Staff recommends approval of the Identity Theft Prevention Policy, changes to deposits, fees, and customer billing timelines.
FACTA: The Fair and Accurate Credit Transaction Act (FACT Act) 2003– has mandated utilities service providers to develop and implement an Identity Theft Program to identify, mitigate, and prevent identify theft effective November 1, 2008.
The program will identify “RED flags” which include pattern, practice, or specific activity that indicates possible existence of identity theft. This will protect our citizens’ information along with protecting the City of Leesburg.
We currently use Online Utility Exchange to generate our credit checks. Customers agree to a personal credit check at the applicant's expense of $5.00. If the personal credit check demonstrates a credit record satisfactory to the city, the initial deposit may be waived. However, with the new FACTA regulation, we are required to implement an identity check on new accounts as well as existing accounts. The cost of the identity check through Online Utility Exchange is $5.00 which will be passed on to the applicant for new and transfer accounts only.
Implementation of FACTA should reduce collections and write-offs as verification of identity will enable the City to obtain better information to pursue collections.
Collection Report and Write-Off Recommendations
The proposal to eliminate reminder notices will save approximately $30,000 and reduce the collections timeline by approximately 15 days. Customers will be sent a final notice in lieu of the reminder notice. Ten percent of the customers receiving reminder notices are actually disconnected for non-pay and are more often than not repeat offenders. Changing our collections timeline from 45 days to 30 days will allow for more timely collections, decrease receivables and associated bad debt, and reduce the time it takes to turn off an account for non-pay.
Customers will be eligible to receive an extension if the account is active for six months with good payment history. Thereafter, the account will qualify for an extension no more than two times per year with good payment history. In addition, a supervisor may grant one additional extension.
Ordinance Changes for Deposits
Deposits for residential customers -– Residential customers will be charged 2 x average monthly bill or minimum for all services. For deposits greater than $500.00, the customer may split the remainder of the deposit into two equal installments.
Change the process for rental customers - Approximately 60% of our collections are due to accounts terminating less than a year with 30% of these accounts being less than six months with the City. By the time we mail out the final notification, many of our transient customers have already vacated their homes and leave the City with a balance due. Rental customers will be charged 2.5 x average monthly bill or minimum for all services. Rental customers will be provided the option of paying their deposit all at once or in monthly installments of $25.00 for the amount of deposit that exceeds 2 x the average monthly bill. In addition, rental customers will be requested to provide the names of all adults living at the premises when applying for utility services.
Commercial Accounts will be re-evaluated per current Ordinance 22-181(c) as a standard business practice.
Criteria for Refund of Deposits
The good credit refund of deposits will be eliminated. Deposits will be applied to the final bill upon termination. If the application of deposit results in a credit status, the customer will be refunded.
Fee Schedule for Meter Tampering, Meter Testing, and Re-Read Fees
Meter tampering – Propose increase for each tamper from $100.00 to $275.00. It is more advantageous for the customer to pay the current tamper fee of $100.00 than for the actual consumption. By increasing the fee the loss to the City could be mitigated.
Meter testing – The City will test electric meters at the customer’s request under the following conditions: If Leesburg Electric staff determine a significant anomaly is present in the customer’s consumption records, the City will conduct the test free of charge. If the test confirms the meter is inaccurate by more than 2%, the customer’s account will be adjusted accordingly. If the test shows the meter to be within 2% accuracy, any future requests to test the meter will require a deposit of $100.00.
If Leesburg Electric staff does not find a significant anomaly in the customer’s consumption records, and the customer would still like for their meter to be tested, a deposit of $100.00 will be required. The deposit will be forfeited if the test confirms the meter’s accuracy within 2%, and it will be returned to the customer if the meter is found to be inaccurate by more than 2%.
Re-reads – Customers currently request re-reads to be done anytime they feel the initial read is inaccurate. However, this has caused an undue hardship to the metering department in addition to added expense for gas, vehicle wear and maintenance, extended time of staff, and overtime to meet each customer’s needs. Staff recommends allowing one re-read at no charge and charging a fee of $50.00 for any additional requests. If the re-read shows the initial read to be in error, the $50.00 fee will be waived. In addition, customer billing generates an exception report showing any major differences in consumption. Staff will generate work orders for any significant variances that could indicate a problem.
1. Approve the Identity Theft Prevention Policy effective May 1, 2009; Approve proposed changes relating to deposits, fees, customer billing timelines and reminder notices or;
2. Such alternative action as the Commission may deem appropriate
Implementation of these changes should result in an increase in cash and a corresponding reduction of receivables and bad debt. Verification of identity and the receipt and retention of social security and drivers license information will provide our collections partner better resources to find customers that leave the City with a balance due.
Prepared by: Lori Beach/Jerry Boop___
Attachments: Yes_X__ No ______
Advertised: ____Not Required ______
Attorney Review : Yes___ No ____
Reviewed by: Dept. Head __JB____
Finance Dept. __________JB______
Deputy C.M. ___________________
City Manager ___________________
Account No. _________________
Project No. ___________________
WF No. ______________________