Controller: Failure to collect on water bills cost Phila. millions

Philadelphia's failure to collect water bills drained $132 million from city coffers last year, Controller Alan Butkovitz said yesterday. That's up $12 million from a year ago.

"You don't want to wait 100 years to collect $130 million," Butkovitz said at a news conference announcing the numbers and urging the Water Revenue Bureau to step up collection efforts. The delinquencies include residential and commercial accounts.

By his count, the city has extremely generous credit terms. About $79 million of the total - nearly 60 percent - was overdue two years or more.

Delinquent payments helped force the city to raise water and sewer rates by a total of 47.4 percent from 2002 through 2010, and they will increase an additional 11.6 percent through 2012, he said. The average home bill is about $50.

Butkovitz said the recession and high poverty in the city were "part of the issue." But he also questioned City Council's 2008 law forbidding termination of water service on weekends and holidays.

That, along with a moratorium on shutting off utilities during winter months, leaves city workers 129 days of the year to use the threat of water shutoff to get people to pay their bills, Butkovitz said.

He estimated that the law preventing weekend water shutoffs reduced water revenues by $1.7 million in the fiscal year that ended June 30, 2009.

In a written response to Butkovitz, Philadelphia Water Commissioner Bernard Brunwasser said his department had been able to shift most of the work to weekdays.

Revenue Commissioner Keith Richardson, who is responsible for the department's billing and collections, said efforts to go after delinquent customers were improving. His department has been making more calls to people who owe money and has hired collection agencies, he said.

Higher delinquencies occurred despite the purchase of software programs that were supposed to improve billing, but which have often created errors, Butkovitz added.

"In spite of $50 million on five different water billing systems, the amount of money owed the city for water services continues to increase," he said.

Richardson the city had largely resolved its computer problems.

The controller's report cites other Water Department practices that "create opportunities for misappropriating of moneys," including storing money orders and checks overnight in an unlocked drawer, and failing to verify that all revenue collections were properly deposited. Collections by crews that visit customers' houses can run as high as $60,000 daily, the report said.

Brunwasser said he would review those procedures but had never lost a check or money order.