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43 <br />Em <br />To: Mark Casey, City Manager <br />From: Shelly Rueckert, Finance Director <br />Date: 10/17/2012 <br />Re: Late Payment Fees/Certification of Delinquent Accounts <br />The current process for charging penalties on utility bills is $2.00 for the first <br />occurrence on consecutive quarters and 10% of cumulative balance thereafter. <br />Staff is recommending that the City amend ordinances to a 5% cumulating penalty <br />per occurrence. <br />• 10% fee is a burden on large families (bills) that are having temporary cash <br />flow issues. Also, 10% fee is significantly higher than current carry cost <br />(market interest rates). <br />• Replacing the $2/10% late fee with 5% smooth's out the penalty and <br />encourages people not to be late more than once. <br />• $2 is a very low return on cost to process. <br />In addition, staff recommends certification of delinquent accounts for account <br />balances greater than $50.00 and at least two quarters past due. <br />Summary: <br />Staff recommends amending Ordinance 33.043 to reflect a 5 % cumulative late fee. The <br />City would use the certification to taxes as its main tool to collect past due balances. <br />This along with the revised late fee charges is expected to reduce the delinquency rate <br />in the long term and result in lower internal costs. The policy for delinquent bills will <br />be revised accordingly. See attached. <br />3301 Silver lake Rwd * St. Andiony, MN 55418 * 612.7823301 * 6127823302 (fax) <br />