A study of Burlington's water billing system found that the city is out $434,000 in uncollected fees.
Consulting company KPMG found that the Department of Public Works had 17 errors on the books. Some customers had been overcharged while others had been undercharged, according to DPW director Chapin Spencer, who presented the findings at Monday's Board of Finance meeting.
The city hired KPMG for a review of its water billing system after discovering last November that it had overcharged the University of Vermont more than $2 million for its water use. The city has established a plan to repay UVM the cash.
KPMG examined the 98 compound meters that the city oversees, said Spencer. The meters measure the flow of large quantities of water for businesses or large institutions — not private homes. UVM has 25 such meters.
All told, the city overbilled four customers a total of $210,000, KPMG found. Some customers had errors in more than one account.
The city also did not collect about $644,000 worth of water bills, ranging from $8,619 to $256,456. In one instance, the undercharge of $256,456, the department added an extra zero and miscalculated by a factor of 10, said Megan Moir, assistant DPW director for water resources.
The city is notifying the affected customers, Moir said. "We will be as flexible as possible" in creating a plan for repayment, she added.
In March 2017, DPW discovered that it had overcharged Zero Gravity Craft Brewery $144,500 for water. That November, the department discovered the multimillion dollar mistake involving UVM.
Those weren't the only errors, the study found.
In total, KPMG assessed 98 compound meters. Seventy-three passed, while five failed and impacted billing. Another 20 meters were flagged for data collection issues that did not affect customer bills.
Some errors involved a different type of meter. In those cases, the meters stopped running, resulting in the underbillings.
Many of the issues arose during the faulty installation of compound meters several years ago, Spencer said. The report attributed the issues to "human error."
"We concluded we can prevent these in the future by internal controls and photo documentation," Spencer said. Still, the department plants to hire a consultant for an organizational assessment this spring. The city has already paid KPMG $63,250, Spencer noted.
"We greatly regret this situation has occurred," he said.