HomeMy WebLinkAboutMemo - Mail Packet - 4/6/2021 - Memorandum From Gretchen Stanford And Lance Smith Re: Utility Delinquent Accounts & Financial Assistance Monthly Update
Utilities
electric · stormwater · wastewater · water
222 Laporte Ave.
PO Box 580
Fort Collins, CO 80522-0580
970.212.2900
V/TDD: 711
utilities@fcgov.com
fcgov.com/utilities
M E M O R A N D U M
DATE: April 1, 2021
TO: Mayor Troxell and Councilmembers
FROM: Gretchen Stanford, Interim Customer Connections Deputy Director
Lance Smith, Utilities Strategic Finance Director
THROUGH: Darin Atteberry, City Manager
Kelly DiMartino, Deputy City Manager
Theresa Connor, Interim Utilities Executive Director
RE: Utility Delinquent Accounts & Financial Assistance Monthly Update
Bottom Line: As discussed on March 16 with City Council, Fort Collins Utilities will resume
disconnects as of May 3. In accordance with Governor executive order, Utilities will
continue not charging late or reconnection fees on past-due accounts. Disconnect notices have
been revised to reflect this information, as well as our continued efforts to present financial
assistance. Disconnect notices will continue to be revised as new financial assistance becomes
available.
Payments for utility services are essential to ensure the financial integrity and ability to
continue delivering reliable and high-quality electric, water, wastewater, and stormwater
services. Utilities staff plans to provide an update to City Council on utility delinquencies the
fourth Thursday of each month through June 2021.
Follow up on March 16
When would uncollected revenue be a concern for a potential rate increase?
Uncollected past-due revenues are considered anticipated revenue until a year has passed, at
which point the uncollected revenues are considered bad debt. Typically, we do not consider
past-due balances on active accounts as bad debt. However, an increase in the annual bad debt
expense, due to COVID-19, could drive the need to collect bad debt revenue from ratepayers.
This would occur if we do not manage service interruptions that partners with delinquent
customers on payment arrangements and financial assistance. To date there has not been an
increase in bad debt to trigger a request for a rate increase evaluated annually.
Delinquent Account Status Including Revenue:
The number of delinquent accounts fluctuates each month. The graph above is an example of the
utilities uncollected past-due revenue related to delinquent accounts. The graph shows that the
pandemic has caused hardship for many utility customers, and uncollected revenue has increased
to about $1.8 million at this time. Utilities typically writes-off about $300,000-$600,000 each
year in uncollected revenue as bad debt due to delinquency. If it becomes necessary to write
down the current outstanding balance, the use of reserves rather than increasing monthly rates
would be considered before any rate adjustment is brought to the City Council.
Are payment plans tracked in uncollected revenue?
The uncollected revenue tracking includes the total amount of revenues due to the Utilities, thus
includes the amount currently owed to Utilities as customers make payment arrangements. As
such, we are tracking customers through the billing system to avoid interruption based on
payment arrangements. Currently, there are 60 customers on payment plans owing $32,000 in
past due balances.
How will you be contacting utility customers prior to disconnection?
Outreach and Financial Assistance Provided to Delinquent Accounts:
Utilities has applied $117,500 of CARES Act and Payment Assistance Fund money to assist
customers who have struggled to pay their utility bills. Outreach has included mailings, emails,
and phone calls to advise them of the available funding.
Delinquent accounts receive monthly notices encouraging customers to contact Utilities
immediately and informing them of their options:
Pay your bill.
Set up a payment arrangement.
Utilize the Payment Assistance Fund.
Financial Assistance Being Considered:
Currently, Utilities is waiting for crucial decisions to be made regarding state and federal
stimulus packages, such as financial assistance for delinquent accounts, which could come from
utility-led programs and third-party nonprofit organizations. The biggest unknown at this time is
President and financial assistance that will be available for utility
assistance. Below is a summary of financial assistance.
Utility Led Financial Assistance
Platte River Power Authority Gift $468,941 City Council 2nd Reading of Appropriation
on 4/20/21
When the appropriation is approved, the details of this program will be similar to the CARES
Act application process in 2020. Customers will apply online or through Utilities customer care
center. The funds will be distributed on a first-come, first-served basis, and the customer will
have to show economic hardship due to the COVID-19 pandemic. Outreach will include direct
mailings, emails, and calls to eligible customers.
Third Party, Non-profit Led Financial Assistance
Payment Assistance Fund -
Energy Outreach Colorado
(La Familia, Catholic
Charities, Discover
$2.5M
Statewide
Funds for utility one time assistance, $1k per fuel
source, no LEAP requirement at this time,
customer needs to have an electric account,
$119,397 $86,751
$323,591
$69,786
$547,647
$28,262
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
2018 2019 2020 2021 ytd
Financial Assistance PAF CARES
Goodwill, Colorado State
University)
dollars need to be spent by 6/3/21, Utilities is a
partner
Consolidated Appropriations
Act
Neighbor to Neighbor
(working with other
nonprofits, more details to
come)
$10.7M
Larimer
County
Funds for rent and utility assistance were
provided to Larimer County, dollars need to be
spent by the end of 2021, County is hiring a
program manager, distribution expected to begin
by mid to late April, Utilities is a partner
CC: Lori Clements, Utilities Customer Care & Technology, Senior Manager