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October 20, 2008

 

New York City DEP Slow to Replace Water Meters

City Could Have Collected Additional $32 Million in Two-Year Period

New York City could have collected an estimated $32 million in additional revenue during city fiscal years 2006 and 2007 if the city Department of Environmental Protection (DEP) had replaced old water meters on schedule, according to an audit by State Comptroller Thomas P. DiNapoli.

“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.”

In 1988 the DEP began its universal metering program. In addition to billing equity, the program was also expected to help DEP reduce water pollution, improve water quality and reduce consumption. Since the program began, DEP has installed water meters for most of its 825,000 customers. However, DiNapoli’s auditors found DEP is behind schedule to replace thousands of meters that were at or near the end of their useful lives.

DiNapoli’s auditors found DEP’s replacement program had completed only about 25 percent of the program’s first phase. Additionally, under DEP’s transition program, some customers did not have to immediately convert from the old flat-rate billing system when their meters were installed. 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 report recommends 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.

Click here for a copy of the report.

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