Cash-strapped Chicago has millions of dollars trickling through its fingers — literally.
That’s the troubling bottom line of Inspector General Joe Ferguson’s latest audit.
At a time when the city needs every dollar it can get to solve a $30 billion pension crisis, Ferguson concluded that Chicago lost $3.9 million between June 2008 and December 2014 because the city failed to charge for water used during new construction of privately-owned buildings.
As a result of the audit, the Department of Water Management says it will change its policy and will require that a water meter be installed at the time a city water main is tapped.
The quick reaction pleased Ferguson. So did the fact that the audit found that the Department of Water Management already kept a complete inventory of accounts and was uploading all meter data into its billing system.
“With a large and complex operation such as the provision of water service by a major municipality, the question is less whether there are opportunities for improvement, but how leadership responds when and where opportunities are identified,” Ferguson was quoted as saying in a press release.
“We are therefore especially pleased to report that both [Water Management and Finance] have been quick to analyze their practices and respond to recommendations from this audit. I encourage [Water Management] to continue its work to bring non-metered water service accounts up to date with modern urban infrastructure and technology.”
Earlier this year, Ferguson accused Mayor Rahm Emanuel’s Department of Streets and Sanitation of spending millions of dollars to provide free garbage collection to ineligible multi-unit residential buildings and to nonprofits whose garbage freebie was never authorized nine months after vowing to trash the perks.
The inspector general further revealed that Emanuel isn’t squeezing the maximum savings out of his decision to switch garbage collection from a ward-by-ward to a grid system because of outdated performance standards, inadequate record-keeping and an inaccurate count of the number of households served.
Last week, Ferguson’s target was the disposal of non-hazardous waste from city infrastructure projects.
He concluded that contractors working on Chicago infrastructure projects are dumping construction waste at unauthorized disposal sites and pocketing city payments specifically earmarked for proper waste disposal because of inadequate enforcement and a “culture of non-compliance that may extend to hazardous waste.”
The new audit targets a Department of Water Management at the center of the Hired Truck and city hiring scandals that is now engaged in a massive overhaul of the city’s aging water system.
The capital program is bankrolled by Emanuel’s plan to nearly double water rates over a four-year period with annual increases after that tied to the rate of inflation.
Although Ferguson was pleased with the quick response, his audit uncovered revenue leaks beyond the $3.9 million lost to construction of privately-owned buildings.
Other findings include:
- Water Management violates city code by providing non-metered water service to non-residential buildings and residential buildings with three or more units.
- The department failed to bill and/or collect $330,981 from 26 accounts incorrectly coded as inactive or permanently removed.
- And the department charges a lot less for hydrant permits than it is allowed under city code — about two-thirds less.
- Also, it has waived fees even though such waivers “are not expressly authorized” by city code.
In its response, Water Management stated that it no longer issues fee waivers for temporary water use and “commits to improving its overall fee structure for hydrant use in coordination with City Council.”