For at least the past two years, Nashville Utilities has been seeing about half of the water it buys to resell to town customers “lost,” not paid for by water customers.

Why that water is going unbilled, town officials do not know for sure. That’s why the town council voted unanimously last month to contract with M.E. Simpson Co. Inc. to do investigatory work, such as listening to hydrants and valves to try to find leaks and testing water meters.

The charge for that company’s on-call services will be “not to exceed $20,000.” In the Feb. 18 meeting, council member David Rudd said that that’s a small price to pay compared to the revenue they’re losing each year — estimated at $200,000, or about 21 percent of the annual operating budget for the water utility.

Dax Norton, strategic direction adviser to the town council, estimated that the town could recover about $100,000 of that annually in the short term, maybe more of it over time, if it found and fixed sources of water loss.

“It’s not an inconsequential amount of loss, either in real volume or in a financial sense,” said Roger Kelso, president of the Nashville Utility Service Board, to fellow board members at their Feb. 17 meeting.

The Nashville USB is appointed by the town council to help manage the utility and be forward-looking in its needs.

“I think for this year, this needs to be one of our priorities to see what we can do to get an action plan to correct this,” Kelso said.

Nashville Utilities buys all the water it resells to its customers from other suppliers, the largest being Brown County Water Utility.

Indiana lawmakers recently made it mandatory for water utilities to do annual audits and turn them in to the Indiana Finance Authority, Norton said. The audits measure the water that went through the system, where it went and what usage was billed — or not billed.

Nashville Utilities’ audit for 2019 was finished and turned in in February. The system’s water loss rate for that year was about 55 percent, Kelso told the USB.

The water audit for 2020 is now in progress, and so far, it looked like the loss rate was lower — about 45 or 46 percent, said Robin Willey, who operates the water and sewer utilities. But he also was seeing less water use in 2020 — about 24 million gallons less. Some large users such as schools and hotels were not able to operate normally for the full year due to the pandemic.

Kelso, who used to run the town’s water system decades ago, said the loss percentage goal should be “in the low 20s,” as all systems have inefficiencies.

The AWWA cites a 2013 study of 246 water utilities which incurred “apparent (customer) losses equivalent to 29.4 billion gallons of water, translating into uncaptured revenue of over $151 million for the year.

“… The number of utilities included in this assessment is a small portion of more than 50,000 water utilities in the United States, meaning water losses across all water utilities in the United States exist at a staggering level,” the white paper says.

Some of those losses, or “non-revenue water,” come from unbilled uses such as fire protection. But others can come from leaks, inaccurate metering, theft of service, or errant building or accounting practices, the AWWA said.

The new board, which just met for the first time in January, plans to see reports on a monthly basis now so they can possibly see trends.

“Things that get measured get changed, and so having this in front of us, talking about it on a regular basis, it’ll be amazing how things start to change,” Kelso said.

When Kelso started working with the utility in the late ‘80s, the town’s system was seeing water loss “about like this,” he said of the 2019 and 2020 numbers. “In the ‘90s, we had gotten it down to 11 or 12 percent and I started to wonder if that was really correct, it seemed like it was too good.”

In the first half of 2014, when Nashville was seeking money for community projects through the Stellar Communities program, the town was seeing water loss of between 19 and 40 percent, according to newspaper archives. Each month’s report mentioned water leaking through aging pipes as contributing to that problem, especially during the exceptionally cold winter.

The town didn’t get a Stellar designation, and didn’t get access to a grant pool that could have helped fix the problems. Instead, the town received a combination of grants and low-interest loans to do $1.8 million worth of projects in 2018, including replacing all the residential water meters throughout its system. But more projects remain to be done.

Kelso believes that water escaping through old commercial meters may be contributing somewhat to the loss rate, as those meters account for about 50 percent of the water the town distributes, even though there are far fewer of them in the system than residential meters.

Line leakages will likely be found, too, he said. Some of the pipes in the town’s system are pretty old, and some weren’t new to begin with.

“There’s section of town where the piping actually came from World War II Camp Atterbury when they were at full capacity and had POWs and everything else out there,” Kelso told the USB. “They pulled a lot of pipe out of the ground and gave it to neighboring utilities, and so a lot of the core of town is of that vintage, and in some places, when they dig it up it looks like someone shot it with a shotgun.”

Identifying and stemming the water and revenue loss also could help the town build up its capital improvement money so that it could replace problem sections of water line in a “retirement program” instead of digging them up and fixing them year after year, Kelso said.

In a 2014 story about the water system, former Town Superintendent Roger Bush talked about finding water lines that were fixed with “bailing twine and patches” or clamps that were wired on instead of bolted, and digging parts up only to clean them up and put them back on the shelf to be reused because money was so tight.

If more of the lost revenue can be captured, Kelso also suggested the USB look into doing a capital asset management program so that major projects can be paid for as needed out of the annual budget instead of with a bond issue.

The town also is dealing with a longstanding issue with water infiltration into its wastewater treatment plant.

“On an annual basis, we’re not billing for about 43-44 percent of what’s going through the treatment facility,” Kelso told the USB last month, and “there are some times during extreme flooding and stuff like that that maybe that number is even higher.”

“It seems like it’s always been a problem,” he said, about water that isn’t really wastewater getting into the sewer system and going through treatment when it doesn’t need to. The wastewater system was installed in the early 1960s near Salt Creek in an area prone to flooding.

The town’s sanitary sewer master plan, which the town council adopted last year, addresses some ways to fix this, but they’ll require some capital investment.

The sewer master plan was passed before the Nashville USB was seated, so board members are planning to have a work session to familiarize themselves with that document and start thinking toward a capital improvement plan.