The Honolulu City Auditor has completed work on a Management and Performance Audit of the BWS pursuant to City Council Resolution 13-201, FD1. View a copy of the final report and continue reading below to learn about what BWS has done to improve its billing and operating system and ensure that our water is safe, dependable and affordable for customers.

Lessons Learned, Improvements Made

The issues on implementing a new billing system was a learning experience for the BWS. The BWS had done its best to prepare for the transition to a new customer information and monthly billing system, but did not anticipate the problems with the system that impacted the new billing procedure.

To date, many of these problems have been addressed and currently:

  • Since April 2014, BWS obtains 98% or more of its meter readings so that only 2% or less are estimated.
  • BWS billing system has been reconfigured to identify and hold any bill estimated for more than two consecutive months. These bills must be reviewed and manually approved before they are released.
  • BWS has hired more meter readers, billing staff and customer service representatives. The average speed of answer is 1-2 minutes or less.

Water Rates/Billing Charges

  • The BWS is responsible for the operation and maintenance of 2,100 miles of pipeline, 90 booster pump stations, 94 potable water sources and 171 reservoirs across Oahu. The BWS provides an average of 145 million gallons of water per day.
  • The current rate schedule was set in accordance to the American Water Works Association (AWWA) Principles of Water Rates and Changes. It is based on cost of services, revenue requirements and rate analysis. The five year rate schedule is based on forecasted revenue projections. Past revenue surpluses or shortages are taken into account when setting the rate schedule.
  • The 5-year rate schedule was approved in 2011 and took effect in January 2012 to keep Oahu’s water infrastructure and treatment systems operating properly. By keeping our system in good working order through planned replacement and repairs, the BWS is minimizing main breaks and emergency repairs that can mean greater inconveniences and higher costs. Additionally, the cost for the day-to-day operation of the BWS system continues to rise – electric power, fuel, materials and labor.
  • The billing charge for the current 5-year rate schedule covers half the cost for a new billing system and covers the cost for maintenance and upgrades to the system, online bill payment program, and Automatic Meter Reading (AMR) battery replacements, meter replacements, AMR vehicles, and BWS staff costs related to servicing the customer, such as customer care, credit and collections, revenue accounting, IT investigations, meter reading and maintenance. The costs were spread out over the 5-year rate schedule to minimize impact on customers.
  • BWS collects a postage charge from Maui County and Kauai County which covers their share of BWS postage expenditures to mail the bills to their customers. The counties are also assessed a “per bill” charge which covers their share of BWS operational costs to handle billing and collection. ENV is assessed a capital recovery fee which covers their share of the cost of the customer care and billing (CC&B) system. ENV is also billed a base charge which includes their share of BWS operational costs to handle billing and collection. These fees are assessed and reimbursed to reduce the cost of the CC&B system to BWS ratepayers.
  • The BWS is committed to financially-efficient operations and is doing many things to keep costs down. This includes optimizing energy management and facility operations. BWS is also controlling the size of its workforce by balancing staffing levels to provide the services needed for the maintenance, repair, and replacement of its facilities. The BWS is also midway through a comprehensive water system assessment that will identify the needs of the water infrastructure that will enable BWS to prioritize improvement projects so that we are using ratepayer money wisely.
  • The BWS monthly billing charge of $8.44 compares favorably with current rates for HECO ($9.00), GASCO ($8.50), Maui Dept. of Water ($11.25), Kauai Dept. of Water ($12.00) and Hawaii Dept. of Water ($15.00).
  • Compared nationally, the BWS monthly charge compares favorably to Seattle ($13.75), San Jose ($17.70), Portland ($31.21), and Baltimore ($36.77).

Operations

  • Customer satisfaction is an important component to the BWS mission. The BWS took steps to address customer service concerns, however in retrospect, it was insufficient to address the magnitude of issues and problems caused by the move to monthly billing and high volume of estimated bills.
  • Since early 2013, Customer Care has hired additional staff and adjusted its scheduling so that more agents are manning the phones. There are now 20 BWS customer care representatives. The department also streamlined its distribution of back office work and established faster response times.
  • Today, the average number of calls received per day is 650, which is half the number of calls to the BWS call center last year during the height of the recalculated bill complaints.
  • The average speed of answer is 1-2 minutes or less.

Automatic Meter Readings

  • The BWS bills customers for water usage based on captured meter readings. The BWS has about 170,000 meters across Oahu. It’s the job of 20 meter readers to ensure that each meter is read accurately every month. For BWS to complete the job on time each month would not be possible, if not for Automated Meter Reading (AMR). With AMR, a meter reader can read 2,000 to 5,000 meters a day, compared to 50 to 200 meters a day with manual reads.
  • When a meter reader is unable to obtain an actual read, it is called a “no read.” The average number of AMR “no reads” has dropped to 9.77% today from an average of 14.39%.
  • The improvements made to the AMR system include updating the read system that allows our meter readers to obtain AMR meter readings on two frequencies simultaneously. BWS has also reconfigured the routes to increase efficiency.
  • It is important to note that the number of “no reads” did not contribute to the high number of estimated bills, but rather a system bill processing error which caused the meter readings to be dropped.
  • The system bill processing error was discovered in April and corrected within 4 days.

Charter Amendment and Governance

  • The BWS is pleased that the auditors’ report does not imply a recommendation for oversight of the BWS’ current governance structure.
  • We agree with the Auditor’s opinion, "while there are areas for BWS improvement, citizens are unlikely to realize significant benefit with a transfer to city management."
  • In 1929, after the public demanded a truly effective water system that was above politics, the Territorial legislature voted to take the control of water from the City and created the semi-autonomous entity that has the authority to manage, control and operate the water system.
  • Its semi-autonomous operations allows the BWS to successfully fulfill its mission to provide Oahu water users with a safe, dependable, and affordable drinking water supply now and into the future.

Links

Management and Performance Audit - Board of Water Supply

For More Information

Contact the BWS Communications Office at (808) 748-5041.