CLEVELAND, Ohio -- Cleveland Mayor Frank Jackson says the city's overhaul of

operations has been so successful that it has yielded $14 million dollars a year in new revenue and could grant customers a five-year reprieve from water rate increases.

Cleveland water customers have shouldered a seven percent rate increase nearly every year for decades to cover about $1.6 billion of improvements to the department's facilities during the past 30 years, Jackson acknowledged Thursday during a meeting with Plain Dealer reporters and editors.

The latest rate hikes, which were passed in 2011 and extend through 2015, will cause the typical Cleveland customer's rates to rise 82 percent by the end of the five years, with suburban rates up 50 percent.

But that increase was calculated based on the water department's earlier, less-efficient business model and lower collection rates, Jackson said. If improvements continue as projected, the department will have enough cash on hand to meet its debts and invest in state-of-the-art facilities and infrastructure, while giving customers a break from rate increases starting in 2016, Jackson said.

"That is our goal," Jackson said. "That is how you can measure us. Have we reduced our costs, restructured properly and improved efficiencies enough to make that happen and to make our customers happy?"

The utility has come a long way since

, customers complained of incorrectly estimated bills and waited for an hour or more to speak with call center representatives, Jackson said.

The department employed more than 1,200 workers using outdated, manual or labor-intensive procedures with high error rates. The collections rate hovered around 88 percent, with $73 million in delinquent payments, and the department identified more than 13,000 accounts that never received consistent bills. Thousands more were traced to vacant lots and empty homes.

Today, calls are answered promptly, bills are timely and the collections rate has spiked to more than 98 percent, thanks to the department's reorganization by Kansas-based consulting firm Black & Veatch, the mayor reported.

Call center workers receive better training and supervision. New departmental leaders were installed. And the three subdivisions within the Public Utilities Department -- water, Cleveland Public Power and water pollution control -- centralized communications and personnel.

The department also is in the process of installing an

system throughout its 72-community service area. The system automatically reports hourly water use -- all but

ending the department's practice of estimating bills when faulty meters go undetected for an entire billing cycle. The technology eventually will allow for more-accurate monthly, rather than quarterly, bills. And it will flag water-usage irregularities, including illegally activated utilities, said Paul Bender, who managed the turnaround project for Black & Veatch.

So far, about 30,000 out of 420,000 properties have received the equipment upgrades, which include low-frequency radio transmitters, called "endpoints," installed outside each house or commercial building to harvest usage information, Bender said.

Technicians are installing the equipment at a rate of about 500 a day, Bender said. And the city expects to have the system fully assembled by the middle of 2014.

The customer billing system will continue to improve through 2015, Bender said, including a modernized website that offers online bill payment options and tools that could allow customers to monitor their own water usage.

With automated meter reading and fewer billing and equipment problems to manage, water department staff likely will be reduced through attrition, Jackson said. Workers who remain will be retrained to handle maintenance and troubleshooting of the new technology.

Upgrades to facilities and the subterranean system of water pipes are expected, too, the mayor said, as large water meters are installed at various points along main arteries to pinpoint leaks.

Jackson said the historically beleaguered water department is on its way toward becoming a national model for publicly owned utilities. But the progress would have been impossible without the 2011 water rate increase, which Jackson said was necessary for the department to pay its debts for system improvements without becoming insolvent.

"What we were asking for was the right thing at the time to guarantee the stabilization of the operation, maintain a quality product and ensure financial viability," Jackson said. "Without it, this system would be in terrible shape."