LATHROP – The policy that the City of Lathrop maintains when it comes to receiving utility bills is clear.

Those that pay on time get to enjoy the benefits of sewer and water hookups in their home or apartment. Those that wait more than a month and disregard the notices sent out get their utilities turned off and face a $60 fee to get it turned back on.

But now the Lathrop City Council will reexamine that section of the Municipal Code – which was first adopted in January of 2000 – to determine whether the fee is too much of a burden for people in the community to pay.

Council member Omar Ornelas asked for the item to be placed on the agenda during the council’s first August meeting.

According to the report prepared by city staff, Lathrop collects upwards of $65,000 annually from customers who don’t heed the warnings prior to the disconnection date. With roughly 100 customers finding their taps dry at the cutoff date every month, the city receives back payments complete with fees from roughly 80 percent of those people.

Not all of the people that receive notices, however, have the means to pay.

The finance department does work with people by setting up payment plans and offering periodic extensions, according to the report. Depending on the case and whether the customer meets certain criteria, the actual amount of the bill can be written off.

And even though one city utility bill might not seem like much, last year the City of Lathrop had to absorb nearly $31,000 after 196 accounts went into default and never made good on their obligations.

In comparison, the City of Manteca had to write-off just over $225,000 this last year in unpaid utility bills. It was actually a decrease from the nearly $262,000 that they agreed to underwrite the previous year.

Staff is recommending that that the reconnection fee remains at $60 so that the city can remain on track with meeting the necessary bond covenants they’re responsible for. If the fee were to be dropped, the report states, the reconnection fee would be negatively affected and a subsidy from the General Fund may be needed to meet water fund debt obligations.

The money that the city collects from reconnection fees is already factored into the water rate calculations and the debt coverage rations for both the 2000 and the 2003 water revenue bonds and the loans that accompanied them.

Lathrop will have their water rates re-evaluated in 2013 as part of a five year strategic plan that was adopted in the 2008/09 fiscal year.