Utility Accounts: Billing, Collection and Lien Mechanics April 13, - - PowerPoint PPT Presentation

▶
utility accounts billing collection and lien mechanics
SMART_READER_LITE
LIVE PREVIEW

Utility Accounts: Billing, Collection and Lien Mechanics April 13, - - PowerPoint PPT Presentation

Oct 21, 2023 326 likes •729 views

Utility Accounts: Billing, Collection and Lien Mechanics April 13, 2017 Lee Marchisio Brad Nelson, Finance Manager 206.447.6264 | lee.marchisio@foster.com 425.337.3647 | bnelson@slwsd.com Overview Billing and Collection Basics Lien

slide-1
SLIDE 1

Lee Marchisio 206.447.6264 | lee.marchisio@foster.com Brad Nelson, Finance Manager 425.337.3647 | bnelson@slwsd.com

Utility Accounts: Billing, Collection and Lien Mechanics

April 13, 2017

slide-2
SLIDE 2

Overview

  • Billing and Collection Basics
  • Lien Mechanics
  • Special Issues Managing Utility Accounts
  • Visit Municipal Research and Services Center for additional materials, some of

which are incorporated into this presentation. http://mrsc.org/Home.aspx.

2

slide-3
SLIDE 3

Billing Basics: Accounts

  • Type: residential, commercial, mixed, multi-family
  • Disclose policies/procedures for billing, collection, etc.
  • Combined utility accounts
  • Application of payments
  • Penalties … irrigation … stormwater … garbage … sewer

… water

  • Budget billing or equal payment plan. RCW 35.21.300(4).
  • Low income senior and disabled relief. RCW 74.38.070;

RCW 36.94.140(4); RCW 35.92.020(5), 35.92.380.

3

slide-4
SLIDE 4

Billing Basics: Deposits

  • May require deposit to guarantee payments.
  • Cities and Towns. RCW 35.21.217(1).
  • Water-Sewer Districts. RCW 57.08.081(2).
  • Counties. RCW 36.94.020, .130 (general authority).
  • How much?
  • How long held?
  • Re-imposition?
  • Unclaimed deposits. Chapter 63.29 RCW (Uniform

Unclaimed Property Act)

4

slide-5
SLIDE 5

Billing Basics: Underpayments

  • Delinquencies
  • Billing Errors
  • Unlawful/unauthorized connections
  • Cities and Towns. E.g., RCW 35.67.350 (sewer).
  • Water-Sewer Districts. RCW 57.08.180.

5

slide-6
SLIDE 6

Billing Basics: Underpayments (cont.)

  • Duty to Collect: pursue them
  • Rate discrimination. Housing Authority v. Northeast

Lake Washington Sewer and Water District, 56 Wn.

  • App. 589 (1990) (failure to collect constitutes an

impermissible rate preference).

  • Gift of public funds. Wash. Const. art. VIII, §7.
  • Otherwise, protect agency from audit exception by

prompt write-off of delinquencies.

6

slide-7
SLIDE 7

Billing Basics: Underpayments (cont.)

  • Statute of Limitations
  • If treated as accounts receivable: 6 years. RCW 4.16.040(2).
  • If not accounts receivable: 3 years. RCW 4.16.080(3); see City
  • f Snohomish v. Seattle-Snohomish Mill Co., Inc., 118 Wn. App.

1032 (2003) (unpublished) (3-years).

  • Discovery rule: when agency knew or should have known. See

City of Snohomish v. Seattle-Snohomish Mill Co., Inc.

  • Written utility services agreement: 6 years. RCW 4.16.040(2).
  • Good housekeeping by regular administration of collections.

7

slide-8
SLIDE 8

Billing Basics: Overpayments

  • Refund plus interest
  • Statute of limitations
  • 6 years if written agreement. RCW 4.16.040(1).
  • 3 years from discovery. RCW 4.16.080(3), (4).
  • Scope of refund: entire overcharge. Western

Lumber v. Aberdeen, 10 Wn. App. 325 (1973) (false representation of water consumed due to faulty meter).

8

slide-9
SLIDE 9

Collection Basics: Penalties and Interest

  • Interest
  • Cities and Towns. Chapter 35.92 RCW.
  • Water-Sewer Districts. RCW 57.08.081.
  • County. RCW 36.94.150.
  • Rate of interest? Check applicable statute.
  • Late charge or penalty. Specify in policy:
  • Fixed rate or flat amount.
  • Its application to the delinquent utility bill.
  • May be cumulative.
  • Shutoff, reconnection and other fees must relate to costs.

9

slide-10
SLIDE 10

Collection Basics: Shutoffs

  • Combined Accounts
  • Most current water bill as last priority.
  • Ordinance/resolution establishes order of application of

payments.

  • E.g., first $ to storm; second $ to sanitary sewer, then last $ to

water.

  • Easies/most effective to shut off water.
  • Policy considerations. Effective, but …
  • Agency perception.
  • Public health: sewer, garbage …

10

slide-11
SLIDE 11

Collection Basics: Shutoffs (cont.)

  • Proper notice.
  • Consistency of notice process (alternative langue?).
  • Letter
  • Door hanger
  • Call
  • Second door hanger (?)
  • Shutoff
  • Opportunity and procedures to protest (due process).
  • Agency contact information.
  • Duration of notice prior to shutoff?
  • Timing: certain limitations.
  • Cities and Towns: 4 months’ delinquent charges. RCW 35.21.290, 300.
  • Water-Sewer Districts: 30 days before shutoff. RCW 57.08.081(5).

11

slide-12
SLIDE 12

Lien Mechanics: Attachment

  • To the premises (not owner or tenant).
  • Counties. RCW 36.94.150.
  • Cities. RCW 35.21.290; 35.67.200.
  • Water-Sewer Districts. RCW 57.08.081(4).
  • Filing: the utility department must periodically

certify delinquencies to the county to pursue lien enforcement.

12

slide-13
SLIDE 13

Lien Mechanics: Foreclosure

  • Water:
  • Cities and Towns: NO. Shutoff only. RCW 35.21.300(1).
  • Counties: YES. RCW 36.94.150(4).
  • Water-Sewer Districts: YES. RCW 57.08.081(4).
  • Sewer.
  • Cities and Towns: YES. RCW 35.67.220.
  • Counties: YES. RCW 36.94.150(4).
  • Water-Sewer Districts: YES. RCW 57.08.081(4).
  • Electric:
  • Cities and Towns: NO. Shutoff only. RCW 35.21.300(1).

13

slide-14
SLIDE 14

Lien Mechanics: 4-Month Rule

  • Cities and Towns. RCW 35.21.290.
  • “a lien against the premises … for four months

charges therefor due or to become due, but not for any charges more than for months past due.”

  • Absolute 4-month limit?
  • Balance accrues beginning 4 months prior to shutoff

to present?

  • Check with counsel …

14

slide-15
SLIDE 15

15

slide-16
SLIDE 16

16

slide-17
SLIDE 17

17

slide-18
SLIDE 18

Special Issues Managing Utility Accounts: Bankruptcy

  • Automatic stay: date petition filed.
  • Pre-petition charges stayed.
  • Restore service if terminated for pre-petition debt.
  • Create new billing account for post-petition charges.
  • Collecting pre-petition debt:
  • File lien notice.
  • File “secured” claim in bankruptcy court. Attach backup

materials.

  • Notify trustee of intent to foreclose lien.
  • DO NOT contact debtor (contact debtor’s attorney and

bankruptcy trustee).

18

slide-19
SLIDE 19

Special Issues Managing Utility Accounts: Bankruptcy (cont.)

  • Collecting post-petition debt.
  • Close pre-petition utility account.
  • Open a new utility account for post-petition debt.
  • Track developments in the case by using PACER account.
  • Assurance of payment deposit.
  • May not refuse service or otherwise discriminate because debtor filed for bankruptcy
  • r pre-petition charges are still owed. 11 U.S.C. §366(a).
  • May require within 20 days of the stay “adequate assurance of payment.” 11 U.S.C

§366(b).

  • A cash deposit
  • A letter of credit
  • A certificate of deposit
  • A surety bond
  • A pre-payment of utility consumption
  • Another form of security that is mutually agreed on between the utility and debtor or the
  • trustee. 11 U.S.C. §366(c)(1)

19

slide-20
SLIDE 20

Special Issues Managing Utility Accounts: Property Sales

  • Seller Responsibilities. Chapter 60.80 RCW.
  • Satisfy liens for delinquent utility bills.
  • Provide a list of utility providers to the closing agent.
  • Closing agent is to make written request for final utility

billings.

  • Final billing includes all outstanding charges as of the

stated closing date and average daily utility charges.

  • If utility fails to provide final billing info within 7 business

days, then it loses the right to collect the billings from the new property owner (but not from the seller).

20

slide-21
SLIDE 21

Special Issues Managing Utility Accounts: Collection Agencies and Costs

  • May use collection agencies. RCW 19.16.500.
  • To recover delinquent charges.
  • May add reasonable collection agency fees to outstanding

charges, paid by debtor.

  • 30 days’ notice to customer before assignment.
  • Federal Fair Debt Collection Practices Act (15 USC

§1692); State Collection Agency Act (Ch. 19.16 RCW).

  • Contract attorneys are debt collectors
  • Follow statutory requirements

21

slide-22
SLIDE 22

Special Issues Managing Utility Accounts: Landlord/Tenant

  • Name on account? [Utility’s discretion]
  • Owner
  • Tenant with owner’s permission
  • Owner with copy of bill to tenant
  • Transfer to owner upon delinquency
  • Ultimate responsibility: Owner. RCW 35.21.290 (water/electricity);

RCW 35.67.200 (sewer).

  • Notice to owner of tenant delinquency? Optional, but required upon
  • wner request.
  • Cities and Towns. RCW 35.21.217.
  • Water-Sewer Districts. RCW 57.08.081(7).
  • Shutoff may not be used as an eviction tool. RCW 59.18.300.

22

slide-23
SLIDE 23

Special Issues Managing Utility Accounts: Tips from Silver Lake

  • Billing Policy Overview
  • SLWSD bills Property Owners with copies of bills

provided to tenants and/or Property Managers: http://www.slwsd.com/forms/statementcopy.pdf

  • No Inactive Account Status

23

slide-24
SLIDE 24

Special Issues Managing Utility Accounts: Tips from Silver Lake (cont.)

  • Basic Billing & Collection Schedule

24

Date Billing Action Typcial Number 2/28/2017 Regular Billls 9,500 3/15/2017 Due Date 8,000 3/31/2017 Mailed Payment Reminder Notice 1,500 4/14/2017 Mailed Shut-Off Notice 835 4/24/2017 Last Day for Payment or Arrangements N/A 4/24/2017 Customers Making Arrangements 300 4/25/2017 Shut-Off Day 125 5/1/2017 Lock Off Day 10 5/1/2017 Mailed Payment Arrangment Confirmation 25-75 5/5/2017 Last Day for Payment N/A 5/8/2017 Arrangement Shut-Off Day 0-10 Special Arrangements - Medical, Death, Divorce, 0-3 Abuse etal Managed by Outlook Calendar Up to 5/31/2017

slide-25
SLIDE 25

Special Issues Managing Utility Accounts: Tips from Silver Lake (cont.)

  • Account Status Defined and Tracked
  • Turn Offs with Consumption
  • Lock Off
  • Liens Filed
  • Bankrupt
  • Arrangements

25

slide-26
SLIDE 26

Special Issues Managing Utility Accounts: Tips from Silver Lake (cont.)

  • Lien Filing
  • Every 90 Days Accounts are reviewed
  • Mail Merge Process Generates
  • Notice of Intent to File Lien
  • Lien Filing
  • Release of Lien – .pdf of Release of Lien attached to account
  • Cash, Escrow Check, Cashier Check is immediate lien release
  • Personal Check of Credit Card Payment is ten-day hold
  • NOTE – County Tax Lien Sale (Schedule) May Override

Utility Lien

26

slide-27
SLIDE 27

Special Issues Managing Utility Accounts: Tips from Silver Lake (cont.)

  • Bankruptcy
  • Pacer’s Account: https://ecf.wawb.uscourts.gov/cgi-

bin/login.pl

  • Proof of Claim is Filed:

http://www.uscourts.gov/forms/bankruptcy- forms/proof-claim

  • Letter and Proof of Claim Mailed to Attorney for

Debtor, Trustee, and Court Clerk

27

slide-28
SLIDE 28

Special Issues Managing Utility Accounts: Tips from Silver Lake (cont.)

28

slide-29
SLIDE 29

Special Issues Managing Utility Accounts: Tips from Silver Lake (cont.)

29

slide-30
SLIDE 30

Special Issues Managing Utility Accounts: Tips from Silver Lake (cont.)

30

slide-31
SLIDE 31

Special Issues Managing Utility Accounts: Tips from Silver Lake (cont.)

31

slide-32
SLIDE 32

Special Issues Managing Utility Accounts: Tips from Silver Lake (cont.)

32

slide-33
SLIDE 33

Special Issues Managing Utility Accounts: Tips from Silver Lake (cont.)

33

slide-34
SLIDE 34

Special Issues Managing Utility Accounts: Tips from Silver Lake (cont.)

  • Unauthorized Service Reconnections – Special

Situations

34

slide-35
SLIDE 35

Special Issues Managing Utility Accounts: Tips from Silver Lake (cont.)

35

slide-36
SLIDE 36

Special Issues Managing Utility Accounts: Tips from Silver Lake (cont.)

36

slide-37
SLIDE 37

37

slide-38
SLIDE 38

Questions?

38

slide-39
SLIDE 39