Another round of charge-offs for WM Utilities

City dismisses massive number of delinquent accounts as officials seek better ways to collect

By John Rech

The West Memphis Utility Commission first meeting of the year had one action item first and foremost. In a regular book keeping maneuver commissioners charged off one third of a million dollars in uncollected past due closed accounts. Discussions before the write-off took place included a review of policies and procedures for deposits, shutoffs, collections and plans to reduce making another mountain of uncollected money. The commission ultimately waived good-bye $366,450 outstanding from the period of July through December 2013. Commissioner Susan Marshal wanted assurances that continued efforts to collect on the closed accounts would continue. “Have these been to collection?” asked Marshal. “Will we continue to collect on these?” “Yes, we’ve had some good results with collections,” said Utilities Manager John Rimmer. “We continue to work with some success with a collection agency on closed accounts.” Most of the collection challenges arise from those new to the area according to Assistant Utilities Manager Todd Pedersen. In contrast, established households with just a few years on account, whether rented or buying, represented a strong payment experience for the city utilities. But new renters as a category showed the biggest propensity to skip and leave their deposit and an even bigger bill behind. Currently start up deposits generally don’t cover the overdue bills. Newer accounts represented the lion’s share of the bad debt that set the stage for this six digit write-off. “It’s people that have been here less than two to three years,” said Pedersen. “It is not our long time residents. The only way I know to get some of these dollars is to have some of that money up front.” Pedersen indicated changes are coming to combat charge-offs from mounting in the first place. The 2016 budget authorizes an Automated Metering Infrastructure (AMI) feasibility study. AMI could help the utility with automated turn on and shut off capabilities. Offering pre-pay service is a possibility with AMI capabilities. Pre-payment for services prevents overdue bills from piling up in the first place. Pedersen said the utility would commission that study this year and expressed that any new policy around deposits or pre-paid accounts would meet fairness standards. “What about pre-paid metering?” asked Commissioner Dana Parker. “We are hiring consultants to do AMI,” replied Pedersen. “That is the key to soften the blow on deposit levels. We can say if you can’t pay this deposit we can put in a prepaid meter for you. It means you just pay for what you use ahead of time.” I’ll be coming back with other measures to reduce this in the future,” said Pedersen. “But, I can tell you this, there will still be an impact from the 2014, and 2015 writes offs. 2014 is going to be ugly also. One of the writes offs (later) this year will be the hospital, that equates to $150,000. We did not get that out of the bankruptcy.” Looking at revising the deposit requirements fairly was on the mind of both the City Attorney David Peeples and Pedersen. “Some apartment bills are $55 a month; some houses are $500 per month,” said Pedersen. “We’ve got to find a way to address that. David and I have talked about this.” “I am going to be working with Todd for solutions,” said Peeples. Another factor to consider is the weather. “This time of year we may not shut off due to the a streak of cold weather temperatures,” said Pedersen. As the charge off moved to voice vote approval Commissioner Dana Parker said, “What a way to start the year off.”

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