A new state audit on Carmel’s accountability over its water operations found that town officials didn’t reconcile the amount of water purchased to the amount treated prior to distribution between October 2010 to September 2011. Consequently, they cannot account for a loss of 14 million gallons of water that was purchased from New York City for sewer district No. 2. The cost for that could be as much as $42,000, Comptroller Thomas DiNapoli said in the report.
Unaccounted for water loss is the difference between the amount of water purchased or treated and the amount billed to customers, the report said. Reasons for the loss could include source meter errors, unverified meter readings, errors in accounting procedure, illegal connections, malfunctioning distribution system controls, theft, underground leaks, flushing, and muncipal use (such as for firefighting), it said.
Town employees don’t read water meters periodically, so up to 72 percent of all water bills sent out are estimated, and the estimated usage appears low when compared with data from the U.S. Environmental Protection Agency, the report said. Because of that, town officials can’t calculate the actual water loss for the entire system, the audit found. It’s possible the town is underbilling customers for the water they use, it said.
DiNapoli recommended that town officials establish performance measures for oversight of the system and a long-term capital plan for acquiring and replacing capital assets and infrastruture. By doing that, the town won’t spend excessively to pay for costs associated for infrastructure deterioration. The town paid more than $400,000 for emergency repairs during the audit period, his report said.
The town, which has about 34,300 residents, has 14 water districts that serve roughly 4,100 households and businesses. The districts produce some 1.3 million gallons of water a day. Six of the 14 water districts had operating deficits in 2010 and two ended the fiscal year with negative fund balances totaling $89,101, the audit found. Town officials said the deficit in one district was caused by an unanticipated increase in the excess use charge from New York City, and others occurred because of emergency repairs required.
Other audit recommendations included increasing the estimated usage rate for water billings, conducting periodic readings of water meters, creating budgets that include realistic estimates for New York City excess-use charges and emergency repairs, and periodically reconciling the amount of water purchased with the amount treated and billed.