Audit finds flaws in Palo Alto's refuse bills

Staff asked to fix data 'discrepancies,' improve oversight

Dozens of Palo Alto's refuse customers have received inaccurate bills for trash pick-up services because of discrepancies in the data used by the city and its hauler, a new audit from the Office of City Auditor has found.

The audit, the first under new City Auditor Harriet Richardson, showed that customer information in the city's SAP system did not match the services recorded by the hauling company, GreenWaste of Palo Alto, in 3.5 percent of customer accounts. Of the 685 customers whose records didn't match up, 192 have had their accounts reviewed and adjusted as of March 20. The adjustments included $50,596 in back billings and $124,985 in refunds.

The problem of inaccurate billing is far from new, according to the audit. In October 2011, when city and GreenWaste staff compared the customer data in the city's SAP system and in GreenWaste's RAMS (Route Accounts Management System), the discrepancies led to billing adjustments totaling $389,989 for commercial accounts and $11,107 for residential ones.

"Customer data discrepancies not only cause billing inaccuracies but also limit the City's ability to effectively use its cost of service model, which requires accurate and reliable customer data," the audit states.

The report points to various problems in the way the two systems interface. The auditor's office has been working with city and GreenWaste staff to identify and analyze the root causes of the discrepancies found during the audit. The new audit found 123 accounts in the hauler's system that were either duplicates or were not needed. In many cases, one commercial customer would have two accounts. Customers who have two recycling carts would sometimes have two accounts, one for each cart, rather than one account showing two carts. There were 9,220 records in the hauler's system that could be combined into 4,066 records, the audit states.

The report recommends that city management work with utilities staff and GreenWaste to "clarify roles and responsibilities over obtaining information required for determining customer type, recording data, and maintaining the accuracy and completeness of the refuse customer type data."

The audit also concludes that the Public Works Department "should further improve its management of the City's Solid Waste Program to ensure accurate refuse billings, ensure sufficient revenue to recover the cost of services, and provide reliable and useful financial and operational data in support of management's strategic and operational decisions."

"Public Works has had ongoing concerns regarding the integrity of its refuse customer billing data since the inception of the City's GreenWaste of Palo Alto contract; however, it has not effectively and conclusively addressed these concerns," the report states.

The report also faults Public Works for providing financial and operational data that is not consistent with the other financial documents, without including clarifying information for the discrepancies. This was the case in fiscal year 2011, when the department's projections for the net assets in the Refuse Fund differed from those in the city's financial statements or budget documents. The audit cites "concerns regarding the reliability and usefulness of some financial and operational data used by the City in making strategic and operational decisions."

The audit recommends that the department "ensure reliable and useful data are provided to stakeholders for informed decision making."

The city manager's office largely agreed with the auditor's recommendations about the discrepancies in customer data for refuse rates. City Manager James Keene's action plan includes adopting a new method that creates unique record numbers to allow for comparison of city and GreenWaste's data. The methodology is slated to be finalized by late September.

In a letter to Richardson, Public Works Director Mike Sartor acknowledged that because of the city's 2009 change in refuse service and the complexity of the interface between SAP and RAMS, "there remain inconsistencies in customer accounts between the two systems." The city and the hauler "are continuously working together to identify, correct and enhance the systems to eliminate these discrepancies."

"Ensuring accurate billing information and program data is a priority for the City and is used for the planning and monitoring of revenues and to support analysis for rate setting," Sartor's letter states. "The City makes continuous efforts to correct the discrepancies that have resulted from the interface problems and maintain the integrity of two complete database systems."

"Staff manually monitors the data exchange and fixes errors as they arrive on a daily basis. Despite great work of staff, this manual check may not eliminate every bit of risk to the accuracy of the billing system."

The city manager's action plan agrees with all 16 recommendations in the auditor's report, which include performing a cost-benefit analysis to determine the optimal course for maintaining accurate data; clarify the roles and responsibilities of Utilities Department and GreenWaste staff who maintain the data; and work with staff from the Administrative Services Department to ensure that all financial data is "verifiable, understandable, timely, consistent and useful for decision making processes."

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Posted by Jim
a resident of Downtown North
on May 31, 2014 at 1:13 pm

Next could the city please audit the water bills which are outrageous, in error, and raising residents blood pressure.
A widow was bill for an excessive amount and had to fight tooth and nail to get it fixed. Another resident was billed in the $300 for four days. The billing system is a city-wide mess.

Like this comment
Posted by Please please please
a resident of Midtown
on May 31, 2014 at 1:22 pm

Pull-ease someone audit PA Utilities, especially concerning the water bills. There is no way in Hades that we are using as much water as they say we are, or are we using as much gas or electricity as we say. They even called a contracted energy consultant to come out to our house, and he concluded that there was simply nothing more we could do than what we are already doing, and he wrote this in a report to them.

However, they refuse to heed the report and continue to harrass us, even though we have asked them ( three times now) to stop it.

Were it not for the fact that we have to pay capital gains even though we buy another house, we would leave this god-forsaken city.

Like this comment
Posted by Wayne Martin
a resident of Fairmeadow
on May 31, 2014 at 2:37 pm

This audit does not do a very good job drawing a complete picture of the subject under audit--in this case the P/W billing database for refuse pickup. The audit points out that about 625 customer records were not synchronized with the contractor's database (RAMS) .. and that about 30 percent of these customers had incorrect billing that amounted up to adjustments of $175K. Presumably this means that about $600K of billing error has resulted from these errors (over the past three years). The audit does not provide any sense of how long these errors have been in place, or how the errors came to be in the two databases. Presumably, once all of the records with discrepencies are corrected, then the billing errors will drop to close to zero.

The audit does not mention if the errors were in residential, or commercial, accounts--but it stands to reason that residents would be more sensitive to any billing errors that were in the City's favor.

Two questions arise: 1) why did the City require that the contractor keep a synchronized database, 2) how much is it going to cost to actually create a syncronization interface, if this synchronization is really required.

A number of problems found in this audit seem kind of minor. Unfortunately, the audit does not make any effort to indentify the level of effort that might be required to correct these problems.

Another problem with all City of Palo Alto audits is that no one is identified as responsible for the area under audit, or the individuals who responsible for the problems being identified. Sadly, no one is ever responsible for failures of City of Palo Alto systems.

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Posted by Resident
a resident of Another Palo Alto neighborhood
on May 31, 2014 at 2:38 pm

The charge is more like a tax we are forced to pay. We can't alter the amount charged by not putting out our cans when they are only partially full. We can't get a vacation hold. The only choice we have is the size of can - not how much trash we generate.

This needs to be fixed so that we can reduce our tax (oops charge).

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Posted by Carrie
a resident of Downtown North
on May 31, 2014 at 4:23 pm

Bring in an outside agency to run things. Need to get some transparency.

Like this comment
Posted by Terry
a resident of Midtown
on May 31, 2014 at 9:12 pm

I remember when the Palo Alto utility folks were competent, efficient, and effective. Customer service was top notch, as they made you feel that your issue was their top priority.

Wow, things have certainly degraded over the term of the last three city managers. Now, they seem like a band of losers who can't do anything right.


Like this comment
Posted by CrescentParkAnon.
a resident of Crescent Park
on Jun 2, 2014 at 12:16 pm

Terry: >> Now, they seem like a band of losers who can't do anything right.

Hardly losers when they can rip us off without any reaction, and I'd say the whole city is this way if I had to guess. Water, power, cable, internet, infrastructure, libraries, etc.

We, the citizens of Palo Alto are the losers, we don't deserve the rotten management this town gets and the sanctioned rip-offs we have no choice but to pay.

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Posted by Bob
a resident of Community Center
on Jun 2, 2014 at 12:40 pm

My aunt - in her 80's - is really upset. The reading on the water bill doubled for the past bill-period. NO way she could use that much water.

Like this comment
Posted by Dishonesty
a resident of Old Palo Alto
on Jun 2, 2014 at 6:54 pm

I think that the Utility Dept is simply making these things up. They send letters to us claiming that our neighborhood has lots of other households like ours. I highly, highly doubt that there are many other 1700sf houses on a 6000sf lot that house seven people, 3 generations: 5 adults, two children under 3 years of age, the children and grandma home all day. If there are, I high
T doubt they would be as water efficient and electricity efficient as we are: all low-flow faucets, shower heads, toilets; showers taken at the gym, babies not bathed daily, no vegetation in the back yard; drought-resistant plants in the front yard; no flowers or vegetable gardens; laundry is air dried; paper plates and plastic spoons and forks are used--one dishwasher load every other day,,etc.

Every neighbor on our block is complaining about the rude letters from the city telling them they use too much water and electricity, when most of the neighbors are dual income, 0-1 kid, no one home during the day to use all this water and electricity. It must be pure fabrication.

This is blatant dishonesty by the Utility Dept, and they should stop wasting resources printing these fallacious letters!

Like this comment
Posted by Marcia
a resident of Midtown
on Jun 3, 2014 at 1:46 pm

I have to weigh in with the others about inaccuracies and problems with the utilities department. In the past I have gone through numerous employees there who couldn't figure out a very simple problem I had in the past, plus many of them were rude. In fact, all but one were incompetent and rude. And the simple issue went on and on for months. I don't trust them not to make mistakes and lie. They're certainly the beneficiaries of lots of our tax dollars. So far I haven't seen an outrageous problem with the water bill, but it does seem high. I wondered if they were reading the right meter.

Like this comment
Posted by Mr.Recycle
a resident of Duveneck/St. Francis
on Jun 4, 2014 at 2:25 pm

If you think your bill is wrong stop acting like a victim and go check the reading yourself and compare. Odds are it isn't a mistake, it is that you were watering more or using your /a/c moe during the heat wave last month. But even if the meter reader made a mistake (they are human), just call the utility company with the correct meter reading and have them fix it. What isn't helpful is calling and saying "my bill is too high". What do you expect them to do?

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