An audit presented at the March 3 Lompoc City Council meeting showed that the city has written off nearly $2 million in delinquent utility fees going back more than seven years.
Even though the lost revenue is a drop in the bucket compared to what the city makes in revenue every year—more than $100 million, according to estimates by City Administrator Patrick Weimiller—it had council members shaking their heads in disappointment and trying to figure out a way to make delinquent accounts more collectable.
It turns out that there could be a better way for the city to collect past-due accounts. The city website recently added an online payment feature for utility bills. John Linn, the former-mayor-turned-utility-commissioner, told the Sun that the feature was added about two weeks ago. It was something Linn said he began campaigning for in 2008, but it never happened.
Linn added that paying utility bills online saves money for both the city and residents. Every time a bill is sent to a customer and mailed back, postage and paper is included in the cost. Linn said it’s a very costly process—in terms of both time and money—to mail bills back and forth. The online feature, located directly on the front of Lompoc’s official website, could help the city recover some of its lost money, he said.
“We have a high volume of people coming to city hall to pay,” Linn said, adding that online payments should be more convenient. “Do a little magic, and it’s paid. People tend to pay a little earlier, and it’s easier, and they can set it up so it’s automatic.”
In 2013, 998 accounts owed a total of $156,517.94, according to the audit presented at the March 3 meeting by Poornima Wagh of Veritas Government Financial. The city has to spend $3.50 for each delinquent account that gets sent to the collections agency. That total was $3,493 in 2013.
The audit also includes statistics that show the rate at which the city is able to recover delinquent accounts has been steadily decreasing since 2008. The lowest point was in 2014, when only 18.66 percent of delinquent accounts were paid.
Linn said that some of the reasons accounts go delinquent could be related to the inconvenience of mailing payments and how high the cost of utility deposits are for low-income housing residents. The utilities department is doing a review of the deposit process.
City Administrator Weimiller said the city works with residents to get their bills paid by offering payment plans so they don’t lose their service. The delinquent accounts write-off is part of an on-going audit Weimiller began in 2014 when he assumed the city administrator position. He said that $2 million is nothing for the city to worry about.
“In the bigger scheme of things, it’s not an amount that warrants panic or anything,” Weimiller explained.
This article appears in Mar 12-19, 2015.