Summary
To: Town Commission
From: Stefan Massol, Director of Support Services
Date: 2/5/2019
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Subject:
Title
Review of Delinquency Charges for Utility Accounts
Summary:
The Town of Belleair currently does not have a ceiling for monthly late charges billed for past-due utility accounts, unlike neighboring jurisdictions. Staff would like to hear thoughts of the Town Commission on adding a maximum monthly late fee charge.
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Body
Background/Problem Discussion: For many years the Town charged a late fee equal to 3% of the past-due balance each month. Beginning in 2017, the Town raised the late fee rate from 3% to 8% monthly when the water utility rates were last updated. Since that time, there was a rare, but notable, instance where a vacant property that had no consumption incurred significant late fee charges which were ultimately impossible to collect through the foreclosure process.
The City of Clearwater has a monthly late charge of 3%, not to exceed $250 and Pinellas County has a bimonthly late charge of 10% not to exceed $500. In the interest of not overstating revenues beyond what is reasonably collectible, staff would like the Town Commission to consider establishing a ceiling for monthly late fees. The Finance Board recommended ceiling of $300 per month and that the ceiling be only for Single Family Residential customers.
Financial Implications: If the town were to implement the ceiling recommended by Finance Board and staff it is not expected to have any financial impact, except that there will be a more accurate reporting of accounts receivable for town utilities.
Below is a table showing some basic statistics on late fees for calendar year 2018:
Proposed Motion: N/A. Should the Town Commission agree to the ceiling there would be an ordinance change included in the next update of fees for the town.