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REQUEST FOR COUNCIL ACTION
December 14, 1999 _______________
DATE ITEM NUMBER
ORIGINATING CITY MANAGERS
DEPARTMENT AGENDA ITEM REVIEW_____
Finance Department (Jones) Utility Late Fee and payment
period for utility bills
At the July 23, 1998 City Council meeting the late charge on utility bills was discussed. The City Manager directed staff to survey other cities and make a recommendation to the City Council.
At the November 10, 1998 City Council meeting staff recommended leaving the late penalty at 10% which is consistent with other cities. The Council also discussed changing the bill payment period from 20 days to 30 days, a motion was made and failed.
RECOMMENDED COUNCIL ACTION: For Council discussion
Staff surveyed other cities that bill on a monthly basis, for both the number of days to pay before a late fee is charged and the amount of the late fee.
|Staff met with the water/sewer sub-committee
and discussed the 20 day payment period versus the 30 day payment period.
To give you an idea of how payments are typically received throughout the
month, November was used as an example. Also, below is an example of the
current 20 day payment period and a 30 day payment period. The current method
of billing provides the customers with three notifications before the shut-off
day, and the 30 day payment period only allows for two notifications.
Staff feels that the current method of billing is working for the majority of our customers and that the 30 day payment period would be confusing to them, especially when they receive a bill in December that reflects a late charge for the month of October. The billing department very rarely receives complaints about the time allowed to make payment before a late charge is assessed.
Payments Received in November
By the 22th 84% paid = (5,606 payments)
One day after the due date 3% paid = (191 payments)
Between the 24th and 30th 8% paid = (568 payments)
After the 30th 5% did not pay
Example of the Current Billing method: - Payment due in 20 days:
§ November 30th November bill mailed
December 20th November bill due
December 21st Late charge assessed and past due bill mailed
December 30th December bill mailed with reminder of past due balance
January 10th Shut-off notice mailed for November past due balances
January 17th Shut-off day
§ 20 days To pay before a late charge is assessed
41 days Shut-off notice is mailed
48 days Service is shut-off
§ Three notifications of a past due bill prior to shut-off
Example of a schedule for – Payment due in 30 days:§ November 30th November bill mailed
December 30th November bill due
December 30th December bill mailed with late charge assessed for October past due bill and a reminder that the November bill is past due (late charges for November cannot be assessed at this time, as the bills are prepared prior to the 30th of the month)
January 21st Shut-off notice mailed for November past due balances
January 28th Shut-off day
§ 30 days To pay before late charge is assessed
51 days Shut-off notice is mailed
58 days Service is shut-off
§ Two notifications of past due bill prior to shut-off
The topic of the late fee was not discussed at the sub-committee level, but as you can see from the survey there are a number of other cities that charge a 10% late fee. Any revision to the late fee, whether it is a percentage or flat fee, can be changed very easily.
When it becomes possible, either with additional staff to read meters or when more of the radio read meters are installed, staff would like to split the billing process into two cycles. For instance, half of the accounts would be billed on the 30th and the other half on the 15th of the month. This would even out some of the workload in the billing department.
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