LADWP Says Billing Issues Resolved By Year-End

LOS ANGELES — The Los Angeles Department of Water and Power doesn't expect to completely work through problems associated with a new computer billing system that resulted in revenue shortfalls until year's end.

That is what Phil Lieber, LADWP's chief financial officer, told municipal professionals gathered at Paramount Studios' Globe Theater Feb. 27 for the Los Angeles 2nd Regional Investors Conference.

LADWP has been hammered for billing issues that resulted in some 70,000 customers receiving incorrect or late bills since the new computerized billing system was launched in September.

Compared to others who have undergone the process, the public utility's process has been relatively smooth, Lieber said.

"The new billing system replaced a computer system that was 40 years old," Lieber said. "I don't know of any large software projects that have gone perfectly. This has gone well, but it could have gone better."

Revenues for the city, wastewater and Los Angeles Department of Water and Power have been impacted by a decision to not pursue collection actions that could include shutting off water and power to customers who aren't paying their bills. Based on recommendation from the city attorney, LADWP hasn't pursued collections while it works out the kinks in the billing system.

The city attorney told LADWP to make sure not to cut someone off based on an incorrect bill, Lieber said.

The billing issues have resulted in a $13 million shortfall on the city's utility user tax based on past projections, according to Miguel Santana, the city administrative officer.

Lieber said the utility's revenues are down 9% from projected revenues across all the services it bills for including the city's wastewater program, a department separate from LADWP.

He expects that LADWP will have worked out all the wrinkles and will be able to return to normal collections by the end of the year.

"There may be some lags in cash flow, but it will be corrected over the next several months," he said.

LADWP, which has $11.1 billion in outstanding debt combined for its water and power system, is underway on a $8.9 billion capital improvement program.

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