STATUS OF THE BUDGET ANALYST'S 1994 WATER DEPARTMENT MANAGEMENT AUDIT RECOMMENDATIONS

BACKGROUND

The Field Services Section of the Customer Services Division is responsible for two primary water service functions: 1) reading water meters, and 2) providing various water-related services, such as conducting inspections for water leaks that result in high water bills, processing sewer service charge appeals, changing water meters, and collecting delinquent bills.

The Field Services Section is located at the City Distribution Division's Yard at 1990 Newcomb Avenue. The Section is authorized a total of 38 permanent, full time positions, as shown below.

There are a total of approximately 170,000 water accounts and approximately 180,000 water meters in the City.

Compensation for the two primary classifications in the Field Services Section differs significantly. The salary at the top step of a classification 1466, Meter Reader, is $47,894. The salary at the top step of a classification 7316, Water Service Inspector, is $78,013, which is $30,119 or 62.9 percent greater than the salary of a Meter Reader. In comparison, the salary at the top step for a classification 7388, Utility Plumber, is $77,256, or $757 less than the salary at the top step for a classification 7316, Water Service Inspector.

Meter Readers

As shown in the organizational chart, the Meter Reader Unit is headed by a classification 7317, Senior Water Service Inspector, assisted by a classification 7316, Water Service Inspector.

The City is divided into a total of 11 meter sets [districts]. Each Meter Reader, with the exception of the `Swing' Reader, is assigned a meter set [district] that he or she maintains and routinely reads. The `Swing' Reader provides vacation and other absence relief.

Each meter set contains a total of 34 bimonthly routes and 3 monthly routes. A bimonthly route can have anywhere between 92 meters to 645 meters requiring reading, depending on the difficulty of accessing the meters on the specific route. Analogously, a monthly route can have anywhere from 86 to 293 meters requiring reading. During a two-month meter reading cycle, each Meter Reader is expected to read a total of 40 routes, each bimonthly route once and the monthly routes twice. According to the Chief Water Service Inspector, the total number of meters read in the City by fiscal year is shown below.

Fiscal Year	Number of Meters
2003-04	1,092,259
2002-03	1,074,131
2001-02	1,075,261
2000-01	1,068,493
1999-00	1,086,764
1998-99	1,071,959

The average number of meters read for the six-year period shown is 1,078,145 and the standard deviation is 9,266. Thus, the coefficient of variation is 0.86 percent.

Meter Readers, generally, are not assigned a City vehicle, but are issued a Muni Fast Pass. In practice, most Meter Readers use their privately-owned vehicle for transportation to assigned routes.

Water Service Inspectors

As shown in the organizational chart, each of the three Water Service Inspector Units is headed by a 7317, Senior Water Service Inspector. Two of the Water Service Inspector Units are assigned six classification 7316, Water Service Inspector, positions. The third Water Service Inspector Unit is assigned an additional Water Service Inspector, who works a swing shift.

The City is divided into a total of 16 Water Service Districts plus the Waterfront, each of which is assigned a Water Service Inspector. The "Swing Shift," Waterfront, and Revenue Recovery Water Service Inspectors account for the total of nineteen assigned to the Water Service Inspector Units.

The performance standards for Water Service Inspectors are contained in a 1989 memorandum signed by Mr. John Mullane, then Manager, Customer Service Division. An example of the type of performance standards used is as follows:

· Single downtown district: 20 jobs

The Field Service Section work order priority list is contained in a November 13, 1998, memorandum signed by Bob Wang, the current Manager.

Water Service Inspectors are assigned a City vehicle.

According to the Chief Water Service Inspector, the total number of work orders completed by Water Service Inspectors by fiscal year is shown below.

Fiscal Year	Total Work Orders Completed
2003-04	66,180
2002-03	*
2001-02	*
2000-01	65,075
1999-00	73,788
1998-99	68,857

*The Field Services Section Manager has stated that the workload files for the period of April 2002 through March 2003 are missing from the Field Services Section Office.

STATUS OF PRIOR AUDIT RECOMMENDATIONS

The Budget Analyst's June of 1994 Water Department Audit Report includes two sections concerning the Field Services Section. The report section title, recommendations, and action taken on the recommendations are shown below.

Section 1.2: Customer Services Work Order Efficiency

1.2.1. Eliminate all "verify read" work orders and eliminate one corresponding full-time equivalent Water Services Inspector.

The Department disagreed with and has not implemented the recommendation. The Department stated in its response that Water Service Inspectors are trained to identify and correct problems that result in low or high water consumption that are found in "verify read" work. The Department further stated that "Quick resolution of problems improves both revenue collection and customer satisfaction." According to the Department, the threshold for generating "verify read" work orders has been raised, thereby reducing such work orders by an average of 43 percent.

1.2.2. Use Meter Readers instead of Water Services Inspectors to perform certain work orders including getting meter reads, checking the meter reads for new accounts, posting 48-hour delinquent billing notices, and collecting payments. Delete four Water Services Inspectors and add four Meter Reader positions for these activities.

The Department disagreed with and has not implemented the recommendation. The Department stated in its response that although the duties identified can be performed by Meter Readers, the Department believes that the potential costs savings are overstated and that the substitution of the existing 17 service districts by 13 larger service districts would increase travel time for Water Service Inspectors as well as the four replacement Meter Readers who would be required to cover the entire City.

Section 1.3: Field Service Productivity

1.3.1 Develop a comprehensive reporting system for completed work orders, and discontinue the practice of reporting completed work orders using weighted average standards.

The Department agreed that it should improve its reporting of work performed and agreed to evaluate the use of blanket work orders and the practice of using weighted averages for reporting purposes. The Department reports currently that certain work orders "just require more time and effort to complete," and that "if these jobs were not weighted and in accordance with our productivity standards, an Inspector would have to change 25 meters a day when assigned to a single outer district, which, according to the Department, is an unreasonable, if not impossible, expectation."

1.3.2 Increase the number of meters assigned to Meter Readers and reduce the number of Meter Readers by 2.00 full-time equivalent positions.

The Department agreed with and implemented this recommendation.

1.3.3 Reduce the number of Water Services Inspectors assigned to the waterfront district by 1.00 full-time equivalent position.

The Department agreed with and implemented this recommendation.

1.3.4 Implement productivity standards for the Waterfront District.

The Department's response to the 1994 audit report did not address this recommendation. The Department reports currently that "Productivity standards for Waterfront district - Because the majority of the work at the Waterfront is unique and not generated or completed using work orders, there is no way to track this on the Billing System. Similarly, there is no way to reconcile this work to our work order productivity standards for the other districts. Therefore, we rely on the Senior Inspector responsible for this district to review and insure that the Inspector at the Waterfront performs a days' work."

1.3.5 Re-allocate swing shift meter reading staff to perform meter reading for the district.

The Department's response to the 1994 audit report did not address this recommendation. The Department reports currently that the reduction of two Meter Readers, in accordance with recommendation 1.3.2 above, prohibits the implementation of this recommendation.

1.3.6 Monitor and enforce all existing sick leave and floating holiday policies.

The Department's response to the 1994 audit report did not address this recommendation. The Department reports currently that the Waterfront water and electric meter routes contain a large number of accounts that must be deducted, for billing purposes, from the "master" accounts of which they are a part. According to the Department, the meter reading system is not set up to perform this function and that therefore, the Department continues to enter these "deduct" meter reads manually.

1.3.7 Monitor and enforce all existing sick leave and floating holiday policies.

The Department did not fully concur with the Budget Analyst's finding concerning the use of sick leave and floating holidays. The Department did agree to monitor more effectively the use of sick leave and floating holidays. The Department is in the process of obtaining and providing statistics on use of sick pay and workers' compensation.

Concerning Recommendation number 1.2.1 regarding "verify read" work orders, the Department has provided the following information on the volume of such work orders. As previously stated, the full year information for FY 2001-02 and FY 2002-03 are missing from the Field Services Section office.

Fiscal Year	`Verify Read' Work Orders Completed
2003-04	7,336
2002-03	*
2001-02	*
2000-01	6,473
1999-00	7,069
1998-99	6,664

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TO: Stan Jones

FROM: Marge Vizcarra

DATE: February 14, 2005

SUBJECT: Hydrant Water Meter Devices

As you requested, below is our response to the recommendations made by the Budget Analyst as a result of the Water Department Audit conducted in 1994 concerning the leasing of hydrant water meter devices to contractors.

Recommendations:

I.5.1 Revise the current monthly fee schedule for the leasing of its three- inch hydrant water meter to reflect that it is a turbine class water meter rather than a disc/compound water meter. This revision requires the addition of a new fee charge for a three-inch turbine water meter.

SFPUC Response: Effective July 1, 1996, Schedule W-5 of the SFPUC Rate Schedules for Water Services was revised to reflect a higher fee charge of a three-inch turbine water meter. Below is the fee schedule since then:

July 1, 1996 $75.00

July 1, 2001 $81.50

July 1, 2002 $88.50

I.5.2 Implement a penalty fee in contractual agreements with contractors, which lease hydrant meters by assessing $100.00 for each month that the contractor does not comply with the reporting requirements of the contract.

SFPUC Response: Effective July 1, 1996 began assessing a non-reporting penalty of $20.00 per month to any customers who fails to report water consumption. The $20 charge for non-reporting is based on a 1996 analysis of the time spent performing the various clerical and fieldwork related to the non-reporting of a hydrant meter water use. The non-reporting penalty was adopted in addition to increasing the deposit requirement for a one-inch meter to $390 and for a three-inch meter to $850.00.

It should be noted that imposing a large penalty on a customer who is not reporting and who likely is not also paying his or her bill does not garner any additional real revenue for the Water Department. Thus, the Water Department chose instead to impose a penalty based on the additional administrative costs caused by non-reporting in addition to increasing the security deposit as well as implementing a more aggressive collection process (i.e. shorten the period of time after which the security deposit is forfeited and the meter recovered).

As part of this year's rate analysis, all service fees (including deposits) will be reviewed and adjusted as appropriate.

I.5.3 Prepare written procedures that direct the duties and responsibilities of the City Distribution Division meter shop and the Customer Services Division customer accounts which detail the steps to administer contracts to lease hydrant water meter devices and to oversee the billing and payment of fees process.

SFPUC Response: A written procedure regarding the process of leasing hydrant meters was prepared and implemented.

cc: Bill Laws Dwight Steeves

Subject File Chron File