Water bill problems affected 94,000

Nearly 4 out of 5 of the Honolulu Board of Water Supply’s roughly 166,000 customers received at least one bill between January and September that was based on estimated usage, meaning they were undercharged or overcharged for at least a month.

The agency has reined in the number of estimated bills back to the more typical 1 percent to 4 percent of customers in recent months.

But it’s still unclear to the agency what triggered the massive numbers earlier this year and how many people were badly affected.

The Honolulu Star-Advertiser has spoken to customers who have received bills showing that they needed to pay as much as $3,000 more because they had been undercharged over as many as seven billing periods in earlier months this year. Others have received credits for several hundred dollars.

At the height of the controversy over estimated bills toward the end of summer, BWS Chief Engineer and Water Manager Ernest Lau told the board and the public that his staff contended that no more than 17 percent of customers received an estimated bill, and that there was a roughy 50-50 split between those being undercharged and overcharged.

But numbers provided to the Honolulu Star-Advertiser by the agency this month showed that in March, 94,643 customers received an estimated bill, or about 57 percent. And of the nearly 130,000 customers who received an estimated bill, 79 percent received an underestimated bill while 21 percent were overcharged.

A resolution that asks voters if they want to change the City Charter to ban the board from "back-billing" its customers will be aired by the City Council’s Executive Matters and Legal Affairs Committee at 1 p.m. today. Councilwoman Kymberly Pine, the bill’s author, said the family of a 90-year-old Kalihi man told her that he recently received a letter showing he owed more than $7,000, the result of an apparent leak that wasn’t detected until actual readings were taken recently.

Resolution 13-216 has met with strong opposition from Lau and the board, as well as Mayor Kirk Caldwell, who all argue that the agency’s problems are behind it and that the board would be financially hindered if not allowed to charge customers "after the fact" for water they used. As a result of the estimated bills, the agency reported it received $3.89 million less than it was owed from January through October, although the difference has since been made up, board officials said.

Agency officials and their supporters also say the resolution is unnecessary because the high percentage of estimated bills were part of a one-time phenomenon and that the circumstances that caused the situation have passed.

Deputy Water Manager Ellen Kitamura said that once the large number of estimated bills was first discovered, about May, the agency immediately took steps to ease the situation by hiring more inspectors, audit clerks and customer service agents to help at different points and the situation has appeared to ease.

"We’ve been able to sustain (lower numbers of estimated bills) for a few months, so we’re fairly confident that whatever happened in that February-March-April time frame has been corrected and we’ll be able to keep the number of estimated bills down," Kitamura said.

Water board officials said they have been too busy dealing with the consequences of the issue to examine precisely what caused it.

"We didn’t wait to do the forensic analysis on the root cause of the problem," Lau said. "We just basically saw the obvious errors like lack of staffing … and started to add more people."

In fact, no one at the board looked to see how many customers received an estimated bill until it was requested by the Star-Advertiser two weeks ago. Even then, it took a week to obtain the data because the agency’s billing program is not designed to calculate such numbers.

"The system’s not set up to give you recurring management information," said Henderson Nuuhiwa, the board’s Information Technology Branch program administrator. The reason Lau and other board officials believed that at most 17 percent of customers were affected by estimated bills — a number recorded in May — was that no one looked back to see that higher numbers were recorded in earlier months.

"We didn’t go that far back until you asked us," Nuuhiwa said. "So basically we were experiencing the issues … without realizing that a lot of what we were experiencing was because of the prior months that compounded over. We were in reaction mode trying to minimize the impact as much as possible to the customers."

And while board officials have acknowledged the numbers were abnormal, they say that getting an estimated bill for one month, in and of itself, does not typically have a dramatic impact on a customer’s household budget.

"An estimated bill is generally an accepted practice in the utility industry and generally doesn’t raise concerns," board spokeswoman Tracy Burgo said. "And usually, when a customer gets a one-time estimated bill between two real, read bills, the estimated bill gets rectified automatically by the billing system in the following month’s bill. So it’s barely noticed. It’s really those multiple, consecutive-month estimated bills … that are causing the complaints."

But exactly how many of the 130,000 customers who received estimated bills saw them for more than one month consecutively is unknown, and will take the program another two weeks to spit out, water officials said.

"What we’re in the process of doing now is going back to try to find out what happened," Kitamura said. "We’re trying to go through the numbers and are going through some scripts to try to pull that information."

Lau said his own family received three months of underestimated bills, for which he ended up paying a total of about $14 in undercharges.

A "perfect storm" of circumstances contributed to the large number of estimated bills, which occur when the common "drive-by" reading of a water meter nets a zero reading.

A number of batteries in the meters died about the same time. A previously scheduled meter reading study should net more answers, Lau said.

Then, in January, the agency switched to a monthly billing system after issuing bimonthly bills for decades, resulting in a fewer number of meter readers dealing with an unanticipated demand for secondary reads that now needed to be dealt within a one-month span rather than two months. Estimated bills are also triggered when readings are found significantly higher or lower than previous readings and the formulas used in a billing system installed earlier this year may need to be adjusted, officials said. It may also have been caused in part by the carrying over of data from the previous system.

The seven-member water board on Monday asked Lau to give an update on the estimated-bill issue at its meeting next month after Pine explained the complaints she has received.