Finance Committee Agenda and Packet 2011 01 18

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PAGE TWO SUBJECT: UTILITY BILLING ISSUES DATE: JANUARY 18, 2011 sent to the property owner a week in advance of issuing the red tag on the property. The total amount included in this recommendation is 18 accounts totaling approximately $2,100 (.5% of the total accounts receivable balance). 3) Transfer delinquent tenant balances to property owners for accounts finaled in 2010 and begin billing the property owners. (This transfer was implemented into the final billing process in mid September 2010, so these are accounts finaled prior to this timeframe.) The Finance department will monitor the owner balances and if they become delinquent, issue red tags as discussed in 2) above. The total amount included in this recommendation is approximately 17 accounts totaling approximately $2,500 (.6% of the total accounts receivable balance). Discontinue Tenant Billing: Section 13.12.100 of the Louisville Municipal code states, All accounts for water shall be kept in the name of the owner of the property and not in the name of any tenant; provided, that persons holding possession of property under a lease may be supplied on their own account where the city deems it best to keep the account in the name of the lessee. Such account in the name of the lessee shall not diminish the responsibility of the owner for such water charges." In practice, the City has allowed utility accounts to be created in the name of the tenant. In order to alleviate the administrative burden and help reduce the future write -offs this practice causes, the Finance department is proposing that the City allow utility billing to only the property owners of rental property and end the practice of billing property tenants. The process of billing tenants on behalf of the property owner entails substantial administrative burden. Red Flag rules issued by the Federal Trade Commission require us to obtain a copy of the lease agreement as well as a copy of a photo id to prevent identify theft. The Finance department must set up the tenant account in the utility billing software and activate the services. When the tenant moves out of the property, the Finance department must coordinate with the Public Works Operations department to dispatch a technician to obtain a final meter reading in the appropriate timeframe. The Finance department must then issue a final bill using the final meter reading data, obtain reports from Western Disposal to prorate trash service and issue a transfer fee on the property owner's account. The Finance department must then manually monitor the tenant's account to see if payment is received timely and if not must transfer the balance to the property owner. The owner's account must then be monitored manually for payment because once a new tenant moves into the property and becomes the active account on that property, the red tag process used to ensure receipt of payment is only applied to the account currently active on a location (i.e., the new tenant account). The Finance department proposes implementing this change prospectively, current tenant b