Office of the Controller - City of Houston, Texas. (COH)

NEWS RELEASE OFFICE OF CITY CONTROLLER CITY OF HOUSTON

FOR IMMEDIATE RELEASE

August 09, 1999

Contact: Sharon Adams
(713) 247-3152

CONTROLLER'S AUDIT REVEALS POTENTIAL $730,000 FOR CITY COFFERS

City Controller Sylvia R. Garcia today released a Utility Financial Audit that identified potential recoveries of $318,000 in electricity and natural gas billings to the City of Houston. The audit also revealed opportunities for reducing utility costs that could save the City approximately $312,000.

Auditors examined the processes related to Reliant Energy's electrical and natural gas billings for eight City buildings - the four terminals at Bush Intercontinental Airport, City Hall and the City Hall Annex, Kelley Service Complex, and the Waste Management Offices located a the Southwest Freeway and Loop 610. They found:

Potential overpayments of $270,000 in natural gas billings due to the improper application of contracted rates, and
Potential electrical overpayments of $48,100, also due to the use of incorrect rates in the billing process.

Auditors identified several opportunities to reduce costs by:

Consolidating meters on electrical bills, with a possible saving of $259,000 annually, and
Determining whether purchasing gas on the spot market could reduce the costs of natural gas purchases for certain facilities. By converting some accounts from contract to spot gas purchases, the City could save up to $53,000 annually.

Auditors also found that another $100,000 annually could be saved if the City managed the purchases of natural gas without using a broker. Together, the auditors' recommendations. Controller Garcia encouraged them to pursue the recovery of the overbillings and to address the cost saving measures.

"I am pleased that we have been able to identify these savings for the City and that City administrators have incorporated our recommendations into their operational processes," the Controller said. "Working together to increase efficiency and protect the taxpayers' dollars is what the audit process is all about."