The company that created the Sewerage and Water Board’s new billing system, the Cogsdale Corporation, apparently wasn’t informed about rampant billing problems until they read about it in the newspaper, a Cogsdale official told the New Orleans City Council’s Public Works Committee on Monday.
“We’ve never had a straight crisis contact with S&B at any time,” said Judy Wells, Cogsdale’s director of professional services.
The new system was launched in October 2016. Since then, thousands of New Orleans customers have reported errant bills, including some high-profile cases in which customers were charged thousands, or even tens of thousands, in a single month.
Wells said that Cogsdale wasn’t formally notified about the problems until June 28, 2018, when the City Council sent a request for information regarding their contract. The problems with the billing system first emerged more than a year earlier.
“The Sewerage and Water Board and Cogsdale have been working together on a series of adjustments to the billing system since at least March 2018,” said communications director Richard Rainey in an email on Monday.
He did not explain the discrepancy between the two accounts.
At Monday’s Public Works Committee meeting, the City Council had its first chance to directly question representatives from Cogsdale. They were once again attempting to get to the bottom of what went wrong with the new billing system.
“Have you installed this in other cities and seen similar issues?” Councilman Jason Williams asked.
“No. We have over 200 customers, and we’ve never seen issues to this extent,” Wells said.
In May, Marcie Edwards, the former interim director for the Sewerage and Water Board, partially ascribed the billing system’s erratic charges to inadequate training. Board member Tamika Duplessis repeated that in a July letter to the council.
But on Monday, the Cogsdale representatives insisted that the training program was sufficient and in line with what they’ve done in other cities. Cogsdale’s Vice President of Customer Support, Todd Ohman, noted that the Sewerage and Water board even won an award for their implementation of the new system.
Wells said that by the time the new system went live in October 2016, Cogsdale had trained 155 employees on how to use the system. She said that training consisted of “two days of hands-on training with a Cogsdale instructor, and then practice labs where students were encouraged to go into the lab on their own and practice.
She also said that Cogsdale remained present for the first three months that the new system was online, and that they did not witness the billing issues that have emerged since.
“You want to see five percent or less of incorrect billings,” she said. “In the October to May period, less than five percent of bills were inaccurate.”
By May 2018, Edwards told the board of directors that 7.5 percent of customers had filed complaints about their bills.
Wells also told councilmembers that Cogsdale’s software automatically flags potentially inaccurate bills by comparing them to the previous month. For councilmembers, the question remained: if the software and training weren’t the problem, what was?
“What do we think makes New Orleans special in terms of not being able to implement this system and make it work?” Williams asked.
Wells said that there was one issue with their software that they were currently working to fix. She didn’t specify what that problem was.
But she emphasized that a high turnover rate at the utility has most likely led to a lower number of employees who understand the system. Edwards had also identified this as a problem. Wells said she didn’t know how many of the original 155 trained employees still remained at the Sewerage and Water Board.
Also at Thursday’s meeting, questions arose about how much the new billing system cost. This summer, then-Sewerage and Water Board Chief Financial Officer Marina Kahn said that the new system cost about $10.2 million. In her July letter, Duplessis said that Cogsdale only received $6.5 million — $4.8 million for the billing system and $1.7 million for a new payroll system.
But today, Wells told councilmembers that Cogsdale only charged approximately $3 million for the billing system.
Beyond the disputed cost of the system itself, the utility spent additional money for new hardware and outside consultants related to the Cogsdale contract. Texas-based TMG Consulting was brought on as the project manager for the new billing system, said Councilman Joe Giarrusso.*
Rainey did not immediately provide the contract between TMG and the Sewerage and Water Board.
Some councilmembers questioned why TMG didn’t ensure that the system was running smoothly.
“Overall, when it comes to the project manager, they’re the ones in charge right?” asked Councilwoman Helena Moreno. “Maybe it wasn’t all the way to $10 million, but people made a lot of money. And we need to ensure that if they were paid a lot of money to manage these projects, that they’re done correctly and these consulting groups are held accountable.”
Councilman Giarrusso said he was still unclear who was ultimately at fault. “Was it past management [at the Sewerage and Water Board]?” he asked. “Was it TMG? Or was it both?”
He said that first, the City Council had to stem the flow of inaccurate bills. Then, they could focus on who was responsible.
*Correction: The contractor that worked on this project is a Texas-based firm named TMG Consulting. This story originally misidentified the contractor as another company, based in New Orleans, that is also named TMG Consulting and has also done work for the Sewerage and Water Board.