On November 20, 2019

Rutland city surprised after water billing vendor folds

By Ed Larson

The company contracted by Rutland to do electronic water meter billing for the next 15 years has notified Rutland and approximately 30 other communities that they are shutting down and terminating all existing contracts.

FATHOM Global Water Management notified the cities and towns it serves with an email on Tuesday, Nov. 12, stating the company could not find adequate financial resources to continue in operation.

FATHOM was founded in 2009 as a privately owned utility billing system, with locations in Phoenix, Arizona and Austin, Texas, with 87 employees.

City officials met in an executive session of the Public Works Committee  to discuss potential litigation against FATHOM.

City officials are reluctant to speak out about the situation.  Public Works Committee chair Paul Clifford, a former public works commissioner in Rutland City, said he cannot comment at this time due to possible legal action. Requests for comments from several other aldermen were not returned.

An email from FATHOM to the city states the company was having difficult times in obtaining adequate financing, but that statement differs from what the public works committee was told in May of 2018.   Public Works Commissioner Jeffrey Wennberg stated that FATHOM offered extensive customer service and financing.

FATHOM was hired to manage the city’s changeover to smart meters and the subsequent billing once complete. Vermont law prohibits water meter installation or adjustments to be done by public works employees.

Wennberg stated that FATHOM was the only vendor to bid on the contract and the Public Works Committee voted unanimously to recommend the full Board of Aldermen approve Mayor David Allaire to sign the 15-year contract.

Installation of smart/wireless metering has helped to correct noticeable errors in the billing system as well as detect potential leaks in water mains.  Users can also track their billing and water usage online.

The city has been working to replace some 6,245 meters and according to the public works commissioner, savings to Rutland City would be estimated at $737,000 a year.  According to the contract, FATHOM would have annual payments of $617,000.  Also added in would be just under a quarter million dollars in startup costs.  Thus, potential annual savings to the city of Rutland was estimated to be around $120,000 annually after the first year.

Wennberg had stated that first year savings would essentially cover the start-up costs, as certain lease payments to FATHOM would not take place until the second year of the 15-year contract, according to an article in the Rutland Herald May 31, 2018.

Mayor David Allaire said on Friday, Nov. 15 that the news came as a surprise and officials are working on immediate solutions.  In an earlier news release Allaire pointed out that the city might have to go it alone and return to an internal system rather than third party vendor system. He explained that the changeover is 85% complete and that DPW has already taken responsibility for the remaining installations.

Several communities around the country had already ended contracts with FATHOM over consumer complaints dealing with billing, metering problems and customer service attitude.

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