Pearland City Council at its July 11 meeting adopted the option to move away from the 32/30 plan—a system by which the city’s water customers are billed every 30 days for 32 days of water use—and instead make water customers catch up to the missing payments sooner to end the latency in water billing revenue two months ahead of schedule.
“I really like the idea that [32/30 ends] sooner rather than later,” Council Member Jeffrey Barry said at the July 11 council meeting. “It gives us two months to kind of get our ducks in a row, so to speak, before the beginning of the year so we can monitor a full 365-day cycle.”
A Pearland customer’s water cycle, which is determined by address, will set how frequently the customer receives utility bills through November. Once every cycle is caught up, meters will be read every 30 or 31 days depending on what month it is, according to the city.
“Anything that can complete and get 32/30 done faster is good,” Pearland Mayor Kevin Cole said. “It checks a box. It gets that part of it over with.”
Billing issue origin
The catalyst to Pearland’s water billing issue began in 2018 when the city switched over to a 28-day water meter-reading cycle, Pearland Director of Communications Joshua Lee said. Pearland customers raised complaints about the volatility in the days between meter reads.
“Some [months] it would be 29 days; other months it would be 32, 34 days,” Lee said. “There could be a three- to four-day swing from month to month on meter readings, which has an impact on your bill.”
The feedback the city received from its customers was it was hard for them to plan ahead and budget for their bill because it could fluctuate. The eventual solution was to read the meters every 28 days.
On the billing side, however, Pearland’s code of ordinances does not allow the city to bill more than 12 times per year, Lee said. Therefore, even though the city read meters every 28 days, customers continued to be billed on a 30-day basis. Over time, it created a latency period that developed a payment gap worth roughly $6 million, Lee said.
“That’s where it went wrong,” Pearland resident Jimmy Davis said.
Davis also served on the ad hoc committee created in January 2021 to make recommendations to council on the water billing plan.
Once the missing revenue was discovered, Pearland staff presented three options to City Council, which included forgiving the $6 million deficit; charging a one-time payment to collect the deficit at once; or charging water customers for 32 days of usage every 30 days, also known as the 32/30 plan.
“The 32/30 plan was essentially to reverse the decision that had been made years ago,” Lee said.
Pearland’s new billing plan
After more than two years on the 32/30 plan, City Council opted in July to move away from it because it was brought back to the table by new members Koza and Barry, who campaigned on addressing the water billing issues.
The city is aiming for all four cycles—or areas of town split into different billing schedules—to be caught up by November and move to a new billing schedule by December.
To end the 32/30 plan early, Pearland water customers are now in the 32/27-29 plan, which began at the end of August. The 32/27-29 plan bills water customers for 32 days of water usage every 27 to 29 days, depending on the cycle customers reside in, Lee said.
To educate its water customers, Pearland created a webpage dedicated to the plan, Lee said. The city also did social media posts, wrote its own news article about it on the city website and added an extra insert with each customer’s utility bill that explains the new plan, he added.
All of the city’s communication efforts explain the revised bill plan, including when each cycle will be caught up in payments and what Pearland’s new water billing plan is beginning in December, Lee said.
“We tried to capture everything that we could,” he said. “We know that we are not going to reach every single customer, but we are putting as much information out there as possible in as many places as possible so there is little opportunity to be surprised by this.”
In the aftermath of the water meter reading issues, Pearland implemented several changes to ensure a similar issue does not occur again, Pearland Utility Billing Manager Nancy Massey said in a written statement.
Raftelis Financial Consultant, one of the companies Pearland hired to review the city’s utility billing department, presented its findings to council in January 2021 and gave the city a list of recommendations.
Pearland has implemented several recommendations since then, Massey said, which include revamping the city’s finance division, focusing on transparency and collaborating among departments. The creation of the Pearland Water brand in April was a byproduct of the Raftelis report, Lee said.
“I don’t know if you can pinpoint any one [change],” Lee said. “It has been effectively a complete overhaul of the system.”
Rebuilding trust
Once the city collects all of the payments from the 28-day reading cycle, its attention will turn to implementing the Advanced Metering Infrastructure technology, which will allow customers to track their water usage through an online app and set alerts for any changes in usage that may signal a problem.
Itron, the company installing the AMI technology, gave the city a new target completion date of end of 2022. Pearland agreed to a $15.97 million contract with Itron in March 2018, which was supposed to be completed by February 2020, but a plethora of delays Itron faced has slowed the completion, said Robert Upton, Pearland director of engineering.
The switch will address another utility bill issue facing Pearland. Because the city was 71 to 78 days behind in water payments when the 32/30 plan started, Pearland was charging customers for water they used as much as two months back, Lee said.
While the city was slowly closing the lag in payments every month, it did not allow for any residents who felt their charges were inaccurate to dispute them because the city’s water meters can only store data for up to 45 days, he said.
With residents’ confidence in the city’s water billing already low, according to the Raftelis report, the switch to AMI technology will be crucial to regaining public favor, Davis said.
“AMI will be important for [the city] to be able to roll out that water source,” Davis said. “I think that is going to play a bigger role in rebuilding trust.”
The city’s ultimate goal is to have all future data from the meters uploaded to a network that will allow residents to view their usage through an online portal using Water Smart and not be restricted to only a 45-day window to dispute a charge.
“We have got to turn a corner on water billing,” Cole said. “We have got to have successes there, and [AMI] is a critical component to it.”
