Agenda Information Sheet
DEPARTMENT: Finance
DCM: Bryan Langley
Date: October 9, 2017
SUBJECT
Title
Receive a report, hold a discussion, and give staff direction regarding the Credit and Collection Policy of the City Utility System.
Body
BACKGROUND
On November 16, 2010, the City Council unanimously approved the implementation of Ordinance 2010-292, which details the credit and collection practices utilized by Denton Municipal Utilities. The changes undertaken were in response to recommendations made in a 2008 management review conducted by Navigant Consulting as well as evidence that the City's uncollectible debt was increasing in amount and in proportion to total accounts receivables. The purpose of the ordinance revision was to reduce the amount of uncollectible utility debts through credit screening, deposit assessment, and collection procedures that encourage on time payment. Additionally, the new processes were designed to ensure the fair collection treatment of the City's utility customers by basing decisions on credit history, payment behavior, and utility usage. The aforementioned processes were implemented on January 1, 2011. In addition, the City Council approved a new agreement between the City of Denton and Interfaith Ministries on March 1, 2011 to increase funding provided by the City to the Prevent Loss of Utility Service (P.L.U.S. One) program. On October 2, 2012, the City Council approved Ordinance 2012-258 to allow the imposition of liens on real property for non-residential utility debts exceeding $1,000.
Staff has closely monitored the impact of each of these changes over the last several years, and the results indicate that the primary objectives of these initiatives are being met. The number of delinquent accounts continues to decrease, credit screenings are ensuring that customers receive fair collection treatment, and uncollectible debts have been reduced. In addition, the P.L.U.S. One program is successfully providing as...
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