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HomeMy WebLinkAbout2276ORDINANCE NO. Ak-] (o AN ORDINANCE of the City of Port Angeles establishing policies for collection of utility accounts, amending Ordinance 2055, and amending Chapter 13.16 Port Angeles Municipal Code. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PORT ANGELES as follows: Section 1. Section 4 of Ordinance 2055 and Section 13.16.040 of the Port Angeles Municipal Code are hereby amended to read as follows: 13.16.040 - Bills Delinquent Before Next Monthly Billing - Notice of Delinquent Account. A. All utility bills for the City of Port Angeles shall be delinquent if payment therefor is not received by the City on or before the twenty -fifth (25) day after the current charges date posted on the bill. Such current charges date shall be stated on the bill with particularity. B. Upon lapse of a bill into delinquency, the City Manager or his designee, shall cause a notice of delinquent account to be deposited in the United States Mails, addressed to the consumer as provided in Section 13.16.020. C. Deposit in the United States Mails pursuant to subsec- tion B of this section shall be deemed full and complete notice to the consumer of the nature and amount of any particular utility billing. D. The notice of delinquent account shall state that un- less all delinquencies are corrected within ten (10) days of the date of the notice of delinquent account, the City will discon- nect or discontinue utility service without further notice on or after a date certain to be stated in the notice of delinquent account. The notice of delinquent account shall further state that, if the consumer has questions concerning the account or disputes the amount of the account, he may appeal to the Director -1- of the Administrative Services Department, or his authorized designee, whose address and telephone number shall be stated on the notice of delinquent account. E. An account which has become delinquent and for which a notice of delinquency is issued, shall be assessed a penalty fee for each notice issued during a consecutive twelve -month period as follows: First notice, $2; Second notice, $5; Third notice and beyond, $10. For the purposes of this subsection, when an account receives a third notice during any consecutive twelve -month period, the City Manager or his designee shall further require deposit be sub- mitted if no previous deposit is still outstanding in accordance with Section 13.16.015, along with payment or arrangement thereof for the delinquent charges due. Section 2. Section 5 of Ordinance 2055 and Section 13.16.050 of the Port Angeles Municipal Code are hereby amended to read as follows: 13.16.050 - Disconnection of Utility Services. A. Should a delinquent account not be paid pursuant to Section 13.16.040, the City Manager or his designee shall imme- diately cause the electric and water services to be cut off from the premises, and such utility service shall not be reconnected to the premises until all arrears, delinquent charges, service charges and unpaid charges are paid, together with a reconnection fee. Section 3. Deposits. A new section, as follows, is hereby added to the Port Angeles Municipal Code. 13.16.015 - Creation of Accounts - Deposits. A. At the time an account is requested and before it is authorized, the City Manager or his designee shall require the person requesting services to make a deposit with the City of -2- Port Angeles based on sixty days of average residential /electrica charges for the unit type for which services are requested to a maximum indicated in the following schedule: 1. Single- family, $160.00 2. Multi- family, $125.00 For the purpose of this section, single- family units are defined as structures designed for occupancy by a single family only, containing a complete kitchen unit. Structures which are not single- family residences include, but are not limited to, du- plexes, fourplexes, apartments and condominiums. B. A deposit, once established, may be refunded with interest at the standard passbook savings rate in whole or in part to the person or credited to the account of that person upon receipt by the City of the person's prior utility credit rating deemed suitable by the City Manager or his designee to assure with certainty that the account with the City of Port Angeles will not become delinquent. In the absence of such assurance, the deposit may be retained by the City of Port Angeles until an account is ordered off or otherwise discontinued. The City may then, at its option, apply such deposit to fully pay any remain- ing charges on the account. Under no circumstances shall any part of the deposit be used as payment for charges until an account has been finalized and all services been discontinued. If circumstances such as timely payment history warrant, the City Manager or his designee may, by determining that the City is assured with certainty that an account will not become delin- quent, release all or part of the deposit with interest at the standard passbook savings rate to the depositor at their request; provided, however, that no such refund will occur for at least 12 months from the time of deposit. C. A deposit may be required on commercial accounts, in a manner consistent with the procedure set forth in this Section, when the City Manager or his designee determines that such -3- deposit is necessary, based on utility credit rating and /or payment history. Section 4. Effective date. The provisions of this Ordinance shall become effective on January 1, 1984. PASSED by the City Council of the City of Port Angeles at a regular meeting of said Council held on the day of x5111 lt , 1983- D X MA OR :ATTEST: Merr. A. Lannoye, Cit! Clerk -. APPRO D AS TO FORM: ai D Cr . `Kqut n, City Attorney PUBLISHED : S3 • MEMO: June_26, 1985 TO: Manager Flodstrom,'Mayor Whidden and C cilmembers FROM: Tim Smith, Customer Service Manage RE: Utility Credit Policy Revisions ISSUE: Can stricter controls to the City's utility credit policy provide improved utility protection, and cashflow while still maintaining good customer relations? BACKGROUND: Possible revisions to Utility Credit Ordinance #22 76 were discussed by the U.A.C. March 28, 1985. Staff was in- structed to draft proposed ordinance language accompanied with written office policy /procedure guidelines. ANALYSIS: Staff, noting that the potential exists for substantial utility losses with some chronic delinquent customers re- quested policy revisions to protect the utility without damaging working relationships with our otherwise, infre- quent past due customers. The existing flexibility of negotiating credit arrangements results in successful collections in most cases while main- taining friendly business relations. However, as the number of delinquent accounts diminishes staff notes a "core" of recurrent customers who continue attempts to avoid payment for utility services provided to the detri- ment of all City utility customers. Attempting to curb the possibilities for continued bad debts without damaging all utility customers' ability to nego- tiate payments, a definition of "chronic delinquent cust- omer accounts" has been formalized. These chronic delin- quent accounts would then be targeted for possible deposit increases and penalty fee requirements on a case by case basis. RECOMMENDATION: Staff recommends the Council approve the Ordinance revisions and policy guidelines attached. CITY OF PORT ANGELES UTILITY CREDIT POLICY /PROCEDURES • UTILITY DEPOSITS I. TERMS, GENERAL (See Ordinance 42276) Section 3. Deposits. A new section, as follows, is hereby added to the Port Angeles Municipal Code. 13.16.015 - Creation of Accounts - Deposits. A. At the time an account is requested and before it is authorized, the City Manager or his designee shall require the person requesting services to either make a deposit with the City of Port Angeles or present a copy of a verifiable prior utility credit rating deemed suitable to assure with certainty that the account with the City of Port Angeles will not become delinquent. A deposit, if required, will normally be based on sixty (60) days of average residential charges for the united type for which services are requested, indicated in the following schedule: 1. Single - family, $160.00 2. Multi - family $125.00 For the purpose of this section, single - family units are detined as structures designed for occupancy by a single family only, containing a complete kitchen unit. Structures which are not single - family residences include, but are not limited to, duplexes, fourplexes, apartments and condominiums. Nothing in these rules shall prevent the City requiring additional or new deposits when conditions such as chronic delinquencies warrant. B. A deposit, once established, may be refunded with interest at the standard passbook savings rate, in whole or in part to the person or credited to the account of that person upon receipt by the City of the person's prior utility credit rating deemed suitable by the City Manager or his designee to assure with certainty that the account with the City of Port Angeles will not become delinquent. In the absence of such assurance, the deposit may be retained by the City of Port Angeles until an account is ordered off or otherwise discontinued. The City may then, at its option, apply such deposit to tully pay any remaining charges on the account. Under no circumstances shall any part of the deposit be used as payment for charges until an account has been finalized and all services been discontinued. If circumstances such as timely payment history warrant, the City Manager or his designee may, by determining that the City is • assured with certainty that an account will not become delinquent, release all or part of the deposit with interest at the standard passbook savings rate to the depositor at their request; provided, however, that no such refund will occur tor at least 12 months from the time of deposit. C. A deposit may be required on commercial accounts, in a' manner consistent with the procedure set forth in this Section, when the City Manager or his designee determines that such deposit is necessary, based on utility credit rating and /or payment history. II. PROCEDURE A. New Service Authorization: Prepaid deposits are required to authorize service to new City customers with unknown utility credit ratings and existing or previous City customers requesting additional service connection or reconnection, whose previous history cannot ". . . assure with certainty that the account . . . will not become delinquent. . . ." 1. New Customers: a. Customer PREPAYS deposit to authorize service. b. Customer provided Request form to be sent to their previous utility. (1) Form color- coded. (2) Pre - address, pre - posted envelope provided, return address: City of Port Angeles ATTN: Customer Service. c. Full deposit refunded provided: (1) Form is returned from previous utility; (2) Name used at previous utility matches name and I.D. of person requesting service; (3) Exhibits minimum of one year service; (4) Payment record prompt to fair; (5) Number of past -due notices not to exceed two (2); (6) No history of disconnect for non - payment; (7) No history of NSF checks; (8) No history of accounts assigned to collection agency. d. Partial deposit refund provided: (1) Form is returned from previous utility; (2) Name used at previous utility matches name and I.D. of person requesting service; (3) Exhibits minimum six months' service; (4) Payment record slow to fair; () Number of past -due notices not to exceed two (2); (6) No history of disconnect for non - payment; (7) No history of NSF checks; (8) No history of accounts assigned to collection agency. NOTE: In the case of partial refunds, no reduced deposit shall be less than 30 days' average consumption without the approval of the City Manager or his designee. 2. Existing or Previous Customers a. Inspection of all accounts. b. Credit rating based on most recent credit history on file. (Exception: Previous accounts assigned to collector and yet unpaid.) c. No deposit required: (1) Other account(s) exhibit minimum of one year service; (2) Payment record prompt; (3) Number of past -due notices (indicated as delinquent interest on account records) not to exceed two (2); (4) No history of disconnect or service collection for non- payment; (5) No history of NSF checks; (b) No history of accounts assigned to collection agency ( *) (7) No history of current diversion, fraudulent identification. d. Prepaid deposit required before service is authorized: (1) Full deposit (based on 60 days' average consumption) required of all customers whose previous history does not meet any of the conditions c.3 to c.7 above. (2) Reduced deposit (minimum 30 -day average consumption) can be made where previous history exhibits Minimum of 6 months' service; Payment record Lair; Number of past -due notices not to exceed three (3) . * Previous accounts assigned to collectors - no service shall be granted to previous customers with unpaid utility debts assigned to a collection agency until such debt has been paid or satisfactorily arranged with • CITY OF PORT ANGELES UTILITY CREDIT POLICY /PROCEDURES DELINQUENT NOTICE /REMINDERS I TERMS, GENERAL (See Ordinance #2276) Section 1. Section 4 of Ordinance 2055 and Section 13.16.040 of the Port Angeles Municipal Code are hereby amended to read as follows: 13.16.040 - Bills Delinquent Before Next Monthly Billing - Notice of Delinquent Account. A. All utility bills for the City of Port Angeles shall be delinquent if payment therefor is not received by the City on or before the twenty -fifth (25) day after the current charges date posted on the bill. Such current charges date shall be stated on the bill with particularity. B. Upon lapse of a bill into delinquency, the City Manager or his designee, shall cause a notice of delinquent account to be deposited in the United States Mails, addressed to the consumer as provided in Section 13.16.020. C. .Deposit in the United States Mails pursuant to subsection B of this section shall be deemed full and complete notice to the consumer of the nature and amount of any particular utility billing. D. The notice of delinquent account shall state that unless all delinquencies are corrected within ten (10) days of the date of the notice of delinquent account, the City will disconnect or discontinue utility service without further notice on or after a date certain to be stated in the notice of delinquent account. The notice or delinquent account shall further state that, if the consumer has questions concerning the account or disputes the amount of the account, he may appeal to the Director of the Administrative Services Department, or his authorized designee, whose address and telephone number shall be stated on the notice of delinquent account. E. An account which has become delinquent and for which a notice of delinquency is issued, may be assessed a penalty fee in accordance with City policy defining chronic delinquencies as follows: First assessment, $2.00; Second assessment. $5.00; Third assessment and beyond, $i0 each collector. In either case, a full deposit, based on 60 -day average consumption tor the newly requested service location, will also be required before service can be authorized. 41 B. SERVICE CONTINUATION (Chronic Delinquent Accounts): Deposits and /or additional deposits may be required on a case-by-case basis where sufficient deposit does not exist to cover an average 60 days' peak consumption when customer history depicts a chronic delinquent nature.( *) Payment of such deposits shall be required within ten (10) days' written notice mailed to the customer. C. APPEALS The customer may file a written notice of appeal. The notice of appeal shall state the reasons why the customer is contesting the deposit. The appeal shall be decided by the City Manager or his authorized designee within' ten (10) days of the date of receipt of the notice of appeal. If the determination on appeal is adverse to the customer, the City shall proceed to collect the full amount of the deposit. * "Chronic Delinquent Nature" Defined (One or more of the following: 1. Number of past -due notices exceeds three (3) in any consecutive 11 -month period; 2. Number of service truck collection extensions exceeds two (2) in any consecutive 12 -month period. 3. Number of disconnections for non - payment exceeds one (1) in any consecutive 12 -month period. 4. Number of NSF checks exceeds two (2) in any consecutive 12 -month period. 5. Failure of customer to honor any previous credit agreements. For the purpose of this subsection, when an account receives a third penalty during any consecutive twelve- month/period, the City Manager or his designee may further request a deposit or additional deposit be submitted in accordance with Section 13.16.015, along with payment or arrangement thereof for the delinquent charges due. II PROCEDURE A. Lapse of Bill Into Delinquency - Customer Notification 1. All utility bills are due on receipt, past due if payment does not reach the office by the 25th day after billing. 2. Upon lapse of bill into delinquenty, Reminder Notice of Delinquent Account form is generated and delinquent interest assessed on account balance. a. Original Reminder mailed to customer. b. Copy filed for collection /disconnection on or after 10th day of notice generation (35th day after billing) . • B. Notice Terms /Options 1. Notice requires customer response within ten (10) days of delinquency. 2. Customer pays all delinquent amounts by tenth day - end. 3. Customer does not pay all delinquent amounts but arranges (within ten -day period) for all of delinquent balance on a date satistactorily agreed to between the customer and City Manager or his designee - Cut -off extended to date following promise to pay. a. Customer pays as agreed - end. b. Customer satistactorily re- negotiates first payment promise. c. Customer does not pay as agreed - cut -off ordered. 4. Notice to customer states clearly that: "If it should be necessary to disconnect the service, the FULL AMOUNT of the bill plus all applicable service charges and fees, including a deposit, must be paid before service will be reinstated." C. Chronic Delinquencies 1. Defined: Chronic delinquent accounts are defined as an account which depicts one or more of the following credit conditions: a. Number of past -due notices exceeds three (3) in any.consecutive 12 -month period. b. Number of service truck collection extensions exceeds two (2) in any consecutive 12 -month period. c. Number of disconnects tor non - payment exceeds one (1) in any consecutive 12 -month period. d. Number of NSF checks exceeds two (2) in any consecutive 12 -month period. e. Failure of customer to honor any previous credit arrangements. 2. Penalty fees and deposits: A delinquent utility account which meets one or more of the conditions defining chronic delinquency may be assessed a penalty fee for subsequent Reminder, Noticer of Delinquent Account mailings as follows: First penalty fee = $2.00 Second penalty fee = X5.00 Third penalty fee and beyond - $10.00 each Should a chronic delinquent account be assessed a third penalty fee in any twelve - -month period, a deposit or additional deposit may be required within ten (10) days written notice mailed to the customer. Such deposit shall be based on an average 60 days peak consumption according to specific account history. D. Appeals The customer may file a written notice of appeal. The notice of appeal shall state the reason why the customer is contesting the penalty fees or deposit. The appeal shall be decided by the City Manager or his designee within ten (10) days of the date of receipt of the notice of appeal. If the determination on appeal is adverse to the customer, the City shall proceed to collect the full amount of the deposit and /or penalty charges.