David Hughes, PE, vice president of Woodard & Curran, and Denise Cameron, PE, project engineer, found that more than 30% of Quincy, Mass.'s master meter water use was not being billed to customers — and that the city's department of public works had few effective management reporting tools to ensure the accuracy and reliability of its billing systems. Photo: Woodard & Curran
David Hughes, PE, vice president of Woodard & Curran, and Denise Cameron, PE, project engineer, found that more than 30% of Quincy, Mass.'s master meter water use was not being billed to customers — and that the city's department of public works had few effective management reporting tools to ensure the accuracy and reliability of its billing systems. Photo: Woodard & Curran

In the last year, the Boston suburb of Quincy, Mass., has seen a 50% reduction in nonrevenue water as the result of several initiatives at the city's department of public works, including random meter testing, an inoperable meter identification program, and location and repair of water main leaks.

Just a couple of years ago, though, the department's operations weren't so efficient.

The water and sewer budgets had been managed within the $200 million city budget, but with annual operating costs for the departments hovering around $40 million, the city created an enterprise fund to separate those budgets from the general fund and ensure that water and sewer ratepayers were not subsidizing general taxpayers.

But the enterprise fund revealed that the water and sewer receivables did not cover costs, and the department projected a $4 million deficit for the 2008 fiscal year. So in February 2008 the city contracted with consulting firm Woodard & Curran to perform a four-month audit to identify the causes of the deficit and provide a road map for bringing the accounts and department performance back into balance.

Quincy is one of more than 61 Massachusetts Water Resource Authority member communities, representing more than 2.5 million residents and 5,500 large industrial users.

With no treatment systems of its own, Quincy purchases nearly 10 million gallons of water daily and discharges about 16 mgd of sewage, which is pumped through the Nut Island Headworks in Quincy to the Deer Island treatment facility 7 miles away. Quincy manages the water and wastewater infrastructure in the city, much of which consists of cast-iron pipes installed in the 1920s. It also handles all billing and customer service for 22,000 resident accounts and about 700 commercial accounts, totaling more than 90,000 bills issued and collected each year.

“To regain control we needed to understand the critical issues and how to address them,” says Quincy Department of Public Works Business Manager Michael Coffey.


The audit was conducted by a team of three consultants with support from subcontractors such as a certified public accountant for financial analysis for report creation. The team analyzed the city's water and sewer billing and management systems beginning with the authority's 11 master meters (five for water and six for sewer) and continuing through customer service activities such as bill inquiries, service calls, and meter rereads.

After Quincy's 7,500 monthly bills are generated, the process begins with bill payment and extends through billing inquiry, the abatement process, meter rereads, and maintenance requests. The audit — which analyzed the entire process — revealed that inaccurate or inconsistent billing had a snowball effect for billing staff. Bill inquiry or abatement requests often forced staff to focus on reactive dispute resolution. Without adequate data archiving, justifying some bills proved difficult.

The audit analyzed the internal systems, processes, and personnel, including five meter-reading and three billing staff associated with each water and sewer billing and management activity. The audit team established priorities to address the most pressing problems and areas offering the greatest return on investment.

With more than half of its meters at least 30 years old, the department needed to upgrade more than 17,000 meters for more efficient data, and it secured a $14.9 million loan from the state revolving fund to finance the replacements and other improvements. Review of meter-reading data uncovered low meter-reading productivity (some meter-reading employees were logging few accounts per day), inefficient meter-reading schedules and routes that exacerbated the productivity issues.

Quincy had been using several different meter-reading methods, including radio reads and older “pin and wand” meters, making accurate data upload problematic. That contributed to additional estimated reads being entered, a lack of accessible and convenient water-use data, insufficient quality control data check methods, and increased workload for billing staff.

Brian Carlisle recognized early in the process that staffing issues caused the department to operate in a very reactive manner. “There was no time or money to invest in fixing processes. Now we have cost-benefit analysis data to fund the operation at the right level and reduce our overall expenses,” says the city's water and sewer superintendent. As a result, the city added one billing clerk (bringing the number of clerks to three), improved the efficiency of meter-read routes, investigated the root causes of repeated “estimated” reads, and adjusted its rate setting methods.


The public works department established a clear policy for refunds, an abatement procedure with an audit trail, and standard operating procedures for documenting meter rereads and bill reissuance. It also implemented a proactive collections program and timely notifications for past due balances through the city treasurer/collector's office, leading to almost $2.5 million in liens and interest on past-due balances collected in the first full year. Prior to the audit, the city's rate setting model assumed all users paid their entire bill every time.

The department also revised its financial model based upon reasonable estimates of water consumption and corresponding sewer discharges, reasonable collection rates based upon actual historic data, and an indirect cost allocation method approved by the city's external auditor.

The city implemented a more thorough review of the meter calibration data, monthly large-volume user reviews, and a new program for leak detection that prioritized potential areas to investigate for leaks based on the usage age and type of pipe.

The audit led to several new management reports to improve quality control and oversight and changes in the way data was handled during the upload process. That ultimately improved the accuracy and efficiency of data entry and reduced the number of credits to customer accounts resulting from data entry issues.

Quincy invested a total of approximately $75,000 in the audit, which is less that 1% of its annual $40 million water and sewer departments' budgets. For an average utility, the process would likely take three to six months and cost $20,000 to $100,000 depending on the complexity of operations, availability of key staff, and level of detail needed.

The city is now expected to fund a $1 million reserve account entering the 2009 fiscal year — a turnaround of more than $5 million. It also decreased the burden on overloaded staff and reduced the number of refunds. “No utility can afford to knowingly run a deficit,” says Lawrence Prendeville, Quincy Department of Public Works commissioner. “This audit established a road map for continued improvement.”

— Shea is a water and wastewater engineer and a vice president of Woodard & Curran.