HomeMy WebLinkAbout15 Collection and write off status Agenda Item # 15
P Liblic Utility District
WORKSHOP
To: Board of Directors
From: Mary Chapman
Date: August 06, 2008
Subject: Review of Billing Collection and Write-Off Status
1. WHY THIS MATTER IS BEFORE THE BOARD
This workshop is intended to bring to the Board's attention the current trend in
customer billing accounts receivable balances and the status of the uncollectible
accounts to be written off.
2. HISTORY
Historically, the District's write off of uncollectible account balances has been very low.
This is due to the Board's credit and collection policies and the efforts of staff to follow
those policies.
3. NEW INFORMATION
Staff has just completed the semi-annual write off list which totals $17,767 (unpaid
accounts that closed between July 1, 2007 and December 31, 2007 and are now six
months old). This is a significant increase over prior years since it only represents six
months of the year. We are expecting the next list (unpaid accounts that closed
between January 1, 2008 and June 30, 2008) to be at least as high as the current
amount of write offs. We are looking to the Board for additional direction to tighten up
on our credit and collection policies that are included in Title 5 Customer Relations.
Attached are some charts to help the Board understand the trends. We will review
them at the meeting.
1) Balance of Past Due Accounts Receivable — shows the monthly changes in the
amounts owing at the end of each month in the 30-60-90 day categories.
2) Chart showing the number of 48 hour notices delivered and the number of
disconnects for non-payment made for the last eight and a half years.
3) Comparison of total write offs in dollars for the last ten years.
4) Comparison of total write offs as a percent of amounts billed for the last ten
years.
5) "Write Off Summary" showing accounts being written off broken out into
different categories for the last three years.
In Title 5 we did make some modifications to the deposit policy to help decrease our
write offs. However, there are two additional changes we would like to propose:
1) Treat all homeowners like renters requiring that they provide us with a
satisfactory letter of payment history from their previous utility or that they dhave
an Equifax credit score of 700 or higher in order to have their deposit waived.
2) Change the look back period from 12 months to 24 months when evaluating a
customer's credit risk and whether to refund a customers deposit. Customers
would receive their deposit after a 24 month period of no more than 2 late
notices, no returned checks, no 48 hour notices and no disconnects for non-
payment or non-compliance.
4. FISCAL IMPACT
Tightening credit and collection policies will help reduce the account balances that the
District writes off.
5. RECOMMENDATION
Review this report and provide staff with comments.
Ma Ch man Michael D. Holley
ry
Administrative Services Manager General Manager
Public Utility District
Truckee Donner Pu ty
Balance of Past Due Accounts Receivable
Y
$180,000 ?
$160,000 ► ` \
$140,000 / ►
$120,000 / \ \ ` ►
$100,000 AL
\ \
$80,000
i
$60,000
$40,000
$20,000 "`1 0 /
WOO
(0 (0 (0 Cfl C4 Cfl CO CO ti ti ti ti ti ti ti ti ti ti ti ti CO 00 w 00 00 00
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
i I +� > U C S] L L �+ 0= Q V > U C C Q CU
A C
(U : : CD � LL Q Q U) Z 0 '� LL Q
-� Q U) Z
m m
F30 Days -� -60 Days 90 Days
Truckee Donner Public Utility District
Number of 48 Hour Notices and Disconnects for Non-Payment
4,000
3,500
3,000
N 2,500
m
0
z
0 2,000
d
E
z 1,500
1,000
500
0
2000 2001 2002 2003 2004 2005 2006 2007 2008
r_�M48 Hour Notices -�Disconnects Non-Payment
Truckee Donner Public Utility District
Write Off Analysis 1999 to 2008
$30,000
$23' 3
3
9)7
3
1
$25,000
$220716 6 Months
Only
$20,000 $18,028 $170767
O
$150865 $14,786
$150000
L
o $109399
0
$10,000
$7,976 $7,303
$5,000
$0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Year of Write off
Truckee Donner Public Utility District
Write Off Analysis 1999 to 2008
0.14% 0.13%
0.12%
0.10%
0.09%
_d 0.08% 0.08%
— 0.08%
m 0.07% 0.07%
ea
p 0.06% 0.06%
0 0.06% - 0.05%
0
0.04%
0.04%
0.02%
0.00%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Year of Write Offs
i
6 Months 2007 2008 2006
WRITE OFF SUMMARY COMPARISON 2006 -2008 i
ma b Years of Service:
Summary y 3
Less than I year of service
$3 087 17% $6,146 39% $8,935 35%
o
33% �
5,387 30% 5,153 6,201
1 to 2 ears of service 24/°
y 1,374 8% 2,183 14% 4,111 16%
2 to 3 years of service
3 or more years of service 7,919 45% 5, 100% 5$25,8 2 100%
$17,767 100% $15,718 718
Owner/Renter Ratio: $4 923 28% $2 626 17% $3,609 14%
Owners °
Renters 12,844 720% 13,092 83% 22,203 86/°
$17,767 100% $15.718 100% $25,812 100%
Commercial/Residential Ratio: $5,247 30% 0/o
$0 ° $4,541 6%
Commercial
Residential 12,520 70% 15,718 100% 21,271 94 °
$17,767 100% $15,718 100% $25,812 100%
Other Percentages: $1,300 7% $0 0% $3,045 12%
Bankruptcies
Foreclosures
$2,272 13% $3,848 24% $0 0%
$8,906 50% $5,066 32% $4,519 18%
1013 Disconnects
Deceased
$77 0% $235 1% $1,398 5%
Equifax check-waived deposit
$145 1% $p 0% $788 3%
Number of accounts to be written off
62 85 96
Average Write-Offs: Residential Accounts
$227.64 $184.92 $244.49