City overpaid its BGE bills by $200,000

Audit uncovers charges for buildings not in use

May 16, 2002|By Laura Vozzella | Laura Vozzella,SUN STAFF

The lights have been off at the Kurt L. Schmoke Conference Center at the Peale Museum since it was dedicated in December 1999, in the waning days of the Baltimore mayor's 12-year tenure.

But the electric bills kept coming -- in spades -- and the city kept paying.

The same is true for more than 60 other buildings that the city owns but has not used for months and in some cases years.

In all, the city overpaid Baltimore Gas and Electric Co. by about $200,000 over a 13-month period, according to a city Department of Audits review presented to the Board of Estimates yesterday.

The city has recovered the money from BGE, but it needs to keep better track of the 848 utility bills it pays each month, Comptroller Joan M. Pratt said.

"We get a bill sent to accounting, and they just pay it," she said. "Often the city will sell buildings and the gas and electric is not transferred to the owner's new name. ... I think the key is to have someone monitor these bills."

One reason for the bills is the city failed to cut off service. And because the buildings were vacant, with no one around to let meter readers in, the city's bills were inflated -- based on previous use, which was much higher than when the buildings sat idle.

In some cases, officials said, the city has sold property but kept footing utility bills by mistake.

Fraction of utility costs

The overpayments represent a fraction of the city's utility costs. The Bureau of Accounting and Payroll Services (BAPS) writes checks for more than $37 million a year to BGE.

That figure does not include schools or the Housing Authority of Baltimore City, whose utility bills are not handled by the bureau.

"BAPS believes that it does not have the staff necessary to review the bills each month (approximately 800 bills)," City Auditor Yovonda D. Brooks stated in her audit. "Consequently, BAPS relies on BGE to correct any billing errors."

Brooks' audit recommends that the city tighten its procedures with the most basic of financial safeguards: reviewing bills before paying them. It also suggests flagging any bills that are based on estimates, instead of meter readings, for two successive billing periods.

The city does not always want to cut off utilities when it vacates a building, particularly if the property is for sale, Pratt said. But she said the city should notify BGE when a building is sold or is going to be vacant for an extended period, as was the case with the Peale Museum.

One building: $59,774

Overpayments for that building were $59,774 -- the highest of the 62 buildings where problems were found.

The Peale is an ironic spot for a utility problem: The Holliday Street building was one of the first in the nation to use gas lights. It was built as a museum in 1814 (and lighted up two years later) by Rembrandt Peale, a founder of the Gas Light Co. of Baltimore, a forerunner of Baltimore Gas and Electric.

The building has had many uses since then, serving as City Hall for more than 40 years in the mid-19th century, opening as Baltimore's first public school for African-Americans in 1876, and later housing a municipal museum and a Baltimore City Life museum.

Under Schmoke, it was renovated to create a conference center with meeting spaces for City Hall staff and the public. But city officials say the building has not been used, in part because it is not accessible to the handicapped.

The overpayments came to light after a city employee who was aware of the problem came forward, prompting a review of bills paid between July 2000 and August 2001.

BGE had not been aware of the overpayments until the city contacted the company, said Jessica Brown, a company spokeswoman.

Normally, if a meter reader is not able to gain access to a meter for seven consecutive months, BGE will try to contact the customer, she said. But sometimes that does not happen.

`1.8 million meters'

"We can only make so many efforts if we're not able to get in," she said. "We read 1.8 million meters a month. If people are paying the bills, it's not red-flagging us that there's a problem."

Brown noted that bills that aren't based on meter readings are clearly identified as such.

"It's stamped on them, `This bill is estimated,'" she said. "You can't miss it."

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