HomeMy WebLinkAbout7 Waiving Customer Deposits DON N11!ER
DistrictPublic Utility tc
Memorandum
To: Board of Directors
From: Mary Chapman, Administrative Services Manager
Date: July 31, 2003
SUBJECT: Consideration of waiving customer deposits for homeowners
1. WHY THIS ITEM IS BEFORE THE BOARD
I was asked by Peter to bring some historical information forward to the Board so the Board could
consider waiving deposits for homeowners.
2. HISTORY
In the 1980's, the District's write-offs were 50% to 100% higher than they are currently. There are
two main reasons why we have been able to decrease the amount of account balances we write-off
each year. The first reason is because in the 1980's, the Board toughened the deposit and collection
policies. The second reason is due to how diligent Mark Schlesinger is at following our collection
procedures. As a result, our write-off percentage has remained at or below one tenth of a percent of
total billings for the last seven years, although it has been on the rise for the last two years. The total
dollars written-off for 2002 are more than twice the amount written-off in 2000. This is not a good
trend.
I have attached for your review the last two write-off lists. The totals are broken down by customer,
showing how much was written-off in the electric department vs the water department. The totals are
also broken down by how much was written-off for homeowners vs renters and how long these
customers have received service from the District. If we exclude World Com, the total amount
written-off for homeowners is 5% of the total. The balance is made up of renters and commercial
accounts.
The District's current deposit policy is as follows:
All residential customers (homeowners and renters) are currently required to meet the District's credit
requirements. If a customer has had service with the District at another location for more than twelve
months and has not had more than 2 late notices, no 48-hour notices, no disconnects for non-
payment or returned checks within the last 12 months, the deposit is waived. If the customer is a
new customer to the District, he/she can establish credit in the same way by providing the same
information from a prior utility only he/she has to have had service with their utility for 24 months. If a
customer is not able to establish credit, we collect a deposit equal to two times the highest monthly
bill at the residence. If the customer has not received more than 2 late notices, no 48-hour notices,
no disconnects for non-payment or returned checks within the next 12 months, the deposit is
returned with interest.
3. NEW INFORMATION
Peter was asked by a director to review our deposit policy and consider waiving our deposit
requirement for homeowners. This request was a result of input he had received from homeowner
customers. As you can see, the amount we write-off for homeowners has been low in comparison to
the total.
Reasons to consider waiving the deposit for homeowners would be:
1. In order for homeowners to qualify to purchase their new home, they would have to have had
sufficient financial resources to purchase their house outright or credit history to qualify for
their mortgage.
2. PG&E is no longer providing payment history information. Many of our customers come from
an area which is served by PG&E.
3. It takes our staff a lot of time when we have to collect deposits or follow up on letters of
payment history or other proof of payment history. It also takes additional time on the other
end when we refund deposits. This change would help save staff time.
Reasons to consider not waiving the deposit for homeowners would be:
1. We would be treating homeowners differently than renters although the write-off statistics
support that maybe they should be treated differently. We would continue to waive deposits
for those renters who were able to meet the District's credit requirements.
2. 1 suspect that we will have additional write-offs since even homeowners can have financial
problems or declare bankruptcy. We could mitigate this potential problem by continuing to
require homeowners to pay a deposit if they are disconnected for non-payment or have to
delay paying their bill beyond the final due date. This is actually required under the current
policy for all customers.
When discussing this issue with the customer services staff and billing department, they expressed
that they too would be in favor of this change in policy with one caveat. That is, there is a group of
customer applications that we receive from the children of homeowners who indicate that they own
the property when in fact their parents own the property. We would propose that all customers who
indicate that they are the property owner should be required to provide us with a copy of their closing
documents or a copy of the deed to the house. In the above case of a child of the homeowner who
is putting service in their name, they would have to prove that they own the property. if they do not,
the service would have to remain in the owner's name, the owner could co-sign or the applicant
would have to meet the credit criteria as any renter would.
RECOMMENDATION:
That the Board amend the deposit policy to waive deposits for customers who provide evidence
of home ownership unless they have been a collection problem in the past or become a
collection problem in the future according to District's credit and collection policies. Staff
should continue to monitor the write-off accounts and report back to the Board if write-offs for
homeowners increase.
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Write-Off Analysis 1992-2002
Accounts closed in: 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992
Write-off amount:
$ 3,516 3,933 (173) (35) (190) (18)
$12,538 12,569 (31)
$ 4,053 5,084 (18) (1,013)
$ 4,474 5,597 (37) (78) (228) (495) (86) (199)
$ 3,633 3,633
$ 3,356 3,939 (133) (345) (57) (48)
$ 3,125 3,873 (65) (465) (49) (169)
$ 4,079 4,601 (56) (110) (230) (64) (62)
$ 3,611 3,752 (64) (37) (40)
$ 4,931 5,102 (116) (55)
$ 5,380 5,750 (59) (69) (213) (29)
$ 7,338 7,946 (317) (24) (173) (84)
$ 3,816 4,080 (171) (61) (32)
$ 7,542 8,113 (420) (17) (22) (97)
$ 3,036 3,711 (660)
See Note $17,592 18,279 (353) (150) (161)
$ 1,622 1,806 (45) (139)
$ 3,867 3,766 304 (79)
$ 4,127 4,495 (121)
$ 6,089 6,209 196
$ 2,041 2,132
$ 8,944 5,704
INr[Ysw1€s 6yyear ;18, $t0,SQ8i sSilQ , S Qt. , S8F1$2 $1 ,1QQ ;11,34Q , , Q$Q .S �Q81 .:;; $7,263 :
Billings(in millions) $20.130 $15232 $13.129 $12.367 $12,010 $12.271 $12.104 $11.449 $10.868 $10.491 $9.605
See Nae
fl,08°fA VAN t�Q�i°k gfl7°� :QQ7°k Q1Q"t� iP.ti$5� #11°l� Q1t4'la,. ii Q1Q?ta,i Q.0�96;
Note: This write-off amount includes$9,733.37 for the Senior Citizens Center. The owner of the project declared bankruptcy. The write-off percentage would have
been.11%(.0011)without these accounts.
Recap: 2002
Write-offs for period $4,790.98
Less recoveries (1,274.64)
Net Bad Debts for last 6 Months $3,516.34
(062003 Write Off Spreadsheet.xls)
Includes all accounts 6 months old @ 6/30/03
ACCOUNTS RECEIVABLE 2002 WRITE-OFF BAD DEBT LISTING-ACCOUNTS SIX MONTHS OLD AS OF 12J31102
..........
. ...... .....
446.21 $18000 collections
113443 235,00 1013-collections
314.76 0.00 collections
4142 100.00 collections
52,87 0,00 collections
843,89 370,00 collections
772,10 215,00 am,Claims-collections
215,68 0,00 yes collections
4321 430.00 collections
160320W24 Chavez,Mana 121,62 5129/1996 6/28t2002 3 121,62 000 collections
1603198026 Cole,Nina 66,15 751/2001 4/26/2002 0 66,15 0,00 66,15 66,15 10a00 collections
5700230024 Delbert,Troy 9.59 911512OW 9/20/2001 1 0,00 9.59 9,59 9,59 0.00 collections
7061740028 Dennen,Jeremy 20715 2f7/2002 3/20/2002 0 20775 0,00 20775 20735 150,00 collections
6016070026 Odder,Eric F 457,25 5/17/2001 3M2/2002 0 406,59 50.66 45725 457.25 150.00 1013-collections
7040430024 Durham,Will 301,54 5/1711999 511/2002 2 301,54 0,00 301.54 301,54 200,00 collections
5860150026 Sill,Matthew 13,34 1/30t2002 51312002 0 1334 0,00 1334 1334 300.00 Collections
5860590024 Farrier,LOU A 491,01 9/15/1994 6113/2002 3 394,86 9615 491.01 491,01 0,00 0.00 collections
3063010024 Fissel,William 32,40 4/1911985 4/1012002 3 32,40 0,00 32.4 32,40 Q.DD collections
455106=4 Fitzpatrick Jana 248.50 9/14W01 1/1812002 0 193,27 55,23 248.5 248,50 0,00 000 Chipt 7 Bankruptcy
7060710024 Franklin,Kevin 958,66 7/12/1995 5/6/2002 3 814,40 144,26 958,66 958.66 100.00 1013-collectims
6331050026 Gainers,Tim 5413 12J3112001 411/2002 0 54,13 0,00 5k 13 54,13 0,00 collections
3061810024 Hartbrich,Uwe 278.64 7117/2000 6f7/2002 1 143.24 135.40 278,64 278,64 230.00 collections
6110410026 Hess,Jim 7.20 7/10t2001 112/2002 0 720 0,00 T2 7,20 a00 collections
6015740024 Hilliard,Lease 452,22 6/111999 212112002 2 394,19 68,03 462,22 462.22 0,00 sin claims-collections
5202810025 Johnson,Aaron 36,23 1117/2000 9112/2001 0 0,00 36,23 36,23 3623 10000 1013-collections
7120340024 Keith,Scott 1751.39 711/1997 511/2002 3 1619,13 132,26 175139 1751,39 255.00 collections-sm claim
1408930025 Ledbetter,Tanya 220.33 529t2001 41812002 0 220,33 0,00 220,33 220,33 100m collections
1603006024 Lorenz,Rodney 23S37 5/5`1999 3/26W02 2 235,37 0.00 235,37 235.37 0,00 yes collections
6132570025 Lozano,John 7657 4t30/2001 2/27/2002 0 4,33 72,24 76,57 76,57 12000 collections
2062200026 Luciani,Gary 50.00 6/2812001 513/2002 0 1923 30.77 50 5000 26DDD collections
6312150024 McClary,Brian 535,80 9119/2000 521t2002 1 424,92 110,88 53S8 53580 285.00 collections
5400850024 Mcleod,Cherie 35,50 10/1311999 4119/2002 2 19,58 15.92 35.5 355 a00 collections
2D42370027 Meyers Candldc, 106,23 11/16/2001 21512002 0 10623 0 106.23 106,23 100.00 collections
5640910026 Minnes,Christopher 1086 7116/2001 3/8/2002 0 0,00 11186 10,86 1086 18500 collections
5321960024 Moll,George 146,22 91611995 1/1112002 3 146,22 0,00 146,22 146,22 000 Collections
5822040024 Nelson,Pamela 246,64 12/3(V1999 5/31/2002 2 166,60 8004 246,64 246,64 0,00
5202050026 Paquin,Jesse 212.08 111512002 4/32002 0 192,23 1985 212.08 212,08 50,00 1013-norlprayofdep-c
3100350024 Rader,Michael C 160,52 3/31/1994 6/3120D2 3 71,05 8S47 160.52 160,52 205,00 collections
770136=4 Sherwood,Raymond P 89.86 5/21t2001 I0V23/2001 0 0,00 8186 89,86 IlIgm 0.00 collections
5325260026 Shook,Lucy 283,42 71212001 6/14/2002 0 179.15 104,27 283,42 283,42 180,00 collections
6020830024 Tang(.4ty,Dal 196,30 1/26/200D 3112002 2 19a30 0,00 196.3 19630 425.00 collections
5054125024 TTT Fleet Services 14,32 12122/1994 1/3/2002 3 0.00 14,32 14,32 1432 a00 collections
70B1150025 Wilcox,Michele 2410 2t2r2001 4130/2002 1 2410 O,OD 241 24,10 130,00 collections
6719330026 Wilson,Ryan 324,03 81612001 6/412002 0 218.04 107,99 324,03 32403 195,00 collections
7080900024 Winter,Don 54,74 10/3/1996 4/1/2002 3 54,74 0,00 54,74 54,74 14000 101 3-collections,
7080380024 Wright,Jennifer 365,90 6/15120DO 2/4/2002 1 328,60 57,30 385,9 385.90 0.00 lac-collections
0
0
TOTAL 12770.96 10,51233 2,258,65 12770.98 1,144,13 11,626,85 12770,98
Summary By Years Of Service.
%Of Tura
Less than I Year of Service 6112,82 48% Bankruptcies 248,50 2,00%
1 to 2 Yews of Service 1234.03 100/0
2 to 3 Yews of Service 1477,57 11%
3 or More Years of Service 3946.56 31%
Told 12770,98 100%
ACCOUNTS RECEIVABLE 2002 WRITE-OFF BAD DEBT LISTING-ACCOUNTS SIX MONTHS OLD AS OF 6130103
p&C# Nat» T fimk' date L#8te Eieekrie. Wakex Ite k 8e�taR
FerWtK?:.:> t3 £f fiinq#/rlt fiotut Owner Renterlactt
30409900258erry,PeterT 71.21 10/312001 7/11/2002 7t21 0 71.21 $130.00 collections
4551351024 Bryer,Cheryl 39.58 12f7/1998 11/12/2002 39.58 0,00 39.58 100.00 collections
6570130029 Clark, Eve 119.83 11/16/2001 11/1/2002 92.72 27,11 119.83 160.00 collections
6155750027 Deto, Margaret 339.73 8/10/2001 9/16/2002 183.06 156.67 339,73 150.00 collections
7600080124 Dunn,Charles G 240.05 521/2001 9/18/2002 240.05 0.00 240.05 190.00 collections
1408760025 Easley,Eric L 41,06 5/17/2001 11/5/2002 41,06 0.00 41,06 100.00 collections
5320880025 Fleetwood,Ardys 182.43 7/30/2002 11/42002 135.72 46.71 182,43 320,00 collections
2042960026 Frazier,Jeremiah 234.82 4/32002 12/112002 144.89 89,93 234.82 300.00 collections
5401380025 Giggy,Chris 107.53 128/2002 7/11/2002 47.84 59.69 107.53 130.00 1013-collections
7600080024 Greenwood, Edmond 55.67 124/1986 9/11/2002 34.98 20.69 55.67 0.00 collections
7080690025 Kalastro,Grant 67.28 8/17/2001 7112002 42.49 24.79 67.28 200.00 collections
6832010024 Keene, Evan A 67.44 8/10/1999 10/42002 35,52 31.92 67.44 200.00 collections
2062670024 Loudenclos,Tracy 139.61 727/1995 1126/2002 92.52 47.09 139.61 0.00 collections
6697430025 Michaud, Matte 1000.57 7/18/2001 7/8/2002 877.36 123.21 1000.57 250.00 collections-sm claims unsuccesful
5800830024 Mousaw,Earle 13.50 729/1998 8/16/2002 13.50 0.00 13.50 175.00 collections
1409110024 Myers, Lisa 40.54 10/8/1999 10/8/2002 26.99 13.55 40.54 610.00 collections
5450660003 Perez,Josefina 109.04 11/282001 12/112002 109.04 0.00 109.04 100.00 collections
4300910024 Phelps, Dale 101.63 6/15/1994 7/11/2002 101.63 0.00 101,63 155.00 collections
2042680026 Ray, Farah 89.14 1122001 12/252002 0.00 89.14 89.14 660.00 collections
6133260025 Sawyer,Tim 216.82 1019/2001 8/52002 94.37 122.45 216.82 0.00 collections
5326020026 Town,Michael 66.99 7/12002 9/30/2002 23.57 43.42 66.99 200.00 collections
5271020024 Vastano,Frank 24327 10/1/1981 11/132002 113.41 129.86 243.27 0.00 collection-deceased
2120760026 Wagner,Joel 168.16 8/12002 12/4/2002 154.22 13.94 168.16 100.00 collections
4550360024 Wissenback,Jack 127.93 9/4/1987 11/182002 32.91 95.02 127.93 0.00 collections
7080870026 Woelfie,Chargal 20.67 524/2001 827/2002 20.67 0.00 20.67 100.00 1013-collections
5450750001 Woodward,Victoria 74.45 7/19/2001 9/11/2002 74,45 0.00 74,45 100.00 collections
5221090024 Worldcom Network 519.67 1/14/1997 862002 519.67 0.00 519,67 0.00 bankruptcy
4401370024 Yokem,William E 210.71 6/1/1999 11/4/2002 134.38 76.33 210.71 285.00 collections
6674870025 Young,Anita&Gerard 81.65 4/30/2001 12/212002 33.11 48.54 81.65 0.00 collections-disputed bill
TOTAL 4790.98 3,530.92 1,260.06 755.13 4,035.85
Summary By Years Of Service:
%Of Total
Less than 1 Year of Service 2235.64 47% Bankruptcies 248,50 5%
1 to 2 Years of Service 995.79 20%
2 to 3 Years of Service 0
3 or More Years of Service 15%55 33%
Total 4790.98 100%