City Auditor presents Hamilton Water Meter Program Audit

HAMILTON, ON – The Office of the City Auditor presented a Hamilton Water Meter Program Audit to assess the efficiency and effectiveness of water metering and billing processes at the City of Hamilton in comparison with industry best practices.

The Office of the City Auditor (OCA) engaged the services of a third party, BDO Canada, to conduct the audit, while maintaining oversight. In addition, the OCA completed some additional analysis with respect to the Water Billing Transition Project. 

Key themes addressed in the audit include issues with resource management, procedure and policy framework, program reporting and metrics, proactive maintenance, work order management, contract management, corrective action for the 2021-22 billing issues, and data transfer and reporting.

As part of the audit scope, the following findings and areas for improvement were identified for the Hamilton Water Meter Program:

• The Program has a strong procedure framework which clearly defines program roles and responsibilities in place, however, some policy and procedure gaps were identified.
• Staff turnover and vacancies have strained Program operations.
• Hamilton Water has begun to adopt a data driven approach to program management and oversight; however, data insights and key program performance metrics require enhancement.
• The City has an effective proactive maintenance program in place for large meters, as well as pilot projects to test new meter technology to evolve the program and align with industry best practices.
• The Program has implemented preventative and corrective actions that address the identified root-causes of the 2021-22 large billing issues. However, there are gaps in the City’s root-cause analysis that should be addressed to increase the effectiveness of these actions.
• Data transfer and reporting between Hamilton Water and its contractors is highly manual, resulting in operational inefficiencies.
• There is no established contractor performance management framework and there are limited contractual mechanisms for managing and overseeing the performance of the City’s outsourced billing agent.

The audit made nine recommendations to address the above findings. Management will be taking action to address all of the recommendations.

In addition, the OCA recommended the transition project incorporate formal risk assessment methodologies as part of its project management approach.

The OCA launched an independent audit of the Water Meter Program following several significant events since 2019 impacting the program’s effectiveness; Hamilton Water leadership requested an audit. The Audit was conducted in addition to the analysis and preventative and corrections actions implemented by both the City and Alectra Utilities.

Quick Facts

• Hamilton Water is responsible for the City of Hamilton’s Water Meter Program, which includes the installation, testing, monitoring, repairing and replacing of approximately 156,000 revenue water meters.
• The Water Meter Program is intended to ensure the efficient, timely and accurate metering and billing for water that is used by the City’s customers and generates approximately $240 million in revenue each year.
• The City of Hamilton has two contractors who are engaged in the delivery of the Program:
  • Alectra Utilities Corporation, who provides meter reading, customer service, reporting and billing services on behalf of the City, through the City’s Finance Division, Corporate Services Department.
  • Neptune Technologies, who provides meter operations services to the City, including but not limited meter installation, meter repair, and preventative meter maintenance, through Hamilton Water, Public Works Department.
• On August 6, 2021, the City was advised that Alectra would discontinue water billing services for municipalities. Alectra has committed to working with the City of Hamilton to provide customers with a smooth transition through to their contract expiry on December 31, 2024.