To understand why some of us are unshakable doom 'n gloomers, please read this article. I wonder how many other cities operate this way? I can't wait to see how they handle Y2K.

City finances shredded by incompetence, mainframe overload

by Michael Peterson

. . . I want to focus one more time on lost water: The tale of how Durham lost 25 percent of its water.

For an idea of the magnitude of the problem, look at your last water bill. Average homes consume somewhere around 300 gallons per person per month. One meter at Duke University--we'll call it The Faulty Meter--registered in March this year 43 MILLION gallons! Five percent of all Durham's water.

That's ONE meter at Duke, and Duke has more than 100 meters. The difference between the 1998 bill with The Faulty Meter and the 1999 bll, after the meter was replaced, is $100,000.

During the period of The Faulty Meter, a period of YEARS, Duke was undercharged perhaps $100,000 every month! For ONE meter!

How bad is the overall problem? How much money was lost with Duke's one meter and at least 16 other major accounts with faulty meters--accounts like IBM, GTE, Durham Regional Hospital, VA Hospital, EPA, Research Triangle Institute?

The difference before faulty meters, when water loss was 10 percent, to the current loss of 25 percent, is $17,000 A DAY! SIX MILLION DOLLARS a year. For YEARS!.

I asked Assistant City manager John Pederson about this. Pedersonb, the city's former finance director, is the guy who brought us the Heritage Square Shopping Center fiasco, and whose department recently accounted for among the most city documents "recycled." (How about shredded?!) I asked: What's the difference between Duke's 1995 and 1997 bills? The difference in consumption? Questions at the heart of lost millions of dolars.

He didn't have answers! Though he's known about Faulty Meters for a year, he hasn't examined the bills for Duke and others. You see, according to Pederson, "to save memory in an aging mainframe computer," water and sewer bills were moved to "microfiche." The information is not available for a LONG time. Nonsense and gobbledygook!

The problem emerged a week ago! He should have requested info on the major accounts then. But no! It's like Heritage. Fourteen years ago, the city lent Heritage $1 million. Not a penny was EVER paid--someone forgot to follow up on the loan. WHO? Who was the finance director for the years the account was lost? Take a wild guess.

Yet when the problem WAS finally discovered, the City Council, on Pederson's recommendation, voted to forgive the $650,000 interest debt, re-lend the $1 million interest-free and rent office space at Heritage Square so THE CITY pays off the loan and all taxes!

One shudders to think what will happen to the lost water dollars. Perhaps the city will offer to pay Duke's electric bill. Or have Earl and Pearl Squirrel give Duke students free balloons. [Earl and Pearl are costumed characters used to promote Parks and Rec--the costumes cost some ungodly amount, thousands apiece.]

Here's how out of control the problem is--an unbelievable update on the saga of Garden View Realty. Garden View reported water problems in an apartment complex TWO YEARS AGO. George Beischer, the owner, told officials the city was seriously underbilling: $10 for a period when the city should have billed $6,000! A year later, in October 1997, the city replaced the water meter, but underbilling continued another six monthns.

TWO DAYS AGO, the city notified Garden View that the new meter "Does not meet American Water Works Association accuracy standards." It has to be replaced! Again! Or was it replaced the first time? What DID happen? What is going on? Is the answer on Pederson's microfiche?

Mayor Tennyson talks of accountability, but there is none! And the City Council? NOT A WORD! They're too busy charging $2 for folks who want to go to Bulls games, the Carolina Theatre and the Arts Center. They're also investigating ways to sue gun manufacturers.

Oh, there is SOME accountability, of curse. The woman [emplyee] who bilked the city of $60,000 in credit card fraud?--she's gone! And the guy who dumped dirt [at city ewxpense] at his church?--he's toast too.

But those mismanaged millions? Little fish are caught, fried and served, but the WHALES get away.

Durham is in desperate need of an OUTSIDE investigation of finances--a top to bottom audit. Forget an internal audit or the routine annual one by a firm the city hires. I worry about mainframe overlaod! Or shredding.

It makes you wonder about the sudden miraculous $18 million surplus City manager Lamont Ewell jusr discovered.

More next week.

-- Old Git (anon@spamproblems.com), May 21, 1999

Answers

Old Git,

Don't you know the worse you screw something up, the bigger the promotion you get? :) Look for this Pederson to get a promotion, and a huge increase in salary. History repeats itself.

-- (cannot-say@this.time), May 21, 1999.

On a side note, so noone mistakes this for fact, I can't imagine where the figure of 300 gallons per person per day came from. Water use calculations are closer to at least 50 gallons per person per day, taking into account showers, dishes, laundry, toilets, irrigation, etc., and that's just for home use! (My state assumes 110 gallons per bedroom.)

-- Brooks (brooksbie@hotmail.com), May 21, 1999.

Not quite, CSTT! The last two times this happened, one guy was allowed to "resign" and then turned up with a job surveying the city's cemeteries(!), which JUST happened to equal the time he needed to qualify for retirement, and the other guy (last police chief) was allowed to retire with benefits when the City Council passed an ordinance allowing him to count his four years in the Army for city retirement purposes! So I assume Pederson will be allowed to "resign," will take on another, more "harmless" job until he's qualified for retirement, and we'll support him, along with the others, until he snuffs it. These people are all in their fifties, except for the former chief, who's in his forties, so that could be quite some time.

-- Old Git (anon@spamproblems.com), May 21, 1999.

Old Git uttered:

Average homes consume somewhere around 300 gallons per person per month.

Then Brooks muttered:

On a side note, so noone mistakes this for fact, I can't imagine where the figure of 300 gallons per person per day came from.

Huh? :-)

Regards, Simon Richards

-- Simon Richards (simon@wair.com.au), May 21, 1999.

Thanks Simon, what my non-compliant brain meant to transmit to my fingertips was that I don't agree with the 300 gallons per person PER MONTH figure...

-- Brooks (brooksbie@hotmail.com), May 21, 1999.

The basis of the calcuation can be kind of varied, depending on how records are kept and processed (In Durham's case, about normally).

I think most municipalities look at total water consumed (according to ALL meters, however faulty). This number is then divided by the population according to the last census. To figure water per family, this water/person calculation is multiplied by the size of the average family according to the last census.

Of course, this number is skewed if you have a few major industrial water consumers (perhaps processing tobacco does this?) At best, if records are kept carefully and analyzed intelligently (hah!), they can break out zones according to zoning boundaries. Not much better, but maybe some.

As for the general observation that governments are not very accountable, and tend to pinch pennies foolishly while blowing millions equally foolishly, this is an artifact of the system. Inefficiency is, in effect, rewarded in a government bureaucracy. H. L. Mencken came as close to a solution to this problem as anyone, whe he said "always vote against the incumbent." The DC SMSA has nearly the higest percentage of poor people, yet the highest per capita income, in the US. It's a problem.

-- Flint (flintc@mindspring.com), May 21, 1999.

My local officials ran off the City Manager who had been doing a good job for 20 plus years and he moved on to be the manager of a large County at a huge increase in pay. They then hired an out of state manager who was somewhat incompatible with the way they wanted to operate. They then paid him $50,000 severance pay for less than one years service when there was no provision for severance pay in his contract. This is the same city that had the fiasco with the police laptop computers, the contract awarded to build the road with no right acquired posted Wednesday this week. In other words an incompetent mayor and city commission can negate the ability of a competent city manager and when the difference gets too big, they run off the competent city manager who has no trouble finding a better job. Murphys law operates with a vengence in local government and these idiots often get reelected.

-- Tom (notstupid@wow.gom), May 21, 1999.