That they may outwait you, that sooner or later you're going to be gone -- probably sooner -- they're not forthcoming with information, particularly if it's bad news. PGW suffered from, and suffers from, a culture of hiding problems, particularly in the financial area. It's not healthy. I believe that the people responsible just thought that I would go at some point and that they didn't have to -- they wouldn't have to respond. Once the affirmation of my appointment was made and then I started full-time on October 1st, the amount of information we were able to get was vastly different and vastly better than prior to that, because at that point, I was part-time and I was perceived as someone that would not be there.
Your answer, though, leaves me with the impression that you, even though you were in position as far as back as the fall, you have no responsibility until sometime here in October of 1999, because people were either spinning you around or maneuvering around you or not being responsive. Now, I mean, 00046 that's a non-responsive response. What's your overall responsibility in all of this?
I believe I am -- my error was to accept information that I was given without double-checking it, without trying to verify it. I was given incorrect information and told it was true, and obviously, I'm responsible for accepting that. However, we continue to try to --
Did that happen to other people in the company as well?
And is their level of responsibility or error the same as yours?
I think they tried very diligently to get information that was withheld from them. I accept my responsibility throughout the period of time from '94 to today when there were certain errors that have made. I didn't make them, I didn't do anything dishonest, but I can't 00047 say that about other people. But I have to be, perhaps, the easiest guy in the world to lie to, because that's what happened for that period of time.
There are occasions where individuals falsified reimbursement requests so that they would get money that they were not entitled to.
The relocation costs which one individual was entitled to, the cost of the sale of the principal residence which --
I mean, haven't all those issues been the topic of various public hearings over a year or so ago? I mean, we're not back to relocation expenses, are we?
Well, I think we will be next week because the District Attorney has been vigorously looking into this and has been for 13 months.
I'm talking about currently. You made a statement that people have been, I think, dishonest. I'm asking you for current examples of dishonesty.
Oh, in this contract? No, I don't think people were dishonest regarding this contract. I think they believed that if just get a little more done, it would work, and they just kept putting money in it. I don't think there's anything dishonest in the BCCS. I know of no reason to believe that.
Okay, well, that's what we were talking about. I was wondering --
When I asked you, Like what? that's what I was talking about.
Okay. Now, with regard to this security system issue, again, how 00049 does your system allow something like that to happen? How does somebody -- if the allegations are even half correct, how does your system allow a company to pay for something for someone privately at a non-PGW-owned property? How does that happen?
In writing, the CEO at that time authorized the installation of security, $5,000 security systems in the houses of the CEO, the CFO, and the COO. And that authorization was given to the appropriate person who had a contractor go out and do it.
Based on whose request? Who requested that -- on whose advice did the CEO authorize that?
Hang on just a second. I'm sorry. (Mr. Hayllar confers off the record with Ms. Pozefsky.)
I am advised by corporate counsel that the request was made by the Chief Operating Officer to the CEO.
And on whose advice did the COO request the installation? 00050
Was there a recommendation by the security forces at PGW that that should happen?
So the system is set up such that the President or the COO or other high-ranking individuals can, whether or not there was a recommendation -- and maybe there was and I wasn't around for that Q and A or whenever that took place, but again, I guess I'm just slightly perplexed that a system would allow the installation of any equipment or any work to be done at a private residence that's off PGW property.
That's absolutely -- your astonishment is shared by many others. It was ordered, people implemented the order, contractors went out, and in one case, did not put in one system -- but because that system, which was then $7,000, was not to the individual's liking, they 00051 went back and put in a $10,000 system. So now we have the one house with $17,000 worth of security systems in it.
Well, what's the Board's responsibility in all of this? I mean, what's the Board doing?
The Board has responsibility for the direction and the oversight of the company.
Well, if that's the case, then how did these things happen?
Because they were hidden. You can hide an awful lot of stuff from people if that's what you want to do. And that's what they were doing.
Mr. Hayllar, last year when we were here regarding the credit cards and all of that, we talked about, and I believe you testified that you all were going to put in place an internal audit system. 00052
Much of it is. The piece that is missing is the procurement system that I talked about several times. That was not done. But internal audit is functioning, and they are at work. The Treasury Department has been charged with the much more --
Let me just -- see -- I mean, how did the place run before all of this technology came around? And was all of this kind of activity going on? I mean, you can have all the technology in the world; if you don't have written policies programs and some common sense and a sense of ethics about what you do and how you do it, all the computerization and software in the world is not going to help.
The problem was that there was no method in which the people who physically paid the invoices could compare that 00053 invoice to a contract. In fact, over the last three years, the number of contracts that are written, we got fewer and fewer. People had what they called "signature authority," where the boss told you to go buy this and you go buy it.
But let me say, Councilman Nutter, when you talk about ethics and a sense of right and wrong, you're now dealing with the essential ingredient that was missing in a lot of these instances.
Okay. Well, tell me about this: did you get one of the 76ers schedules in the mail?
Now, why are people getting 76ers and Phillies schedules in their PGW bills?
The 76ers -- the large reason is because we want people to look at the stuff that they get in their bill, other than just 00054 the bill. So if you send them something they might be interested in, they'll look through the material in there. There's a newsletter, there's often notices.
I'm sorry. What did you say earlier? If you want people to do what?
I want them to go through the envelope that the bill comes in, other than just to look at the bill 'cause there's a newsletter --
Because there's a newsletter that contains information that's important. We want to increase value of the mailing. We send out a half a million pieces of mail to most residents of the City every year, and that's of value, and I'd like to enhance it. In the case of the 76ers schedule, that has our logo on it, which is a form of advertising, and people save those to have the schedule. The ratepayer did not pay for that. It was done -- the printing was done at the cost of the 76ers. We simply stuffed it for them and sent 00055 it out. So it was no cost to the ratepayer.
Those who are 76ers fans have, as many of us do, a schedule sitting on their desk or their bureau with the games, and it's a value to the company in that there is a logo on it PGW. It's to replace in small part --
Do you really think somebody's going to forget about PGW? (Unintelligible; parties talking over each other.)
I don't think 500-and-some thousand ratepayers are going to forget about PGW.
But I'm still perplexed to understand the connection between that and what you do and what your core business is, or with the Phillies earlier this year. 00056
I wrote to Mr. Driscoll about it; he chose not to respond to that letter back in August.
Yes. There is a few thousand dollars for the printing cost. Now, the 76ers --
Well, don't you have a fairly serious financial situation?
Yeah, but we also have a budget for advertising, and it came under that.
And the value to mailing the Phillies schedule was what?
Same thing. It's advertising, it's something that has a long shelf life and people keep it, and it's something nice to give to the customers. 00057
Maybe we should let the Phillies and the Sixers worry about getting their schedules into people's hands and not through PGW, since it's fairly clear that you have enough trouble getting the bills right, getting them out, running the company. It might be a little less to worry about who has what schedules. I mean, have you ever gotten any complaints from PGW customers that they don't know when Phillies or the Sixers are playing?
Well, people will thank you for virtually anything for free. I'm talking about doing what you do and trying to do that well before you worry about advertising.
Thank you, Madam Chairperson. 00058 Mr. Hayllar, you said there's 500,000 PGW customers?
There's about 512,000. There's about 487,000 that are residential.
487 residential. Of that 487,000 residential, how many currently are on automatic meter-reading?
Dennis Stinson runs this program. Instead of him whispering in my ear, I think it would be helpful if he answered.
So it's 75 percent 22 outstanding commercial customers. 23
And commercial 25 customers generally aren't the problem. It's my 00059 understanding that it's the residential readings that are the most problematic.
The residential readings are often the most difficult to get into, yes, sir.
We are actively working, though, on completing the commercial-industrial customers with the AMR device.
The 80 percent residential customers, their bills are based on the drive-by with the computer?
Of that percentage, of that 80 percent, can you give me a general percentage as to what you think are bills that are incorrect out of that grouping? Or are there --
My understanding is that if we have an AMR read in the current month --
If we have an AMR read in 00060 a current month for that customer, they get accurate an accurate bill, if there's nothing else wrong with the bill process.
It's the customers who get an estimated bill for some reason that seem to have the biggest problem with getting a bill.
So during the summer, Councilman, there was a period when the Itron units were converted through Y2K, and for one month, some of the automatic meter reads, the one that we assumed were accurate, went out inaccurate, and it had something to do with the Y2K patch that they put. We are unaware of that problem reoccurring on AMRs.
So how many incorrect bills were issued relative to the Y2K patch on current AMR customers?
Okay. I mean, do 00061 you have any idea as to how many calls came in on that one glitch?
Could we find out how many people were affected that -- so I understand, basically, you're saying that of the 80 percent of the people who are currently under AMR, it's very unlikely that they're going to have a problem with their bill.
But there was a short period of time where, because of this Y2K patch, there was some little problem.
So we're talking basically here about the percent who are not 19 AMR, who are getting estimated bills that are 20 incorrect?
Of that group, 00062 isn't there a history of gas usage for those customers? I would think that many or all of those customers have not been on this system for less than a year, that there have been years of prior usage that you could compare to in order to determine what it was they used in February of '98, you know, in December of '97, March of '96, in order -- so that the comparison could be made that we're not that far out of whack, so that people aren't getting 0 numbers or $640 numbers, that in some way, we have a history of the people who have paid their bills on those residential properties over the past, say, 10, 15, years. 15
That's correct. The 16 problem is the volume of bills that got out each 17 night. For each cycle, there's about 22,000 18 bills, and you cannot manually go through all of 19 them to find those errors. What we have been 20 installing in the last month is a quality-control system that, in fact, eyeballs every bill, and that's how we've been catching them.
But can we not segregate the AMR bills? Of that 22,000 per month, a certain percentage are AMRs, a certain 00063 percentage are non-AMRs and estimated. Now, of the people who have actual readings, not AMRs, they are accurate, generally?
Okay. So we're even talking about a smaller pool of people. Of that 22,000 per month, we should be able to segregate which of those are non-AMR-estimated people.
We are now trying to do that. We are today testing a system that the vendor has put out, that would pull out the estimate reads so we that would send out the correct AMRs and then correct the problem with estimation. You are correct.
For how many months have we experienced this glitch, or large glitch, of incorrect estimated bills?
Well, I guess my question is -- and, again, I mean, hindsight is 20/20. Why not in August or September had we not said, you know, in order to be safe for both the company and the customer, let's pull those people 00064 out and look at what they paid in August or September of last year or the year before and bill 4 them based on that, because it's probably going to be about the same amount of money anyway.
You are correct. That should have been done. Once Ram Technologies got into the system and began to understand it and once these other areas were fixed and we began to see these principal problems then, we were able to do it.
Now, I haven't been -- I'm not on the Commission, and I haven't been in the midst of this. The company who did the AMRs Itron, correct?
And the company who handled the computer system is BCCS?
And they were separate from the contract with Itron. 00065
So the Itron contract is over here, and this $25 million is for the --
Okay, okay, fine. Now, is there any form of audit that's going on now as it relates to the BCCS contract, as it relates to the problems that we've experienced with some of the executive expenditures that have caused and created so much controversy? Are we not -- either the City Controller or an outside auditor or the Inspector General or someone taking a look at this entire contract, what was billed, what was paid, who it was paid to, and what the purpose of the billings and invoices were?
I believe the District Attorney is doing that as part of that investigation.
I believe so. Secondly, we have charged Ram 00066 Technologies to a forensic audit of everything that took place in the past. Their principle goal is to get it stabilized and fixed, but they're going back through the history of the contract as well.
Ram Technologies is a local organization that's been used by the City in a number of areas with Myra Management. Water billing was one of them. They have five people on site full-time.
All right. And what's the level amount of that contract?
Each for $200,000. One is in the City Finance Department, and that is the area dealing with the forensic audit of what's happened simply because -- 00067
And that's because that's inappropriate for the owner to deal with. The other piece is a PGW contract, which is for the remediation and the stabilization of this system.
Okay. Now, will we potentially be considering any legal action against the BCCS vendor and/or those executives that have since been dismissed as a result of the trying to recoup some of the monies that obviously were clearly improperly spent for personal reasons; and, secondly, potentially improperly spent as it relates to the administration of the BCCS contract?
Yes, on both cases. On the second question, the District Attorney has asked -- she asked as of last February for us not 00068 to proceed with civil matters until the criminal investigation was over with. But once that is done, we are prepared to do that.
Is the vendor of the BCCS contract part of ongoing criminal investigation?
We believe the DA has looked at that contract, but that decision -- we don't believe that request pertains to the vendor, and we are looking at the vendor's responsibilities in this problem very strongly.
Now, let me ask you a question. I mean, the District Attorney's Office is a tremendous office and they are very hard-working people, but do they have the capacity to delve into this issue, into the minutia that's there in an effective way? And, again, this is not to denigrate the DA's Office because they do a great job, but is this not something where we would perhaps need an outside inspector or investigator or investigation group, perhaps even 00069 from a governmental agency or from some other? I can't believe that the DA's Office has enough time, considering the workload across the street, that they have enough time to look at this.
They have hired a number of consultants to assist them, and throughout the investigation, they have utilized the resources of the City Controller's Office. And I know they've retained consultants to assist them in a number of areas. And, really, that's as far as know of what her resources are.
Okay. Let me ask you, what's the average amount of time right now for the phone to be answered for a service call?
It depends on the day. Fridays are better than Mondays. On average, I would guess -- and I'll ask Al to correct me if I'm wrong. On average, I would guess that it's about five and a half minutes, unless we're being absolutely crushed.
Well, let me go 00070 back and ask you how many rings there are before either a person or the automatic -- or the automatic answering machine picks up?
That part is almost instantaneous. It shouldn't be a lot of rings. Then you get into the system, and then after a while, you get to listen to our music.
All right, but we don't know exactly the number -- the amount of time. And I'll give you a good example. I'm on the Board of Blue Cross. And one of the things that the Board discusses every month without fail is a report on the length of time it takes for someone to pick up that phone and begin interaction with the customer.
I need to know, and I think if we don't know -- one of the our problems is, we need to pay more attention to that issue, and I know you've talked about paying attention to it, but if we don't know how much time -- and they know over at IBC and other companies like that, they know down to the second it takes on average for someone to be interacting 00071 with that customer.
We know. We have that data. It changes on a day-by-day basis. I gave you, I think, a typical response right now. The other big number we look at is the time it takes our people to dispense with a call, the talk-time number, which has been coming down, which is good. And those reports are produced on a daily basis in 15-minute intervals.
Well, yesterday, we had 12,000 -- no, we had 12,000 billing calls and about 2,500, 3,000 service calls yesterday.
All right. On the service calls, what's the average number of days it takes to respond to the service request?
This morning, it was either the same-day or next-day service, depending upon how early you called.
And the warm 00072 weather had a lot of things to do with, I guess, billing, collections, revenues, lots of problems.
It's not all wonderful things at PGW. The weather has a lot to do with it.