HomeMy WebLinkAboutAgenda Report - January 18, 2012 I-01AGENDA ITEM 14A
CITY OF LODI
COUNCIL COMMUNICATION
Im
AGENDA TITLE: Introduce Revisionsto Lodi Municipal Code Section 13.04 Related to Utility Billing
MEETING DATE:
PREPARED BY
January 18,2012
Deputy City Manager
RECOMMENDED ACTION: Introduce revisions to Lodi Municipal Code Section 13.04 related to
utility billing.
BACKGROUND INFORMATION: Council received information at its December 13, 2011 Shirtsleeve
meeting that the current utility billing practices did not conform to the
underlying ordinance (Lodi Municipal Code Section 13.04). Staff
broughtforward the variances between the current practices and the underlying ordinance and proposed
a number of changes. Council provided guidance with regard to the proposed changes.
The attached revised ordinance codifies the changes discussed at the December 13,2011 Shirtsleeve
meeting. The primary changes are:
• Provide for a 46 -day timeline from first billing to shut cff (increasefrom 30 days allowed under
current ordinance, but reduced from current practice of 70 days)
• Clarify language regarding customer deposits and return of deposits (current language does not
referto return of deposits or non -United States identification requirements)
• Increase number of terms per account per year to two (current ordinance allows one term per
year)
• Shorten maximum length cf term to three months (current ordinance allows six months)
• Codify language regarding current practice related to 48-hour notices (not spoken to in current
ordinance but required by state regulations).
Staff has already revised the billing format to include a due date. Upon adoption of the proposed
ordinance changes, staff will revisethe billing system and internal practicesto conform to the new
language in the billing ordinance.
A redline version of the ordinance is attached.
FISCAL IMPACT: Reducingthe timeline from initial billing to termination cf services should reduce
the dollar volume of bad debt accounts sent to collections. At the same time, late fee revenue is likely to
also be reduced by an unknown amount if the timeline is reduced.
FUNDING AVAILABLE: Not applicable.
Jordan Ayers
Deputy City Manager
APPROVED: C IA/N
Konradt Bartlam, City Manager
ORDINANCE NO.
AN ORDINANCE OF THE LODI CITY COUNCIL AMENDING LODI
MUNICIPAL CODE TITLE 13 — "PUBLIC SERVICES" BY REPEALING
AND RE-ENACTING CHAPTER 13.04 "SERVICE GENERALLY" IN ITS
ENTIRETY
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BE IT ORDAINED BY THE LODI CITY COUNCIL AS FOLLOWS:
SECTION 1. Lodi Municipal Code Title 13 "Public Services" is hereby amended by
repealing and re-enacting Chapter 13.04 "Service Generally" in its entirety, and shall
read as follows:
CHAPTER 13.04 - SERVICE GENERALLY
Sections:
13.04.010 - Definitions.
13.04.020 - Application for service or discontinuance.
13.04.025 - Deposits
13.04.030 - Bill payment and delinquency.
13.04.040 - Connections generally.
13.04.050 - Connection charges.
13.04.060 - Apartments and flats.
13.04.070 - Restriction or interruption.
13.04.080 - Connection or reconnection by plumbers.
13.04.090 - Right of access for inspection.
13.04.100 - Pipe and facility maintenance.
13.04.110 - Service only to contracted premises.
13.04.120 - Bill adjustment.
13.04.130 - Low income adjustments.
113.04.010 - Definitions.
For the purposes of this chapter the following words and phrases when used i
is chapter shall have the meaninas respectively ascribed to them by this section:
�A. "Delinquent bills" means all accounts that have not been paid to the city within
!twenty wafter the mailing twenty-six (26) days after the issue date of the
Ic*-a*t bill for the services provided for by this chapter.)
IB. "Director of finance" means the person named from time to time by the city)
Imanaaer to be in charae of the financial records and accounts of the citv.1
IC. "Electric connection" means all wires, insulators, conduits, fuse blocks, fuses and)
switches up to and including the meter used to connect the consumer's electric wiring to
the citv's electrical distribution system.
ID. "Garbage collecting service" means that service described in Chapter 13.16
Irelatina to aarbaae.I
1
JE. "Sanitary sewer tap" means all connections, valves, pipes and fittings used to
connect the customer's sewer system to the citv sewer mains.
F. "Service" means the supplying of water, electrical energy, the collection o
arba a and the disposal of sewage.
G. "Sewage disposal service" means that service provided for in Chapter 13.12
relating to sewers.
IH. "Water tap" means the connection valves, pipes and fittings used to connect they
customer's water system to the citv water mains.
13.04.020 - Application for service or discontinuance.
All applications for service or discontinuance of service shall be made to, a
n forms provided by, the director of finance on forms prGynded by him T
irector of finance shall issue all orders for services, changes or discontinuances.
3.04.025 — Deposits.
1. Services. A deposit for the furnishing or continuance of service may be
required by the director of finance. Such deposit shall not exceed the estimated
amount of charges for two months' service.
2. No United States Issued Identification. In addition to a deposit for
services, the director of finance may require a deposit not to exceed the
estimated amount of charges for two months' services of a customer who is
unable to provide a United States issued identification.
13. Length of Deposit.)
a. Deposits for services shall remain on the account until twely
consecutive billing periods have passed without late charge
being assessed, unless the account is discontinued prior to suc
event. Return of deposit amounts shall be in the form of a credit t
the account, unless the account is discontinued, in which case th
deposit shall be applied to the final billing and any excess shall b
returned to the customer by check.
b. Deposits for no United States issued identification shall remain o
the account until the account is discontinued, or until valid Unite
States issued identification is provided. Return of deposit amount
shall be in the form of a credit to the account, unless the accour
is discontinued, in which case the deposit shall be applied to th
final billinq and anv excess shall be returned to the customer b
13.04.030 - Bill payment and delinquent .
061
IA. Payment. All bills for the services enumerated in this chapter are due andl
payable upon receipt thereof, at the finance divisiond, Lodi, California, andl
become delinquent twenty twentysix (26) days after the issue date of the bill.
IB. Delinquency. The director of finance shall send notice of delinquent bills, and i
finance director when nnncideFed to be in the host interest of the ,.,f., when thel
customer can present evidence of financial hardship or convincing information
fall delinquent charges for service are not paid within ten days after mailing this
that timely payment could not have been reasonably expected.
notice, then the director of finance may discontinue all service furnished to they
customer by the city. Within this ten day notice period, the director ofj
finance shall provide a notice 48 hours prior to discontinuance of
services. Prior to any discontinuance of service furnished to the customer b
the city, the customer may request the opportunity to be heard as to any
adjustment or cancellation of any bill. The hearing shall be held before thel
director of finance or his designee. In the event of a discontinuance of service,
las provided in this subsection, the director of finance may require as al
condition precedent to the resumption of service that the customer pay:1
1 1. All amounts due and owing;;
1 2. The cost to the city of discontinuing and resuming service; and
1 3. A deposit in an amount not exceedina the estimated amount of charaesl
two months' service
finance director may waive delinquent amounts and
ule for UD to three months (within anv twelve-month
govate a rer
when in the
lof the finance director the customer can demonstrate financial hardship. No more than)
nt schedules may be allowed in anv twelve-month period
IC. Closing Bills. Closing bills are due on the date on which service is discontinued.
D. Late Charges. Delinquent bills shall be assessed a late charge which will be set
from time to time by the city council. The late charge may be waived by thel
finance director when nnncideFed to be in the host interest of the ,.,f., when thel
customer can present evidence of financial hardship or convincing information
that timely payment could not have been reasonably expected.
113.04.040 - Connections generally.
INo person except a duly authorized employee of the city shall make any water,j
lelectrical or sewer service connection to the city supply lines. Water and sewer tappings
lincludes bringing the supply lines to a point six inches inside the property linea
Electrical connection includes the service drop and necessary meter. On all new ands
reconstructed buildings where water, sewer and electrical connections are involved,
the equipment and equipment locations must be approved by the inspecting authority.
A service charge will be charged to the applicant when trouble calls involve custome
caused service interruptions. All costs of water tapping and sewer connections shall be
borne by the applicant and shall be charged at actual cost to the city. However, a flat
Irate may be established by the provisions of Section 13.04.050.1
13.04.050 - Connection charges.
IThe public works director may, with the approval of the finance director
tablish or change rates charged for water and sewer connections based on the
erage cost to the city for such connections made within the preceding six-month
riod.l
113.04.060 - Apartments and flats.1
When more than one flat, apartment, building or premises is supplied through
one water tap, each occupant may pay his own water and sewage bill if flat rates
apply. However, if at any time the water is used by an occupant and such fact is nota
reported to the city, the director of finance may require that the owner or the owners'
agent -in -charge pay all the water and sewage charges applying to the flats,
apartments, buildings or premises being supplied through one tap.1
113.04.070 - Restriction or interruption.
IThe city reserves the right to limit the amount of water supplied to an)
stomer or to different parts of the city should it appear necessary so to do, and shal
t be liable for temporary discontinuance of any service while making repairs o
)lacements.l
113.04.080 - Connection or reconnection by plumbers.
INo plumber shall leave water turned on at any newly erected building unless
by consent of the city, nor shall he connect or reconnect any service found shut c
t the service stop.
3.04.090 - Right of access for inspection.
(Authorized employees of the city shall have the right of access to any
!ceiving any service named in this chapter at reasonable hours for the pu
spection.l
113.04.100 - Pipe and facility maintenance.
IThe owner or occupant of premises where city services are supplied shall
II service pipes, valves, connections or other facilities used in connection with
upply in good repair at all times, and the city shall not be liable for damage sust
v reason of such owner or occupant's nealect.l
113.04.110 - Service only to contracted premises.
INo person shall supply service to any premises other than the one to which thel
contract applies.)
113.04.120 - Bill adjustment.
2
pplication for the adjustment or cancellation of a bill any consumer believes to
be inconsistent with the provisions of this code or other ordinances of this city relating
to water, electric, garbage and sewage services shall be made to the director o
finance. Appeal from the decision of the director of finance may be made to the city
manager whose decision may, upon request, be subject to a final review by the city
council.
113.04.130 - Low income adjustments.1
The rates for residential refuse collection service as they now exist or may
hereafter be modified under this chapter, shall be reduced as established by resolution
for those residential accounts in the names of persons meeting the eligibility criteria fo
applicable electric service discounts as provided in this title. Proof of eligibility will be
required by the city to qualify for the rate adjustments provided herein.
Section 2 - No Mandatory Duty of Care. This ordinance is not intended to and shall not
be construed or given effect in a manner which imposes upon the City, or any officer or
employee thereof, a mandatory duty of care towards persons or property within the City
or outside of the City so as to provide a basis of civil liability for damages, except as
otherwise imposed by law.
Section 3. All ordinances and parts of ordinances in conflict herewith are repealed
insofar as such conflict may exist.
Section 4. This ordinance shall be published one time in the "Lodi News Sentinel," a
daily newspaper of general circulation printed and published in the City of Lodi, and shall
be in force and take effect 30 days from and after its passage and approval.
Approved this day of , 2012
JOANNE L. MOUNCE
Mayor
Attest:
RAND JOHL
City Clerk
State of California
County of San Joaquin, ss.
I, Randi Johl, City Clerk of the City of Lodi, do hereby certify that Ordinance
No. was introduced at a regular meeting of the City Council of the City of Lodi held
January 18, 2012, and was thereafter passed, adopted, and ordered to print at a regular
meeting of said Council held , 2012, by the following vote:
AYES: COUNCIL MEMBERS —
5
NOES: COUNCIL MEMBERS —
ABSENT: COUNCIL MEMBERS —
ABSTAIN: COUNCIL MEMBERS —
I further certify that Ordinance No. was approved and signed by the Mayor of the
date of its passage and the same has been published pursuant to law.
Approved as to Form:
D. STEPHEN SCHWABAUER
City Attorney
2
Randi Johl
City Clerk
Utility Billing
City Council
January 18,, 2012
Overview
■ Timelines
■ Summary of Changes
Current Timeline
(not compliant with existing ordinance)
Days
0 21 26 30 47 49 51 56 60 62 70
$15 late
Month 1 fee - 10 day Month 2
Month Bill 5 day Month 2 Month 1 shut off Bill 5 day Month 48 hour Utilities
1 Bill jDelinquentj grace jBill jBill Inotice jDelinquent J 1grace 13 Bill Inotice I shut off
$10 late
Fee
Customer has 3 months service before services terminated
Includes a 5 day grace period for each billing cycle
More flexible than current ordinance language
3
Days
0
Month 1
Bill
Proposed Timeline
26
Month 1
Bill
Delinquent
$10 late feel
30
Month 2
Bill
36
10 day
shut off
notice
$15 late
fee -
Month 1
bill
MI
M
48 hour Utilities
notice shut off
Provides 26 calendar days for payment
Eliminates grace period
Customer has 2 1/2 months service before services terminated
Summary of Changes
■ Due Date
■ Provide for 26 days from issue date to
delinquency
■ Provide for 46 days from first billing to shut
off
■ Deposits
■ Clarify language for Services and No US ID
Proposed Changes
■ Terms
■ Allow two terms per 12 -month period
■ Shorten maximum length of term to 3 months
(ordinance allows 6 months)
■ Notices
■ Codify 48-hour notice within the 10 -day notice
period
XI
Requested Action
■ Introduce ordinance amending Lodi
Municipal Code Title 13 — ""Public Services""
by repealing and re-enacting Chapter
13.04 "Service Generally"" in its entirety
7
From: Jordan Ayers
Sent: Wednesday, January 18, 2012 2:56 PM
To: Ed Miller
Cc: Alan Nakanishi; Bob Johnson; JoAnne Mounce; Larry Hansen; Phil Katzakian; Rad Bartlam;
Steve Schwabauer
Subject: RE: 1/18/2012 City Council Meeting Meeting - Agenda Item 1-01, Utility Billing Costs
Mr. Miller
The discussion regarding the ordinance and staff process is a little bit of a 'which came first --the
chicken or the egg' discussion. We can set the ordinance and conform staff processes to the
ordinance or set staff processes and conform the ordinance to them. We acknowledge that
current processes don't match the ordinance and brought that to Council. We got a clear
message from Council that the ordinance should be changed. We are bringing forward that
change and will conform staff processes to the new ordinance.
agree with you that if we had been following the 30 day timeline in the current ordinance we
likely would have had a much smaller write-off of bad debt than the $500K amount. Our lack of
compliance pre -dates my tenure with the City. The ordinance changes and resulting process
changes are intended to ensure that we do comply with the ordinance that will be in place.
The 46 day timeline is what we expect to operate under for shut off of utilities. The 46 days may
shift if the 46th day were to fall on a day that is nota scheduled workday for the City. I n that
event, the shut off would occur on the nextworking day.
hope this adequately responds to your concerns.
Jordan Ayers
Deputy City Manager/Internal Services Director
City of Lodi
221 W. Pine Street
Lodi, CA 95240
Phone (209) 333-6700
Fax (209) 333-6807
E -Mail jayers@lodi.gov
From: Ed Miller[mailto:ed_miller946@sbcglobal.net]
Sent: Tuesday, January 17, 2012 9:59 PM
To: Jordan Ayers
Cc: Alan Nakanishi; Bob Johnson; JoAnne Mounce; Larry Hansen; Phil Katzakian; Rad Bartlam;
Steve Schwabauer
Subject: Re: 1/18/2012 City Council Meeting Meeting - Agenda Item I-01, Utility Billing Costs
Mr. Ayers,
Thank you for your response.
Yes, I am clear that the ordinance change is different than City Staffprocesses
and procedures. However, they are inseparable.
I would make the case that this ordinance change would not even be necessary
nor would a majority of the $500K/year been lost if the City Staffhad followed
the currently approved City Council ordinance of 30 -days to disconnect.
Would customers be "gaming the system with a 30 -day cycle? Probably not.
This is a very serious quality issue implying the City does not have process
control appropriate to be in compliance with established ordinances. Why
should the Council and the citizens of Lodi have confidence that the revised
process will be any better than the present one or that the process will be in
compliance two years from now? If you announce in the meeting that this
problem will be reviewed and resolved in a near future shirtsleeve meeting,
then I would say OK.
What does "normal time line to shut-off mean? Average, median,
maximum/not to exceed? This does not sound like a commitment to a
performance metric.
I will take your word that the sufficiency of the late fees will be reviewed in the
near future.
I do not doubt the late fee revenue totals other than they are probably overstated
because I suspect the City loses money with each late notice issued. In the
shirtsleeve meeting I thought I heard you say these revenues are associated with
the electrical utility only. Is that plausible? (64,000 transactions per year or
5,333 per month? - See the 12/13/2012email below)
Thank you again for taking the time and trouble to response to me.
Regards,
Ed Miller
On 1/17/20125:25 PM, Jordan Ayers wrote:
Mr. Miller
Thank you for your note. Allow me to provide the following:
9. The proposed ordinance changes do not specify the practices and procedures that will be
changed to conform to the revised ordinance. I will be responsible for ensuring that our operating
processes conform to the new timelines and that our on-going practices conform to the underlying
ordinance. The 46 day time line is expected to be the normal time line for shut off.
2. The sufficiency of the late fees is a subject for another day. The ordinance at hand relates to
the billing process. Late fees are set separately by resolution of the Council. Staff is currently
reviewing these fees. The fees are automatically assessed by the billing system without manual
intervention.
3. Actual Late Payment Revenue for fiscal year 2008109 was $838,651; for fiscal year was
2009/10 $906,609; for fiscal year 2010/11 was $880,869; budgeted late fee revenue for fiscal
year 2011/12 is $860,000.
If you have any other questions, let me know.
Jordan Ayers
Deputy City Manager/Internal Services Director
City of Lodi
221 W. Pine Street
Lodi, CA 95240
Phone (209) 333-6700
Fax (209) 333-6807
E -Mail iayers(c)lodi.gov
From: Rad Bartlam
Sent: Saturday, January 14,2012 9:44 AM
To: Jordan Ayers
Subject: Fwd: 1/18/2012 City Council Meeting Meeting - Agenda Item 1-01, Utility Billing Costs
FYI
Sent from my Whone
Begin forwarded message:
From: Ed Miller <ed miller946AsbcRlobal.net>
Date: January 14,2012 9:01:50 AM PST
To: "anakanishi(a,lodi.jzov" <anakanishinlodi.gov>, Bob Johnson
<biohnsonalodi.gov>, JoAnne Mounce <JMounceQ)1odi.gov>, "lhansen(a�lodi.gov"
<lhansen(d�lodi.zov>, Phil Katzakian <PKatzakian(a)lodi.gov>, "rbartlam(i�lodi.gov"
<rbartlamAlodi.gov>, "sschwabauer(�lodi.pov" <sschwabauerQlodi.gov>
Subject: 1/18/2012 City Council Meeting Meeting - Agenda Item 1-01, Utility Billing
costs
Mayor and Council,
To avoid a "dust-up" in next Wednesday night's Council meeting concerning
Agenda Item I-01,1 thought it timely to raise my concerns via email first.
Generally, I have no issues with the proposed City Ordinance per se. My only
observation is the process steps that make up the 46 -day time line are
ambiguous. In addition, is the 46 -days cycle a maximum or average
requirement?
My concerns are that what is proposed is incomplete unless the plan is for
closure in the near future. Briefly, here are my concerns:
1. What is the corrective action to insure the Staff s process will be
compliant with the ordinance's cycle time requirements in the
future.
a. The lead problem statement in the 12/13/2011 "shirtsleeve"
meeting agenda was "...the City's current billing processes
do not conform to the underlying ordinance..." What
is/was the root cause of the problem? How will this
process drift be avoided in the future?
2. Is the City losing money with the late notice fee process
particularly in light of the public's use of the process for "low cost
loans?" (see email of 12/13/2011 below)
a. If it is, then how much is being lost in the aggregate?
b. What action is appropriate? Do nothing, increase fees,
decrease cost of the City's process or a combination of fee
increase/reduce City's cost?
3. Much was made of the $ 800k income allegedly from the late
notice fees. The data presented in the "shirtsleeve" meeting was
not plausible at least for the Electric Utility. What are the real
numbers in the clear? (see email of 12/13/2011 below)
Regards,
Ed Miller
On 12/13/20112:19 PM, Ed Miller wrote:
Mayor Mounce made an interesting point this morning that the $800,000 per
year cash flow to the City for electrical late fees is a moneymaker. On
reflection, I doubt it.
A wild guess, from the numbers presented, is that approximately 64,000
transactions per year or 5,333 per month (using an average late fee of $12.50
each) are required. Even discounting the 40% working the system, that is a ton
of transactions. Similar to my purchase requisition/purchase order cost and
cycle time question of several months ago, what is the cost and cycle time
metric for the City to process late fees/notices? Can the City perform the
process for less than $12.50 each?
I assume Staff must run a report, "sanity-check"the report, perform some
action(s) or transaction(s) to generate one of the two late notices, get the notices
to the City's mail service, pay the mail service, pass at least one managerial
review/approval, etc. City Staff hourly rate (fully loaded) has to be >$75 per
hour and the above guess of the City's process will probably add up to -0.5-
hour or $37.50 per late notice (at least 6 -steps @ —5 -minutes each). For the
City to breakeven at $12.50 per transaction, the above process must be
performed in —10 minutes ($12.50 x 60-minutes/$75). Admittedly, the
preceding is a wild guess, but the point is if the City cannot process late fees
and notices for $12.50 or less, it is losing money, not "making" money. I think
this would be a relevant metric that City Staff and Council would find useful
now and going forward and worth developing. You may find that the late fee
schedule is too low to appropriately cover the City's costs and discourage those
working the system.
Much was made in the meeting of the need to be compassionate to electrical
customers who are down on their luck and unable to pay their bills. While I
agree, I also agree with the comments about the other customers experiencing
hard times that somehowpay their bills and do not work the City's system as a
low cost credit bureau. Regarding a potential $150,00-200,000 per year
reduction in lost revenues/write-o ffs (by tightening -up the late/disconnect
cycle), I appear once again out-of-phase with the City Council in that I see this
as an opportunity to control costs and the savings should not be sloughed-offas
"not a big deal." People who are paying their bills deserve that at least.
Regards,
Ed Miller