Who is Water Company of America (WCA)?
     Headquartered in Houston, Texas, ISI Water Company has served public agencies since 1989 by      providing a unique program for revenue recovery through the meticulous evaluation of an entity’s utility      billing system to find lost revenue. The company continues to be known as Water Company of America      (a registered name) because of national name recognition and existing contracts.

  What services does WCA offer?
     WCA’s sole focus is to provide a program for the recovery of lost revenues for public utilities around      the country. WCA does not provide other utility engineering or management services. With an      established track record, WCA stands ready to provide this specialized service to your utility.

  How does the program work?
     Through the use of a Proprietary Software program developed by WCA along with the deployment of      experienced WCA field crews for on-site investigation, we provide a full service evaluation of your      billing records to determine if there are water, wastewater, stormwater (or other) accounts that are not      being billed accurately. This is a performance based contract, meaning that WCA’s sole compensation      for its efforts in finding this lost revenue is to receive a share (typically 60%) of the increased revenue      resulting from the correct billing of these deficient accounts (this must be actual new revenue received      by the utility) for a 36 month period. The utility retains the balance of the new found revenue. After the      revenue sharing period is complete, the utility keeps 100% of the new revenue, and the utility has no      further financial obligation to WCA. Through this approach, the utility does not have to take on the risk of      paying WCA large fees if it turns out that few billing deficiencies are found as a result of the program.      In other words, WCA takes the risk for its costs through this contingency-based form of compensation.      This all is accomplished with minimal time required on the part of your billing staff.

  Why the performance fee-based method of payment?
     History has shown us that this approach is the fairest and most readily accepted method for      compensation to WCA for services provided. Your utility does not pay WCA unless we produce      increased revenue for you; our fee structure compared to the approach of your paying us whether or      not we find any deficient accounts does seem to be in your best interests. Clearly, it “incentivizes”      WCA to do a most thorough analysis of your billing records to maximize revenue recovery. And      remember, at the end of the day, the utility keeps a share of the recovered revenue for the 3 year      period and 100% after that.

  How is WCA paid if no problem accounts are found?
     WCA will not be paid; that is the risk WCA takes. Remember, WCA only receives compensation when      revenue is actually recovered by the utility.

  What if a lot of problem accounts are found, isn’t WCA going to reap a windfall?
     It is safe to assume that the more accounts found by WCA, the more revenue will be generated. But      one must also understand that the number of accounts found is directly proportional to the amount of      effort and thus cost invested in the project by WCA. Therefore windfalls do not occur; rather you      benefit from an equitable performance fee structure. Also, remember, this increased revenue will result      from charges to customers that previously were not paying for service received. Had WCA not found a      specific deficient account and recommended corrective action, that misbilled account might have gone      on for some time; resulting in an inequitable situation among all of your customers.

  What if one big account is found that results in WCA getting a high payment, is this fair?
     It is true that the larger accounts do bring in more revenue to both WCA and the utility, but for every      large discovery, it is necessary to investigate a whole lot of accounts, both large and small, that turn up      nothing. In our years of experience, we have learned to anticipate the rare large discovery; and depend      upon it to offset the multitude of “dry holes.” Therefore it is very fair.

  In a nutshell, describe how the program works.
     a.  WCA uses a proprietary software and technique to analyze account data. Developed through            experience; proven queries, sort routines and comparisons of like customers identify potential            problems such as:
                  Unbilled or Misused Fire Service
                  Account Coding Errors
                  By-passed or Malfunctioning Meters
                  Unknown Sewer and/or Water Connections
                  Rate Discrepancies
                  Stormwater Misbilling due to Errors in Impervious Area
     b.  Once WCA determines that an account's consumption and/or billing data is not consistent with           certain norms, that account is selected for additional research. After careful review of a given           property, if it still appears that the billing and/or consumption do not meet certain criteria, WCA then           physically researches that given property.
     c.  After completion of the field inspection, if additional sources of revenue have been discovered,           formal documentation on this “Find” is submitted to the utility for billing changes and/or physical           corrections.

  Define a “Find.”
     A “Find”, in WCA parlance, is an account that requires corrective action on the part of the utility for      appropriate billing to occur. This account has been through a full field investigation and has been      shown to be defective in some manner. Each “Find” will require sign off by the authorized      representative of the utility before it moves forward.

  What information does WCA need from us? How much effort and/or ongoing commitment      will be required from our Information Systems Department to support this program?
     In essence, all WCA needs is a monthly download of “raw unjoined data” from your utility billing system.      WCA performs the data analysis. Therefore a very small commitment is required from the IS      Department.

  There is a concern about an outside party (WCA) having direct access to our utility billing      system - security issues being of paramount importance. How do you address this?
     WCA does not need nor will it ever request anything more than “read only” access.

  We have limited staff in our billing section who are fully involved in their “day to day”      activities. I am concerned as to what additional workload might be brought upon them as a      result of WCA’s program. We don’t have time to complete our current assignments, much      less tend to yet another contractor. How much staff time would be required by WCA for      this program?
     Very little staff time would be required on your part. WCA provides all manpower and equipment to      carry out the program. WCA would need 1 – 2 hours per week on the part of your authorized      representative to review progress to date; to approve whatever “Finds” that WCA might have      discovered; to coordinate the implementation of corrective action and to review monthly calculations of      new revenue.

  When does WCA get paid for its work?
     On a monthly basis, generally. Perhaps on smaller jobs the requisitions might be less frequent, but that      will be agreed to up front.

  What about “backbills?” Does WCA share in these recovered funds?
     Yes. WCA would share in any revenue recovered through backbill during the 36 months.

  Our utility, as a matter of policy, does not do “backbills.” Is this a problem with WCA?
     This is not a problem, we follow your policy. If your utility does not backbill, then we accept that. We      might encourage backbills in certain cases involving theft of service, but we will work within the rules      that you have in place.

  What controls will our utility have over how the program is conducted – more specifically      what authority will we have on approving the “Finds” submitted by WCA and also the      calculation of the monthly payment to WCA?
     Each “Find” must be approved by your Project Manager. WCA is eligible to share in new revenue only      on accounts that have received written approval signature. Further, once the Finds are approved, the      utility representative will have full approval authority over the calculation of any new revenue. In this      way, the utility basically has total control over how the program will progress from a financial      standpoint.

  Who calculates the “Increased Revenue?” Describe how the different forms of “Finds”      would be handled in this regard.
     WCA prepares the detailed line item report that quantifies Increased Revenue. There are many types of      “Finds.” Each is evaluated to measure the benefit to you as a result of our work. Clearly if the service      was completely unbilled in past, all new revenue from this account will be used in the calculation. If the      billing deficiency resulted from a bad meter, the increase is defined as the difference between a      historical average and actual collected amount(s). In any case, your Project Manager approves the      calculation; therefore you are protected.

  There is a concern that WCA will try to claim “new revenue” on problem accounts that      have just come on line. Many of these problems would have been found by our own billing      staff, and we feel that WCA should not reap the benefit from these newer accounts. How      does WCA address this concern?
     The agreement language is clear, new problems and known problems are hands off for a period of time      that is determined by you. Our mission has always been to find the old, chronic conditions, not the      situations you correct in the normal course of your business. That is our specialty.

  What if a customer has a significant change in consumption during the 36 month payment      period?
     In some rare cases, a material change in consumption will occur, either up or down. When it declines,      or the customer closes the account, then there is no increase for that period and WCA receives no      payment. Likewise a consumption increase results in more increase revenue.

  We have billing staff whose job it is to find and correct account problems. Why do we need      Water Company of America?
     We look upon our efforts as a supplement to your staff, not as a replacement for it. We know from our      broad experience that your billing staff knows their system better than we do as we enter into a      project, and it is important for us to proceed in partnership with your billing people to make a successful      project. Because our total and clear focus (and experience as well) is to find lost revenue, we can      bring our specialized talents to your utility for what will be a long term benefit.

  There is a concern that your company may find too much and bring discredit on our billing      section that they haven’t been doing their job. How do you address this concern?
     This is a tough one to answer, but we certainly recognize that this question may be on the minds of      some folks. We never enter into a project with an underlying motive of making people look bad or to      embarrass anyone. Our sole job is to find lost revenue for the utility which should be in everyone’s best      interest. For the program to reach its highest level of success, WCA must work in harmony with your      billing staff, and we will do everything we can to make certain that this harmony extends throughout the      program. We certainly understand, as we hope utility management would as well, that the billing staff      probably is staff-limited and no doubt has difficulty in marshalling the forces to do the type of field      investigation that WCA can provide. We like to think of ourselves as an extension of the billing      department and that we’re all working toward the same goal – that of maximizing the revenue coming      into the utility.

  Upfront, can you estimate the benefit that this program would bring to our utility?
     This is extremely difficult to project. Historically with our past clients, there have been certain indicators      that tell us what projects might yield higher “Finds” than others, but we’ve also found that these      indicators do not always give us the true picture. Until we have downloaded the billing data and begun      the process of evaluation of this data, we generally will not know the magnitude of revenue increase      that will result from the program.

  Typically, how long does it take for WCA to complete the program?
     Obviously, it would depend on the size of the utility; the number of accounts; and the number of “Finds”      encountered. Usually, the data evaluation and field work for any given utility can be completed within a      year.

  Who fixes the problems that WCA finds?
     In our experience, the utility reserves the right to implement the corrections. As stated earlier, WCA is      prepared to assist the utility in whatever ways that we can during the implementation phase.

  Who has WCA worked for in the past and present? Are there references at these entities      we could contact?
     A full listing of clients is available, along with performance and date. These people have agreed to      provide reference for Water Company of America, so feel free to give them a call.

  Are there other companies that use the same sort of approach to revenue enhancement      as does Water Company of America?
     There is one other company which provides a similar service. It is an off-shoot of WCA.