Council: Writing off $105,000 in uncollectible utility bills questioned

September 24, 2010
Santa Paula City Council

Uncollectible utility bills just shy of $105,000 were questioned by the City Council at the September 20 meeting when several members expressed concern that payment would not be pursued.

Councilman Bob Gonzales asked that the item be pulled from the consent calendar, those issues usually considered routine.

The city is owed revenue of $198.70 from the General Fund, with the city utilities representing the bulk of funds not paid. The refuse fund is owed $38,653 (18 percent of the total), Wastewater Fund is short $38,653 (37 percent), and the Water Fund is owed $47,414 (45 percent). According to the report by John Quinn, finance director, the total amount owed of about $105,000 is just approximately 1 percent of the average monthly utility billing.

Duane Ashby, a member of the city’s Economic Advisory Committee and a council candidate, said during these economic times, “You have to look in the couch cushions to find a little money,” and the uncollectible utility bills should be considered same. Ashby said he understands the city “puts a lot of effort” into recovering the funds, and suggested the city utilize a collection agency.

Mayor Jim Tovias said he brought back a collection agency brochure from the recent League of California Cities conference and urged staff to contact the company. “Give them a try and see what they can offer us.”

Declaring the funds uncollectible, said City Manager Jaime Fontes, does not mean the bills do not go to a collection agency. “In essence, we could sell them at a percentage today,” and Fontes said council item approval would not mean collection efforts would cease.

Councilman Ralph Fernandez questioned the city’s service stop policies, noting some of the outstanding amounts were excessive. He asked if it would be possible to create an ordinance that would make the outstanding balances subject to a lien. Fontes said the city already can place liens on property for unpaid debts.

Quinn noted that several of the outstanding balances - including one of almost $4,000 - were for commercial property, including recreational vehicle facilities with out of county ownership. After more discussion Quinn said the city is “clearing the books” of accounts mostly dating back to 2007 and 2008 that should be removed for accounting purposes. On occasion the bills are paid when a property owner tries to reestablish utility services.

“One-hundred thousand is very small” when compared to the total revenues collected by the utility enterprises, and Quinn said collection efforts by outside agencies are expensive and often not successful. It is not difficult for the city to track usage at addresses with payment problems and, he noted, “Quite a number of meters are tampered with or stolen.”

City Attorney Karl Berger noted the city can’t place a property lien for a tenant’s charges, and “The new tenant is not responsible for the old tenant.” Property liens take time and the city’s “tools are the most up to date tools we have... I don’t think we can to our quiver of options.”

Gonzales said “years ago” such bills would just be written off, and he would approve the item as long as payment continues to be pursued.

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