Michael Bobbitt: Notes From The Peanut Gallery (City Council 2/25/2013)

Proposed Increase in Utility Deposit

The basics first then an observation. 

Ray Griffin presented a proposal to double the utility (water and sewer) deposit as a means of mitigating the loss of revenue when a customer fails to pay their water and sewer bill.  Mr. Griffin started his presentation recalling that in November 2011, the two changes to the ordinance governing water and sewer bills.  The first of the two changes was effective in November 2011 and “… established a policy providing for customers to have to keep accounts current rather than paying one bill and leaving one bill in arrears….”  The second change became effective in February 2012, and “… [re-established] security deposits for existing utility customers whose accounts had been terminated for non-payment and new customers who cannot provide a satisfactory letter of credit from their most recent water and sewer utility provider.”  According to Mr. Griffin the objective of these two ordinances is to reduce the “…City’s exposure to loss [caused by non-payment of utility bills] …”  Mr. Griffin stated the issue last February “… was a glitch in planning for the cut-off for the [February 10th] billing cycle.  The ‘glitch’ was the enforcement of cut-offs “… immediately following the past-due date.”  It was last year’s ‘glitch’ that caused the public up roar over the “… re-establishment of security deposits for existing utility customers whose accounts had been terminated for non-payment …” 

Like an unwelcome relative Mr. Griffin has brought back last year’s approved then revised security deposit and grace period proposal.  According to Mr. Griffin last year’s approved policies “… are having a positive impact on the bottom line. The City’s exposure to loss has been significantly reduced since implementation of the security deposit requirements and the requirement that bills be paid on-time …”  Mr. Griffin presented a comparison of 4th quarter 2011 to 2012 showing that “… arrears [have] reduced from 18% of billed to about 10% of billed.”  (Note, actual dollar amounts were not provided.  Another glitch?)  Mr. Griffin added that about 5.5% “… of the City’s utility customers … appears to be [consistently in arrears] … [In the ] 4th Quarter 2011, 4.25% of the customer base was responsible for 18% of arrears [and in] the 4th Quarter 2012, 6% of the customer base was responsible for 10% of arrears.”  Additionally, “[the] current 10 Business Day Grace Period has resulted in a real-time grace period of not less than 12 calendar days and up to a maximum of 20 calendar days, depending on when the holidays fall vis-à-vis weekends and billing cycles. …”  Mr. Griffin’s presentation of the current issues concluded with the following.  “Exposure to Loss has been examined by taking real accounts and projecting the potential loss to the City due to the time lags as noted in the following Table. Seven (7) residential and commercial accounts reveal the City’s current security deposit system is not adequate to cover losses should the customer ‘skip out’ and/or close his business due to bankruptcy, etc. …” 

The Observation

Mr. Griffin has returned with last year’s $150 ($200 if outside the city) security deposit and five day grace period.  The same plan the Council blindly approved before being confronted by a house full of angry residence accustomed to a lassie fair policy regarding payment of utility bills.  To placated the residence the Council voted to “… reduced the security deposits by half for residential customers … ” along with a reduction of the late service fee.  The City Manager agreed to avoid another ‘glitch’ when enforcing cut-offs.  Give Mr. Griffin credit for trying to manage the City’s finances as a compassionless bank.  Give the Council credit for hesitating on accepting the return to a failed approach and postponing any decision for at least a month.  In the next month the Council can ask for the dollar amounts used to calculate the percentages.  Or to ask how many dollars less in arrears was 2012 compared to 2011 when the number of arrears in 2012 is greater than 2011.  Or to ask for a comparison of 2011 – 2012 ‘skip outs’ and the actual dollars lost.  Or to ask why is it necessary to penalize the new customers for the failure of the 5.5% of current customers? 

Public Comments Non-Agenda Items

The best part of the public meetings is the public comment period, especially the public comment period on non-agenda items.  Until the speaker has started talking their topic is unknown and sometimes we have spoken more from ignorance than fact.  Monday night’s meeting was complete with two presenters.  First a lady was complaining about the debris left in her yard when fire fighters extinguished a fire at a house next to her home.  She is expecting ‘the city’ to clean up the mess.  The Mayor instructed the City Manager to check on this issue for the city.  The second lady’s presentation focused on this week’s hot topic crime and what can be done about it.  The speaker made an impassioned plea for someone to seek out grants that would help focus resources on the issue.  My hearing and attention failed when she said “I don’t want to be responsible for …”. 

Consent Agenda

During the discussion on approving resolution 13-21, Councilman Inscoe stated he wants a balanced budget without using any other funds.  Does having a balanced budget mean no additions to the police force, fire fighters, and EMTs, just to name a few?  Local government must work with a balanced budget but not to the detriment of the public’s safety.