Pearland is in hot water over $6M utility bill gap
When Jimmy Davis received his Feb. 12 water bill from the city of Pearland, he immediately became suspicious. He was being billed only for water usage from several months earlier, before Thanksgiving.
A financial analyst for a utility provider, Davis began reviewing his previous water bills and started communicating with neighbors about whether they had billing issues.
“Then other people started saying, ‘Well, I’ve got issues too,’ ” Davis said. “Then when the people said, ‘Did anyone get two bills in February?’ I said, ‘OK, that’s a problem.’ ”
What Davis and his fellow Pearland residents — the city has nearly 40,000 water customers — would soon discover was a lag between when the city’s water meters were read and when customers were getting billed for that usage.
The lag dated back to 2018, notably draining revenue from the city from June to September 2019. City officials did not immediately realize the decrease in revenues were tied to billing as opposed to a decline in water consumption. By the time officials determined the root cause of the revenue decline this month, the city was
staring down a $6 million deficit in uncollected water bills.
Now Pearland officials are considering a plan to claw back the unpaid water usage fees from customers over the next two years.
Addressing frustrated residents at a Feb. 17 special meeting on the issue, City Councilman Tony Carbone said, “I’ve lost trust with staff, and I know citizens have lost trust with us, and that will take time to rebuild.”
The problem came to light following an influx of complaints in 2018 from Pearland residents about the length of the water billing cycle, according to Jon Branson, Pearland’s deputy city manager. Historically and according to industry standards, meter reads were conducted every 28 to 32 days. However, some customers’ meters weren’t being read until more than 32 days had lapsed. As a result, those bills had higher water consumption than usual and, in some cases, pushed customers into a higher billing tier.
In an effort to fix the problem, the city decided to move to standardize the read cycle to an average of 28 days. However, it failed to change the once-a-month billing cycle, creating a gap between water usage and billing that increased over time.
Pearland is now billing for water usage almost 60 days after the meter reads, which is why Davis only recently received a bill for water he used in November.
“It shouldn’t have occurred,” said Branson, who began the recent special meeting by explaining how the city found itself in this situation and apologizing to the 40 or so residents in attendance. “We created the situation, we’re accountable and we’re committed to resolving the matter.”
Once city staffers became aware of the problem, they moved to fix it but again made a misstep. Customers in one section of the city, labeled “Cycle 11,” which includes 12,348 customers, were being double-billed in February.
The water-billing discrepancies infuriated many Pearland residents, who aired their frustrations at the special meeting.
Denise Hewitt was one of the Pearland customers who received two February bills, for $132 and $120. During the meeting, she questioned how the city let the billing problem fester for two years before anyone realized what was happening.
“How can you get this far behind?” Hewitt said. “I’m paying a high bill every month (for water), and I’m really insulted by this. Why didn’t we see this presentation before you billed me the $130? Where was the transparency? It wasn’t there.”
The city is now considering several proposals to “catch up” on the delayed billings. During this time, late fees and water shutoffs will be suspended, and payment plans are available for residents.
Under the plan that the city is considering — dubbed the “32/30 plan” — water meters would be read every 32 days and the billing schedule would be on a 30-day cycle until all the money due from a customer is paid. No customers would be double-billed in a single month, but the payment process wouldn’t be complete until March 2022. Once the money is collected in full, the city plans to read meters once a month, on the same day each month.
The City Council directed staff to report back with more details in anticipation of implementing the plan next month. A special executive session with council members and city staff was to be convened on Monday evening.
Councilman Gary Moore said he didn’t want any customer double-billed in one month via automated bank draft. He also directed staff to try to find a way to inform water customers how much they owe in total and to give them the option of paying their outstanding bill in full. But determining the exact amount owed for each customer is complicated by the city’s transition to automated meter readings. Branson said the current system does not allow for that.
The more difficult task for Pearland’s administration will be regaining the confidence of residents.
Davis has called for Branson, as well as Pearland’s city manager and assistant city manager, to resign. He said that the special meeting was “a dog and pony show” and that the plan for rectifying the water billing issues was being forced on residents without their input.
“What good is our water department?” Davis said. “It just seems like every time they give an answer it raises two or three more questions.”