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HomeMy WebLinkAbout11 Resolution revising DC Billing foreclosed acctsAgenda TRUCKEE DONNER Public Utility District ACTION To: Board of Directors From: Robert Mescher Date: August 03, 2011 Subject: Consideration of a Resolution Revising District Code - Sections 5.08.10.9 and 5.12.040.1 Regarding the Billing of Foreclosed Customer Accounts 1. WHY THIS MATTER IS BEFORE THE BOARD The District Code should be periodically reviewed and updated, and only the Board can approve District Code revisions. 2. HISTORY Current District Code specifies that under no circumstance shall the billing of water service discontinue, once activated. There are certain customers who are in the process of a foreclosure of their home that has been vacated or that has been possessed by the bank. The District disconnects the customers' electric and water services for non-payment, but the basic water charges continue to be billed. The customers are unable to pay the water bills. Many months pass before the ownership of the property changes. The uncollected balance of the water is then written off. 3. NEW INFORMATION The likelihood of collecting the unpaid water bill balances of foreclosed customers is near zero, yet the District incurs an estimated cost of $30 per month per delinquent account for its collection efforts. The estimated collection expense for the ten accounts in the previous example would be about $300 per month or $3,600 per year. The proposed changes to District Code are as follows: 5.08.010.9 added the phrase, "Except for a disconnect qualifying under Section 5.12.040. 1 (E) " 5.080.010.9(A) deleted the phrase, "regardless of occupancy" 6.12.040.1 added the phrase, "Except for a disconnect qualifying under Section 5.12.040. 1 (E) " Added a new section: 5.12.040.1(E) Inactive and foreclosed accounts - So long as all three of the conditions stated in 5.12.040.1(E)(1) through 5.12.040.1(E)(3) exist for a customer account, service may be disconnected and all future billings, including water, may discontinue. It is the customer's responsibility to notify the District and provide sufficient evidence of those three conditions. Bills will not be adjusted retroactively and no refunds will be issued. A reconnect fee equivalent to time and materials may be charged at the time of reconnection. 5.12.040.1(E)(1) The customer's service location is in the process of foreclosure, as evidenced by county records of a notice of default, foreclosure judgment, or bank ownership. 5.12.040.1(E)(2) The service location is vacant and unoccupied. 5.12.040.1(E)(3) No electric and water use was recorded during the most recent billing period. Attachment 1 is a redlined draft of District Code, Title 5 Sections 5.08.010.9 and 5.12.040.1, and Attachment 2 is a proposed resolution revising the District Code. 4. FISCAL IMPACT The revised District Code, if approved, would reduce revenue, but would be mostly offset by the reduced write-off of uncollected accounts. The estimated collection cost savings in the near -term could be as much as $10,000 per year. 5. RECOMMENDATION Approve the resolution "Adopting Amendments to the District Code Title 5, Sections 5.08.10.9 and 5.12.040.1 Regarding the Billing of Foreclosed Customer Accounts." Robert Mescher � a Michael D. Holley Acting Administrative Services Manager General Manager ATTACHMENT 1 5.08.010 Billing Procedure 5.08.010.9 Monthly water billings for any existing water service, once activated, are to continue in an owner's name or a qualified renter or tenant's name. Except for a disconnect qualifying under Section 5.12.040.1(E), Bbilling will not be discontinued for a customer requested disconnection, disconnections for non-payment or for repair of customer lines. 5.080.010.9(A) Monthly water billings for homes in foreclosure, regardless e essu y, shall remain in the name of the owner of record based on county records until such time as a bank, mortgage company or new owner files a change in title or the customer provides evidence that they are no longer the legal owner of the property. Once new ownership of the property is established, the water account will be transferred into the name listed on the county record as of the property sale or transfer date. 5.080.010.9(B) Monthly electric and/or water billings for properties in the foreclosure process or on a "short sale" may be transferred into the name of a realtor or property manager provided the realtor/property manager completes a service application for said property and meets the deposit and credit requirements established in Chapters 5.02 and 5.04. The realtor/property manager will be required to put all services (electric and water) into their name. Transfer/connection fees as established by the most recently adopted Miscellaneous Fees Schedule shall apply. 5.12.040 Disconnection of Electric or Water Service by the District 5.12.040.1 With Notice The District may disconnect electric or water service for any one or more of the reasons contained in this rule. Except as otherwise specifically provided here, Public Utilities Code Sections 16481, 16482 and 16483 and any subsequent amendments, shall apply regarding any disconnect of service. Except for a disconnect qualifying under Section 5.12.040.1(E). Wwater billings will continue 5.12.040.1(A) Non-payment of bills - the District may disconnect or refuse service if a customer has not paid his/her bill for electric or water service rendered, reconnection charges, and/or cash deposit as required by the District. Refer to Section 5.12.010.4 Termination for Non -Payment. 5.12.040.1(A)(1) Default on amortization or payment agreements — the District may disconnect electric or water service if a customer has failed to meet the terms of said agreement. 5.12.040.1(B) Negligent or wasteful use of water, as determined by the District. 5.12.040.1(C) Where a customer receives electric and/or water service at more than one location and the bill or charges for service at any one location is not paid prior to delinquency, electric and/or water service at all locations may be disconnected. 5.12.040.1(D) Failure to provide documents or payment as requested by a Notice to Comply. Requested items may include, but are not limited to, service applications, lease agreements, home ownership documents, signed payment agreement and payment by cash or money order for a check returned unpaid by the bank. 5.12.040.1(E) Inactive and foreclosed accounts — So long as all three of the conditions stated in 5.12.040.1(E)(1) through 5.12.040.1(E)(3) exist for a customer account, service may be disconnected and all future billings, including water, may discontinue. It is the customer's responsibility to notify the District and provide sufficient evidence of those three conditions. Bills will not be adjusted retroactively and no refunds will be issued. A reconnect fee equivalent to time and materials may be charged at the time of reconnection. 5.12.040.1(E)(1) The customer's service location is in the process of foreclosure, as evidenced b county ounty records of a notice of default, foreclosure judgment, or bank ownership. 5.12.040.1(E)(2) The service location is vacant and unoccupied. 5.12.040.1(E)(3) No electric and water use was recorded during the most recent billing period. Resolution No. 2011 - XX ADOPTING AMENDMENTS TO THE DISTRICT CODE TITLE 5, SECTIONS 5.08.10.9 and 5.12.040.1 REGARDING THE BILLING OF FORECLOSED CUSTOMER ACCOUNTS WHEREAS, the Board of Directors of the Truckee Donner Public Utility District wishes to amend the District Code Title 5, Customer Relations, Sections 5.08.10.9 and 5.12.040.1; and WHEREAS, the District Code provides rules and regulations intended to convey a comprehensive description of the manner in which the District operates; and WHEREAS, periodically, the District Code should be reviewed and updated to conform to District Board directives, new applicable laws and regulations and improvements; and WHEREAS, the revised version of Title 5, Sections 5.08.10.9 and 5.12.040.1 will address the collection challenge of foreclosed properties and bring the chapter up-to-date and will replace all preceding ordinances, resolutions, minute orders and Board directives in Title 5 Sections 5.08.010.9 and 5.12.040.1; and NOW, THEREFORE, IT IS HEREBY RESOLVED, that the Board of Directors does hereby adopt the amended District Code, Title 5, Sections 5.08.010.9 and 5.12.040.1, Exhibit " A". PASSED AND ADOPTED by the Board of Directors of the Truckee Donner Public Utility District in a meeting duly called and held within said District on the 3rd day of August, 2011 by the following roll call vote: AYES: NOES: ABSTAIN: ABSENT: TRUCKEE DONNER PUBLIC UTILITY DISTRICT Jeff Bender, President ATTEST: Michael D. Holley, P.E. Clerk of the Board EXHIBIT A 5.08.010 Billing Procedure 5.08.010.9 Monthly water billings for any existing water service, once activated, are to continue in an owner's name or a qualified renter or tenant's name. Except for a disconnect qualifying under Section 5.12.040.1(E), billing will not be discontinued for a customer requested disconnection, disconnections for non-payment or for repair of customer lines. 5.080.010.9(A) Monthly water billings for homes in foreclosure shall remain in the name of the owner of record based on county records until such time as a bank, mortgage company or new owner files a change in title or the customer provides evidence that they are no longer the legal owner of the property. Once new ownership of the property is established, the water account will be transferred into the name listed on the county record as of the property sale or transfer date. 5.12.040 Disconnection of Electric or Water Service by the District 5.12.040.1 With Notice The District may disconnect electric or water service for any one or more of the reasons contained in this rule. Except as otherwise specifically provided here, Public Utilities Code Sections 16481, 16482 and 16483 and any subsequent amendments, shall apply regarding any disconnect of service. Except for a disconnect qualifying under Section 5.12.040.1(E), water billings will continue. 5.12.040.1(E) Inactive and foreclosed accounts — So long as all three of the conditions stated in 5.12.040.1(E)(1) through 5.12.040.1(E)(3) exist for a customer account, service may be disconnected and all future billings, including water, may discontinue. It is the customer's responsibility to notify the District and provide sufficient evidence of those three conditions. Bills will not be adjusted retroactively and no refunds will be issued. A reconnect fee equivalent to time and materials may be charged at the time of reconnection. 5.12.040.1(E)(1) The customer's service location is in the process of foreclosure, as evidenced by county records of a notice of default, foreclosure judgment, or bank ownership. 5.12.040.1(E)(2) The service location is vacant and unoccupied. 5.12.040.1(E)(3) No electric and water use was recorded during the most recent billing period.