Third Party Review

Final Update - October 23rd

All requests have now received final review, and results have been mailed to the 179 customers that requested a Bill Recalculation during this process. Below are some statistics of the outcomes: 

  • Average amount underbilled (customer owes additional funds to the town): $36.03
  • Highest amount underbilled: $77.04
  • Average amount overbilled (the town owes funds to the customer): $12.05
  • Highest amount overbilled: $33.46

BerryDunn Final Report & Town Management Response

Linked below are two documents that conclude the Third-Party Review process. BerryDunn’s final report outlines key findings from their utility billing process review, and provides recommended actions for improvement. The Management Response document presents the town’s response to BerryDunn’s findings and outlines the next steps for town operations. 

 
Background Information

In July 2024, the town experienced a system outage resulting from a cybersecurity incident that caused a major disruption with our process to create utility bills. The town never lost the ability to collect utility readings from meters, which allows us to determine the amount of electricity and water used. However, for several weeks, it became a significant challenge to load that usage data into our software, to then create bills in a timely manner.

Due to these challenges, our cycle 2 customers received a bill in August that accounted for about 60 days of usage, and cycle 1 customers received a bill in September that included about 100 days of usage. We've been referring to these as 'combined' bills, since the usage for multiple months was combined into one bill.

Billing system limitations caused several issues with applying the correct rates and fees in those combined bills:

  • Tiered Water Rates – Apex water customers are billed at a tiered rate. The first 6,000 gallons are billed at the tier 1 rate, usage between 6,001 - 12,000 gallons are billed at a slightly higher rate, and usage above 12,000 is billed at the third tier rate. (View the rates on page 7 of our Fee Schedule.) Because the combined bills included multiple months of usage, many customers were bumped over their normal tier threshold, causing them to pay a higher rate for a portion of their usage.  
  • Rate Change Effective July 1 – A rate increase went into effect on July 1st.  August bills for cycle 2 included approximately three weeks of usage that were incorrectly billed at the new rate, rather than the prior fiscal year’s rates. For September cycle 1 bills, approximately six weeks of usage were incorrectly billed at the new rate.
  • Base Charges – A base charge for water, sewer, and electric services are normally included in each month’s bill. However, due to software limitations, we were not able to include the correct number of base charges in the combined bills.   

Upon initial staff analysis, the lack of appropriate base charges tended to offset any potential overcharge related to tiered rates and/or FY24-25 rate changes for most accounts. 

However, for an additional level of review and transparency around utility billing, the town hired an independent third-party firm, BerryDunn, to conduct a comprehensive analysis of summer 2024 billing data. The purpose of this review was to determine whether or not customers were overcharged on the combined bills. 

Preliminary Findings

BerryDunn spent time on site, meeting with staff to learn about our billing processes. From that understanding, BerryDunn ran billing simulations, then compared the simulated bills to those issued by the town in the summer of 2024.  

During the May 13th Town Council meeting, BerryDunn presented the preliminary results of their review. You can view the presentation slides and watch the presentation given at the Town Council meeting. 

Frequently Asked Questions


Read answers to FAQ's below, or watch the video playlist.

Do you have a question about this topic that is not answered below? Submit your question.

What exactly was BerryDunn tasked with doing?

  • Review the current processes the Town uses to produce utility bills
  • Understand the specific steps taken by staff after the cyber incident of July 2024 to create bills
  • Learn about the tools and technology supporting these processes
  • Perform a simulation of the town’s total utility billing system for a specific time period 
  • Determine whether or not customers were overcharged during that same specific time period

What is a billing simulation?

A simulation is a way to recreate what would have happened under normal conditions. Here, it involved generating utility bills using the correct rates and fees (as if the billing software disruption hadn’t occurred), then comparing them to the actual bills issued to find any differences.

What was the result of the simulation? 

Based on the complete simulation performed on the whole billing system for a specific period of time, BerryDunn reported a preliminary finding that the Town underbilled customers by a total of about $300,000.

Weren’t they supposed to provide details about each individual account?

The goal of this review has always been to reach the point where we can provide details to every customer with the outcome specific to their account. After the system-wide simulation was completed, BerryDunn then conducted an in-depth, account-by-account review on a sample of 100 accounts – 50 accounts from cycle 1 and 50 accounts from cycle 2. Results of that sample showed that one account was overcharged by $19.05, while the remaining 99 accounts were underbilled (charged less than what should have been owed). The amounts of underbilling range from $6 - $104. 

Knowing that 99% of this first sample was underbilled, BerryDunn paused their work to get direction from the town on whether or not they should proceed with the in-depth review of all utility accounts.

What period of time did their analysis cover?

The purpose of this review was to simulate only the billing periods immediately following the cybersecurity incident of July 2024:

  • For cycle 2 customers, July and August bills were simulated. 
  • For cycle 1 customers, bills were simulated for July, August, and September. 

However, they did check data from May 2024 through October 2024 and reviewed data for 2023 averages, and determined that these checks did not reveal any reasons to dig further beyond that time range.

Where do things stand with this review? Are they finished?

BerryDunn reported that the discovery work and the simulation phases of their work are complete. They are now in the process of analyzing the output files from the simulation. At the May 13th Town Council meeting, they presented several options for Town Council to consider in how to move forward.

What options were presented to Town Council for next steps?

Given the preliminary findings, BerryDunn presented four potential options for next steps, and highlighted considerations for each. These considerations included significant policy decisions, such as how leadership would handle accounts that are found to have been underbilled.

The options presented were:

  1. Proceed with a full account-by-account review for all customers  
  2. Recognizing that the town underbilled as a whole, do not perform any additional account-by-account reviews  
  3. Create a process that allows customers to request that their individual account be reviewed in detail
  4. Identify high usage accounts, which would be more likely to have higher bills, and review only those

Which option was selected?

During the May 13th presentation, Council considered all options outlined, then requested a closed session to receive advice from the Town Attorney on any legal obligations for collection. Ultimately, Council voted to pursue the option 3 listed above, that would allow customers to request a recalculation of the bills in question.  

What legal obligations does the town have to collect?

When the town provides utility services, it enters a contract with the customer. This means the customer agrees to pay certain fees in exchange for receiving utility services. According to Article 1, Section 32 of the North Carolina Constitution, no one is entitled to special benefits or privileges from the community, unless it is in return for public service. Forgiving a debt owed to the town for utility services may violate this constitutional clause, because it would give the customer the special benefit of free utility services.

Due to this constitutional requirement, generally, a town does not have the authority to forgive utility debts without receiving full payment.

So, customers who want their account reviewed need to request it?

Yes. It is important that customers who request a recalculation of their bill have a clear understanding of what happens after their detailed review. If the review determines that they were overcharged, the town will pay that customer the difference. However, if the customer was underbilled, the customer will be required to pay the difference. (From the detailed review of the sample 100 accounts, the underbilling amount ranged from around $6 to $104.) The one account from this sample that was overbilled, was overbilled by $19.05.

The request period closed on July 31. 2025.

Some customers have been waiting to hear the findings of this review before making any payments on their utility account. What should they do now?

All customers have been encouraged by town staff to continue making payments while waiting for the results, to help them from falling behind. Remember, the goal of this process was to review only a specific range of billing periods (not all billing periods since last July).

The town will begin reaching out directly to customers who are over 120 days delinquent on their account, especially those with a balance greater than $1,000. Those customers will be given the chance to request their individual account review if they choose to do so. Once that review is complete and the total balance is calculated, customers will have two options – they can either pay the balance in full right away, or enroll in a payment plan to spread their balance across several months.

The completion for this project was initially targeted for February. What caused the delay?

There are several factors that contributed to the delay in receiving the initial set of results, including:

  • Staff Time – Staff from several departments (Utility Billing, Water Resources, Information Technology, etc.) spent a significant amount of time with the BerryDunn team to provide the information necessary to complete their review. Most of those same staff members are also involved in other time-intensive projects, including the transition to a new billing software system, and our meter system upgrade project. Both of these initiatives were well underway prior to the cybersecurity incident, and would have caused significant issues if paused to focus solely on the third-party review.
  • Increased Call Volume – The same billing staff members assisting with the third-party review were also facing increased call volume and complexity, as customers worked to understand their billing amounts.
  • Billing Software Access – BerryDunn needed access to the ‘test’ environment of the town’s current billing software to perform their billing simulation. However, it was already scheduled for use by Milsoft, the new billing software vendor, for several weeks during the same time period.
  • Inclement Weather – During two of the three planned on-site visits, Apex had facility closures due to snow.