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Raftelis defends utility audit

Keith Readling

Shown here is the photo Raftelis Financial Consultants' website provided of Executive Vice President Keith Readling.

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By Jon Hawley
Staff Writer

Friday, August 18, 2017

A representative of the Charlotte-based company that audited Elizabeth City’s utility bills both presented the firm’s findings and defended the limitations of its analysis Monday night.

Keith Readling, executive vice president of Raftelis Financial Consultants, made the presentation during City Council’s regular meeting.

City Council hired Raftelis in June to analyze the utility bills the city sent to customers between August 2016 and May 2017. The period covered the time the city was in the throes of billing problems following an attempt to switch to a new company and new software for processing utility bills.

The city tried to switch from software by Logics to software by Edmunds and Associates. It abandoned the software conversion in April and has slowly been getting its utility billing back to normal.

By hiring Raftelis, council hoped to restore customer confidence in the city’s billing and get a better understanding of why the software conversion went wrong.

On Monday, Readling explained that Raftelis took data, as provided by the city, from the city's Itron meter reading program, as well as from Logics and Edmunds, and converted all of it into a common format. That allowed the company to calculate and “recreate” bills to compare to customers' actual bills, he said.

Based on its review of about 301,000 utility bills from Logics and about 214,000 from Edmunds, Readling reported Raftelis found few “unexpected bills” whose charges couldn't be explained by adjustments or other factors. There were fewer Edmunds bills because the city didn't use the software to generate bills during the entire period that was audited.

Logics generated fewer erroneous bills than Edmunds did, Readling continued, noting Logics' error rate for electrical bills was only six per 10,000, versus 133 per 10,000 for Edmunds. He reported that the Edmunds software particularly encountered problems reading compound meters and handling “budget billing,” which evens out customers’ bills over the year to avoid cost spikes during the winter and summer.

Though Raftelis concluded Logics is accurately calculating people's bills, Councilor Johnnie Walton questioned the firm’s analysis. Walton questioned whether the company could validate meter readings from Itron, which the city has been using for years. Walton noted meter readings must be correct before correct bills can be calculated.

Readling acknowledged the company had no way of knowing if meters were broken or malfunctioning, but he said studying the city's meters was outside the scope of Raftelis' audit.

Councilor Tony Stimatz said the reliability of the city's meters was a separate issue. Alluding to billing discrepancies between Edmunds and Logics, he compared Raftelis' work to studying calculators that returned different numbers for the same equation.

Responding to questions from Walton, City Manager Rich Olson said the city electronically reads its meters. Logics is then used to generate customer bills. The software automatically generates an “exception report” whenever a utility account shows abnormally high usage, he said. The city also manually reads each meter once a year to check its accuracy, Olson said.

Raftelis didn't use direct meter readings for about half of the 10-month audit period. Readling said it was time-consuming for city staff to provide data for that period, and defended using Logics as a “proxy” for meter data. Of the meter data available, there was never once a discrepancy between Itron numbers and Logics numbers, he said.

Walton also questioned if Edmunds' software received incorrect data. Because Edmunds' software struggled to directly accept meter readings, the city relied on Logics software to transfer usage data to Edmunds. Logics transferred data correctly, Readling said, though the audit found Edmunds struggled to correctly import data from compound meters.

Walton also suggested the company had done too little work for the $35,000 contract it signed with the city to perform the audit. He described Raftelis’ six-page audit report as “spare bones.”

Olson said Monday he hasn't received Raftelis' final bill, but the city's already paid the company about $10,000.

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