Billing Application Drains City Utility

City officials in Ann Arbor, Mich., estimate that trouble with utility billing software caused the city's water department to underbill customers by $2.8 million.

The city's Water Utilities Department implemented a software package from Aquilium Software Inc. in Mississauga, Ontario, in June 1998. Since then, the city has had several problems, said city Finance Director Dean Moore.

In one instance, the Windows NT-based system was misunderstanding an early payment incentive and giving some of its 34,000 customers a credit they didn't deserve, he said. The package also misapplied to commercial accounts a summertime billing policy that holds down costs for residents. The city has been working with Aquilium for months to upgrade the software, but the process has been very slow because the vendor has been able to provide staff only intermittently, said Moore.

Aquilium Executive Vice President Chris Gadula said he first learned of the complaint in Ann Arbor - which has commissioned a formal audit from a Big 5 accounting firm - from a report in the local newspaper last week. "When we read it, we were shocked," he said. Gadula said the company's software is running well in numerous cities worldwide, including 30 in the U.S.

Greg Galluzzi, president of TMG Consulting Inc. in Austin, Texas, confirmed that Aquilium's software doesn't generally inspire complaints but added that it might still need to mature. He said Ann Arbor's summertime billing policy is common among utilities and often requires packages to be customized. When small cities have trouble with billing software, he said, it's often because neither the city nor the vendor has had adequate resources to test the systems thoroughly.

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