Finance Committee Agenda and Packet 2011 01 18

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COUNCIL COMMUNICATION TO: MAYOR AND CITY COUNCIL FROM: MALCOLM FLEMING, CITY MANAGER DATE: JANUARY 18, 2011 SUBJECT: UTILITY BILLING ISSUES ORIGINATING DEPARTMENT: FINANCE SUMMARY: The Finance Department would like to bring two Utility Billing Issues to the attention of the Mayor and City Council. First, during the month of December 2010 the Finance department conducted a review of all utility billing accounts that were ninety days or more past due. A detailed discussion of the results of the analysis along with recommendations regarding the appropriate disposition of these balances follows below. Second, the Finance department is requesting to discontinue the current practice of allowing utility billing accounts to be set up and billed in the name of tenants. A discussion of why this change is being requested and how it would be implemented follows below. Analysis and Disposition of Accounts 90 days past due: In a Council Communication dated November 15, 2010, the Finance department indicated it would conduct a review of delinquent utility billing accounts. In December 2010, we reviewed all utility billing accounts that were ninety days or more past due. This consisted of approximately 440 accounts totaling approximately $59,000 (14.7% of the total accounts receivable balance). In that same Council Communication, the Finance department indicated that for a number of reasons the "red tag" process had been suspended effective mid May 2010. The Finance department resumed issuing red tags on January 7, 2011. We estimate that these red tags will account for approximately 230 accounts or $43,600 of the delinquent accounts reviewed in December. The Finance department makes the following recommendations regarding the remaining accounts which are past due 90 days or more: 1) Write -off all accounts that have had no activity since 12/31/09. The majority of these accounts resulted when billing was erroneously turned off after a final bill was issued. The majority are due from former tenants, many of which are 3 or 4 years old. The total amount of the recommended write -off is approximately 170 accounts totaling approximately $10,200 (2.5 % of the total accounts receivable balance or .1% of annual utility billing). 2) Issue red tags to properties where the property owner is delinquent but there is a tenant occupying the property whose account balance is current. A letter would be is SUBJECT UTILITY BILLING ISSUES AGENDA ITEM