The bureau, in a largely dour status report to the City Council, also said it will miss a December 2002 target for fixing the system, the latest in a long line of delays.

The bureau's report details progress on reducing bills "stuck" in the system. The number of customers not getting bills has dropped to about 2 percent of the bureau's 186,000 active accounts, down from roughly 3.5 percent in March.

But 21/2 years after the city first switched on the system, water and sewer bills owed the bureau are still far above normal, the report says. Not counting the 17 new workers, 101 workers are already assigned to help with the project, more than double the computer and customer service staff under the bureau's old system.

And the system still can't automatically check whether customers on long-term payment plans are paying their bills, boosting delinquent payments and forcing workers to manually review the status of 11,000 payment plan accounts with outstanding balances greater than $150.

"This is not news I relish bringing forward," said Commissioner Dan Saltzman, the City Council member who oversees the Water Bureau. "I think there has been a lot of hard work by the bureau, and I have confidence in the people there. But I'm disappointed."

Saltzman and bureau officials said they would pay for the new workers by making cuts or deferring projects in the water and environmental services bureaus, not by raising rates.

Mort Anoushiravani, the Water Bureau's director, said the system should be stable by June 2003 or earlier. The delay could lead to a smaller or postponed bond issue next winter, meaning system repairs and projects such as covering the city's open reservoirs could be delayed.

As late as April, the city was predicting that the system would reach normal or stable operations by December, a goal first set nine months ago. Mayor Vera Katz shifted the Water Bureau from Commissioner Erik Sten to Saltzman in June, a month after Sten and Saltzman were re-elected.

During the campaign, Sten's opponents accused the city of concealing the depth of the system's problems in light of the coming election.

Anoushiravani said there was no attempt to hide information. Some critical functions that the bureau expected to have working by now are not, he said, including the automatic monitoring of customers on long-term payment plans.

"We have been extremely public in what we do and how we do it," Anoushiravani said. "This is just a dynamic situation."

Before he was assigned the bureau, Saltzman was the council's strongest advocate of quickly shifting to a replacement system, either by buying a new system or contracting out billing.

But he said this week the bureau is making enough progress to warrant sticking with the system for now. Any decision on swapping should wait until the city finishes negotiating with the system vendor, Severn Trent Systems, on a long-term maintenance agreement and a settlement to compensate the city for losses, he said.

"Cash flow has improved and correct bills are going out now," Saltzman said. "I think there has been a dramatic improvement in the functioning of the system in intervening eight or nine months."

The city bought the system from Houston-based Severn Trent in 1997 with an eye toward having it in place well before the Y2K turnover. Implementation was delayed many times. Then, when the system finally went live in February 2000, problems surfaced with approximately 40,000 accounts.

The system has failed to bill some accounts -- 200 are left that have not received a bill since February 2000, the bureau estimates -- and issued only sporadic bills to others.

The total loss attributable to the system could range from $17 million to $29 million, an analysis by The Oregonian in April indicated.

Saltzman said the 17 new workers will help knock down delinquent accounts, helping to justify the expense. They will tackle a backlog that includes:

Roughly 24,500 delinquent active accounts, up from 22,000 in March, with total receivables in excess of $22.6 million. Another 13,000 outstanding final bills are valued at $5.6 million.

Nearly 4,300 accounts with billing delays greater than 20 days, including about 1,400 accounts that have yet to be billed since being established.

About 11,000 accounts with data errors unrelated to billing, such as incorrect addresses.

Tens of thousands of transactions that were posted incorrectly to the accounting system during the first two years of operations.

Jim Abrahamson, chairman of the Portland Utilities Review Board, said the latest report did not come as a surprise to the review board. Its members had been saying for months that the system would cost more and take longer to repair than the city predicted.

"We were right," Abrahamson said. "But at least the bureau is preparing to absorb (the new costs) within their existing budget and they're not going back to ratepayers." Scott Learn: 503-221-8564; scottlearn@news.oregonian.com.

Oregon Live

-- Anonymous, September 07, 2002

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-- Anonymous, September 07, 2002