HomeMy WebLinkAboutMinutes - January 28, 2014 SSLODI CITY COUNCIL
SHIRTSLEEVE SESSION
CARNEGIE FORUM, 305 WEST PINE STREET
TUESDAY, JANUARY 28, 2014
A. Roll Call by City Clerk
An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held
Tuesday, January 28, 2014, commencing at 7:20 a.m.
Present: Council Member Johnson, Council Member Mounce, Council Member Nakanishi,
Mayor Pro Tempore Hansen, and Mayor Katzakian
Absent: None
Also Present: City Manager Bartlam, City Attorney Schwabauer, and City Clerk Johl-Olson
B. Topic(s)
B-1 Receive Information Regarding Utility Late Fees, Re -Connect Fees, and Collections (CM)
Deputy City Manager Jordan Ayers provided a PowerPoint presentation regarding late charges,
reconnection fees, and collections. Specific topics of discussion included late charge history, late
charge revenue, reconnection fees and revenue, shut off timelines, bad debt write off, and other
agency comparisons on late fees, connection fees, and shut off timelines.
In response to Council Member Mounce, Mr. Ayers stated on the 27th day there is a $10 late
charge, on the 36th day there is a $15 late charge for a total of $25, and on the 50th day there is
an additional $25 charge equaling $50 in total late charges assessed to the account.
In response to Mayor Pro Tempore Hansen, Mr. Ayers confirmed that the utility bill includes a
delinquent message stating the amount of late charges, delinquency due date, and shut off date if
applicable.
In response to Council Member Mounce, Mr. Ayers stated late charges are not assessed
when City Hall is closed because when City Hall reopens collections are processed first before
late charges are assessed.
In response to Council Member Nakanishi, Mr. Ayers stated some companies and individuals do
routinely pay late fees as a usual part of their utility bill payments.
In response to Mayor Katzakian, Mr. Bartlam stated that overall people that pay late have not
been swayed by the new 2012 time frame.
In response to Council Member Hansen, Mr. Ayers stated bad debt has gone down significantly
since the new time frame was put into place.
In response to Council Member Nakanishi, Mr. Ayers stated the return numbers from bad debt
collection through an agency are hard to quantify but they are likely to be a dime on the dollar.
In response to Council Member Mounce, Mr. Ayers stated collection agency fees are scaled
based on the time to collect the debt with the addition of administrative fees and interest rates.
In response to Mayor Pro Tempore Hansen and Council Member Mounce, Mr. Ayers provided an
overview of the collections process.
In response to Council Member Mounce, Mr. Ayers stated the current ordinance does not allow
liens against property owners of apartment complexes. Mr. Schwabauer stated shutting off
service for multi -family units is difficult. Mr. Schwabauer reviewed the shut off process and
legislation associated with the same.
In response to Council Member Nakanishi, Mr. Ayers stated the average utility bill is $200 to $300
and therefore a 10% late charge would be $20 to $30, which is consistent with the current late
fees charged by the City.
In response to Council Member Mounce, Mr. Ayers stated service is shut off at the pole when the
City does not have access to the property or an individual is routinely stealing electricity.
In response to Council Member Hansen, Mr. Ayers stated reconnections do happen after hours
on rare occasions when a customer comes into the office late or Electric Utility staff is unavailable
during the day. Mr. Ayers confirmed that the fee covers staff cost for reconnection.
In response to Council Member Mounce, Mr. Ayers stated he will provide data regarding whether
the bulk of late charges are residential or commercial and what those charges are
respectively. Further, Mr. Ayers confirmed that late fees go to the General Fund and reconnection
fees go to the Electric Utility.
In response to Council Member Hansen, Mr. Bartlam stated the average late fee collected is $11
indicating that customers pay primarily the first late fee and not the additional late fees.
In response to Mayor Katzakian, Mr. Ayers stated with the bad debt write-off process, each utility
and the General Fund bears its own charges.
In response to Council Member Hansen, Mr. Ayers confirmed that reconnections are up
significantly over the last four years, which could be based on fee changes, time frame changes,
and volume.
Ed Miller spoke in regard to his preference for the City to ascertain all staffing costs associated
with the collection and shut off process and compare that to revenue generation to ensure
the process is self-sustaining.
Rob Lechner stated there are low-income programs available to assist individuals with their utility
payments, most late commercial accounts are G-1 indicating they are small businesses, and the
top 25 businesses are usually not in arrears.
In response to Myrna Wetzel, Mr. Ayers stated the reconnections involve both new and older
accounts.
C. Comments by Public on Non-Aaenda Items - None
D. Adjournment
No action was taken by the City Council. The meeting was adjourned at 8:20 a.m.
ATTEST:
Randi Johl-Olson
City Clerk
AGENDA ITEM)� I
CITY OF LODI
,. COUNCIL COMMUNICATION
TM
AGENDA TITLE: Receive Information Regarding Utility Late Fees, Re -Connect Fees and Collections
MEETING DATE: January 28, 2014
PREPARED BY: Deputy City Manager
RECOMMENDED ACTION: Receive information regarding utility late fees, re -connect fees and
collections.
BACKGROUND INFORMATION: During the presentation of the Comprehensive Annual Financial
Report for the year ended June 30, 2013, Council requested
additional information regarding utility late fees, re -connect fees and
collections. Staff will present historical information related to these items along with information from
surrounding communities with respect to these items.
FISCAL IMPACT: Late charge and re -connect fee revenue totaled about $1.3 million for fiscal year
2012/13 and are on track for similar amounts for fiscal year 2013/14.
FUNDING AVAILABLE: Not applicable
JAfja
Cie
Jordan Ayers If
Deputy City Manager
Bartlam, City Manager
City Council Shirtsleeve
January 28, 2014
Late Charge History
• 1997
• $5
3o days past due
0 $10
6o days past due
• $25
go days past due & every 3o days thereafter
• 2003
• $10
3o days past due
• $15
6o days past due
• $25
go days past due & every 3o days thereafter
• 2012
$10 27 days after bill issuance
• $15 36 days after bill issuance
• $25 47 days after bill issuance & every month thereafter
• Approved by Council by Resolution
Late Charge Revenue
$1,400,000
$1,200,000
$1,000,000
$800,000
$600,000
$400,000
$200,000
R
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
■ Revenue i Instances
3
Re -Connect Fees
� Charged when service is re -connected following a shut
off for non-payment
• 2004
$33
• 2012
• $75
• Based upon time study of Field Service Representatives
4
Re -Connect Fee Revenue
$200,000
$180,000
$160,000
$140,000
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
$0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Shut Off Timeline
• Before Zoog---77 days
• Zoo9 Administratively changed to 55 days
• Reality was 7o days
02012 --- 46 days
• Based upon ordinance change
M
Bad Debt Write Off
$1,800,000
$1,600,000
$1,400,000
$1,200,000
$1,000,000
$800,000
$600,000
$400,000
$200,000
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2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
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2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
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What Others Do -Late Fees
• Lodi---bio/$15/$25
• Biggs --- io% of current charges
• Palo Alto --- a% of bill amount
• Redding---$16/a2o Residential; 3%/$2OCommercial
• Roseville --- $io
• Ukiah ---$5/$5/$z5
• SMUD--- i.5% of amount due
N
What Others Do -Re -Connect Fees
• Lodi ---875
• Biggs --- $50
• Palo Alto --- Szi8
• Redding ---$50/89
• Roseville ---$x5/$85, Residential; $150/$175 Commercial
• Ukiah ---$Z5
• SMUD--- $a5/$155
• PG&E---dao/$37.50
VI
What Others Do -Shut Off Timeline
• Lodi ---Day 46
• Biggs --- Day 35
• Palo Alto ---Day 50
• Redding ---Day 45
• Roseville --- Day 32
• Ukiah ---Day 56
• SMUD --- Day 52
• PG&E ---Day 40
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Questi*ons?
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