New York City losing revenue due to slow replacement of water meters


Thomas P. DiNapoli,
New York State
Albany, NY, U.S.A. — (METERING.COM) — October 22, 2008 – New York City has lost millions of dollars in revenue because the city Department of Environmental Protection (DEP) has failed to replace old water meters on schedule, according to an audit by State Comptroller Thomas P. DiNapoli.

The DEP initiated a universal metering program in 1988 with the intention of charging customers for actual water usage and promoting water conservation, water supply system management, and rate equity. Since the program was begun, the DEP has installed water meters for the majority of its 825,000 customers and converted most of these customers to usage-based billing. However, the audit found the DEP to be well behind schedule in systematically replacing thousands of meters that are at, or near the end of, their useful lives.

Using revenue forecasts prepared by the DEP, the audit concluded that the City could have realized an estimated $32 million of additional revenue during fiscal years 2006 and 2007 if water meters were replaced on schedule.

As of October 2006, only about 25 percent of the 5,000 oldest meters had been replaced.

“Old meters lose money. By failing to install new meters on schedule, millions of dollars in city revenue are going down the drain,” said DiNapoli, adding that the DEP needs to develop a plan to replace aging meters and take quick action to make sure that plan stays on schedule.

In addition delays were found in the repair of malfunctioning water meters. The expected timeframe for the completion of priority repairs is within seven days, but priority jobs assessed in the audit took an average of 58 days, and as long as 129 days, to complete.

The report recommends the DEP, among other actions, to:

  • Complete a revenue tracking study for the new meters
  • Develop a formal plan to replace aging meters
  • Improve the management of contract funds in the systematic meter replacement program so that the available funds are used during the contract period
  • Formally assess the costs and benefits of the options for an automated meter reading system and select the option that appears to be most cost effective
  • Work with the New York City Housing Authority to complete the installation of water meters at its housing developments as quickly as possible.

The DEP has agreed with many of the audit’s recommendations and has begun implementing them. DEP officials have said they plan to start replacing 400,000 old meters and installing a citywide automatic reading system later this year.