With a vigorous collection effort the city's Water and Sewer Department has collected a quarter of the $1 million dollars in delinquent fees.
"It's the low-hanging fruit," Commissioner Guy Russo said. "But its since dried up."
The department collected between $250,000 and $260,000 in its efforts to chase down delinquents, but it's not nearly enough to keep the department solvent. November billings have just been mailed.
"If we repeat for the November billings the pattern we've seen earlier, there's a chance we'll face another deficit," Russo said.
Russo said that the department is taking two action steps to collect on the overdue bills. Currently, ten accounts which have been delinquent since before 2005, are in foreclosure, meaning that the city will take legal steps to foreclose on the property of those who haven't paid.
"We have about 30 more accounts like that," Russo said. "An we can probably handle ten a month."
The department will need to ask the Common Council for funds of $36,000 to pursue foreclosure. These funds will cover legal fees, filings and affadavits.
As another step, the Water and Sewer Department will pursue shut off of services for those clients in delinquency after 2005. The Department will also pursue permission for this step from the Common Council. Steps for shut off are proscribed by the DPUC. About 90 accounts are being considered for shutoff. Allowances are made for medical conditions, but certification by a doctor is required to receive a medical exception.
"Sometimes just the threat of shutoff is enough to get a delinquent account to pay," Russo said.
The city has been reluctant to pursue these draconian measures to collect past due bills, but Russo indicated that the options are limited, and the department, and the city, are in a bind.
All of these matters will be discussed at a special meeting of the Water and Sewer Department to be held on November 19th, at 5:30 PM at the Water and Sewer Department.
I think the foreclosure idea is really bad. Especially if it will cost the taxpayer an additional $36,000 in funds to file papers! Cut off the water/sewer to those properties. Something that obviously should have been done years ago. Also, it might be a good idea for the water department to get their billing procedures right. Last year they sent me a bill that in no way corresponded with what they said was the formula for charging for the water. Their excuse? The printer made a typo and the bills went out that way. Seriously. Perhaps their first step in fixing their accounting problems would be to hire a proof reader. Clearly, if they don't even know how much to charge, how can they in good faith expect to collect?
ReplyDeleteI would assume that the $36K is for a cash flow problem. The filing fees will be added to the liens or other collection/foreclosure amounts on the affected properties.
ReplyDeleteThanks for the update Middletown Eye - I'm on the WPCA and I didn't know this.
Actually WD, this is setting up a revolving fund. As David mentioned, under most circumstances, filing fees, attorneys' fees, service of process, and other costs of collection are added to the city's judgment in a foreclosure, and will be paid out of the proceeds of any foreclosure. We don't normally lose any money on foreclosures--except when the property is completely worthless, and that seems unlikely in a case in which the property is receiving water and sewer service.
ReplyDeleteCutting off service is certainly an option we need to exercise, but keep in mind our primary goal is collecting the back debt at this point. Cutting off service does nothing for that.
I discussed this with one of the financial people at Water and Sewer--he indicated that these actions will be coordinated with the foreclosures for back taxes and other city debt. This IS critical, imho--I doubt that a judge would allow us to recover 3 separate filing fees for 3 separate actions. And consolidating them is more efficient.