HomeMy WebLinkAboutAgenda Report - March 21, 2012 C-10AGENDA ITEM Co
(1)CITY OF LODI
COUNCIL COMMUNICATION
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AGENDA TITLE: Adopt Resolution Setting Late Fees for Delinquent Utility Bills
MEETING DATE: March 21, 2012
PREPARED BY: Deputy City Manager
RECOMMENDED ACTION: Adopt resolution setting late fees for delinquent utility bills.
BACKGROUND INFORMATION: Earlierthis year, Council approved changes in the utility billing
ordinance and was advised that a $10 late fee would attach to
delinquent accounts on the 27th day after billing, a $15 late fee
would attach to delinquent accounts on the 37th day after billing and a $25 late fee would attach to
delinquent accounts on the 47th day after billing and each month thereafter. Staff advised Council that
this timeline was not in accordance with our current resolutions regarding late fees and that staff would
bring back a resolutionto conform the billing practices and resolutions. The recommended resolution
conforms the timing of attaching late fees to accounts to the practices approved by Council in the latest
timeline.
Late fee amounts have not changed since 2003 and staff is not recommending that the amounts be
changed at this time. Revenues generated from late fees were about $881,000 in Fiscal Year 2010/11
and are projectedto be a little above $900,000 for Fiscal Year 2011/12.
During Fiscal Year 2010/11, the City issued about 6,325 utility bills each month (75,900 annually) that
contained some form of late charge. This represents about 25 percent of the monthly utility bills. While
the calculation and issuance of utility bills is automated, bills with late charges generate a significant
number of calls to customer service staff. Additionally, the separate late notices that are mailed to these
6,325 customers each month represent an additional expense of about $50,000 annually to the City and
also generate a significant number of calls. These calls are generally for explanation of the charges,
requests regarding waiving or rescinding late charges and for making terms to pay the delinquent bills to
avoid further late charges or account shut-off. Assuming that 40 percent of the delinquent accounts
contact Finance staff each month, it is estimated that annual costs for respondingto these calls ranges
between $645,000 and $1.2 million, depending upon the average duration of the calls.
FISCAL IMPACT: Late charge revenue is about $900,000 per year. It is anticipated that the
recent changes to the utility billing timeline will reduce this revenue stream,
but the total impact cannot be reasonably estimated at this time.
FUNDING AVAILABLE: Late charge revenue of close to $900,000 annually supports the City
activities in assessing, noticing, collecting and explaining late charges to
our custom rs.
Jordan Ayers
Deputy City Manager
APPROVED:
`knnridt Bartlam, Manager
RESOLUTION NO. 2012-27
A RESOLUTION OF THE LODI CITY COUNCIL
SETTING LATE FEES FOR DELINQUENT
UTILITY BILLS
WHEREAS, Lodi Municipal Code Section 13.04.030 (D) states that the City
Council shall from time to time set late charges for delinquent utility bills; and
WHEREAS, the City Council last acted on setting late fees on delinquent utility
bills in July 2003; and
WHEREAS, the City Council adopted changes to Chapter 13.04 of the Lodi
Municipal Code in February 2012; and
WHEREAS, the City Council determines that it is necessary to adopt a resolution
setting the late fees and the timing of attaching said late fees to delinquent utility
accounts.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Lodi
does hereby set the following late fees and the dates upon which said late fees attach to
delinquent utility accounts:
Late Fee
Amount
Date Fee Attaches to Delinquent Account
$10
27 calendar days after bill issued
$15
37 calendar days after bill issued
$25
47 calendar days after bill issued and every month
thereafter
Dated: March 21, 2012
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hereby certify that Resolution No. 2012-27 was passed and adopted by the City
Council of the City of Lodi in a regular meeting held March 21, 2012, by the following
votes:
AYES: COUNCIL MEMBERS — Hansen, Johnson, and Katzakian
NOES: COUNCIL MEMBERS — Nakanishi and Mayor Mounce
ABSENT: COUNCIL MEMBERS— None
ABSTAIN: COUNCIL MEMBERS — None
aNIFER . ROBISON
Mssistant City Clerk
2012-27