with water meter installation at New York City Housing Authority properties.
The investigation report had recommended that the DEP complete a revenue tracking study for the new meters, develop a formal plan to replace aging meters, ensure that a surcharge penalty is applied to unmetered accounts where required and work with the New York City Housing Authority to complete the installation of water meters at its housing developments as quickly as possible.
The DEP agreed with many of the audit’s recommendations and has begun implementing them. DEP officials said they plan to start replacing 400,000 old meters and installing a citywide automatic reading system later this year. The department’s full response is included in the audit.