Pedestrians and motorists who live on U Street NW between First and North Capitol streets call their local menace "The Hole."

The hole is a water-filled crater that leads into an alley off U Street. It sits in the midst of a long block of ice that rises 12 inches over the side-walk at its thickest point. The mass extends along nearly a fourth of U Street, sheeting part of the sidewalk and the street in ice.

People walking towards First Street sidle against the nearest fence and walk to the corner in careful, tip-toe steps. Motorists coming through the alley slow down to creep around the water-filled crater and dangerous ice. No one intentionally messes with the hole.

The cause of it all? A defective water meter that had been leaking since last July, said Nelson Terry, a resident of U Street. Terry, who has been active in the water bill disputes in his community since last summer, said he began reporting the leak to the environmental services department in July.

Last week word of Terry's complaints to reporters and his calls to the Environmental Services Department finally reached the office of the agency's director, Herbert Tucker. Representatives from the agency's meter division - which replaces faulty meters - came to inspect the situation.

William Rice, chief of consuemr services, said he had been asked by Tucker to make the job "a priority" because the press was involved. After the meter was removed Rice announced that the problem was a worn-out washer. It took about four minutes to put in a new meter and halt the leak. The old meter was originally installed in 1967.

"Many of the services in the District of Columbia are very old," said Rice. "When you have old services and old connections you develop problems. This (leaking meters) is happening all over Washington."

When the leaky mete was first discovered, Terry said, about two gallons of water gushed from both sides of the meter every four minutes. Water leaking from the street side was being charged to the city; the other portion was being charged to the resident at 75 U Street whose water came from that line. Because of the leak, Terry said the resident was protesting her high water bill.

"The meter reader should have caught it," said William Makal, a meter installer working with the crew. Makal said he understood the resident's concern about the high water bill. Smiling slightly he explained that the leaky meter represened a situation that was presently very close to his own heart - and wallet.

"My water bill used to be $40. This year my water bill was over $300," he explained. "Now I know I didn't use tht much water. I work for them, but I'm not going to pay it."

Makal said there are leaky meters and defective pipes all over the District, but that meter readers apparently don't report all of them.

Jim Florence, another agency representative at the site, said the record show tht the meter was read last November but the meter reader's report did not indicate a possible meter defect.

Most complaints about leaky meters come from two sources, the customers and the meter readers, said Rice. Complaints also come from employees in other water department divisions when they spot leaks that may be gushing out on the street.

In 1977 the department fixed 2,787 leaky meters, said Rice. A 77-man crew responds to more than 2,000 such complaints annually. All meter leaks reported to the meter branch of the water operations division are fixed, he said. The branch can be reached by calling: 462-4430, extensions 271 through 277.

In the U Street case, the leak was only recently reported to the proper department because the department officials Terry spoke to never relayed the complaint or referred him to the correct department, said Rice.

"Unless a leak is reported properly we have no way of knowing about it," he said.

Not unless you walk down U Street and become a victim of the hole and that ice, said Terry.

"You're walking down on a plain sidewalk and then all of a sudden you're on a block of ice," he said. In recent weeks te hold has attempted to swallow an oil truck - which had to be pulled out by a tow truck - vans, cars and other vehicles.

Even as Terry spoke a Pepco truck that emerged from the alley was soon spinning its wheels in the hole.

Pepco bill collector Willie Fogle Jr, a resident at 2017 First St., was riding in the truck. Well aware of the hole, he said, he had tried to steer the driver around it.

"I told him but he didn't see it so we just dropped in. Cars get stuck in there all the time. You really can't tell it's there," said Fogle.f the hole isn't creating problems the ice is, said William Jones, another resident of U Street.

"Kids going to school are slipping and falling. You can't walk on that side," he said.

The environmental services crew said they would have a truck sand and salt the area.

Terry wanted more. As reporters stood by, Terry told the meter crew he wanted a backhoe to break up the ice because it was so thick the salt would have no effect upon it. Pulling him to the side Jim Florence gave his response to that request. He told Terry that "it's not fair of you to take advantage of us like this with the TV coverage."

Taken aback for a moment, Terry stopped. Later, smiling broadly, he asked, "Did you hea what he said?"