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Manteca writing off $141,743 in utility accounts
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Bad debt write-offs for non-payment of municipal utilities are down almost 46 percent from the peak of $261,954 in 2010 at the mid-point of the foreclosure crisis.

The Manteca City Council is being asked tonight to write off $146,743 in uncollectable utility accounts for water, sewer, and solid waste.  It represents 393 accounts which have been inactive since June 30, 2013. It reflects 4.47 percent of the total utility account receivables as of June 30, 2014. The losses are absorbed by other ratepayers. 

Last year the council wrote off 466 unpaid utility accounts totaling $153,675. The record write-off was $261,964 in 2010.

Most of the non-collectable accounts are from renters and homes that went into foreclosure. And as such, they have served as an indicator of the impact on foreclosures on Manteca.

Altogether, the council will be presented with a resolution to write off $202,841 of $581,526 in receivables compared to a year ago when the council write off $338,493 of $761,608 in outstanding receivables. That includedw a one-time “extraordinary” write-off of $101,953 for animal licenses due to issues related to converting animal licenses. This year a new system to keep on top of dog licenses drastically reduced outstanding receipts

The write offs won’t negatively impact the budget for the current fiscal year since write offs are already factored into the municipal budgeting process. Collection efforts though are continuing as allowed under state law.

The city five years ago instituted a policy requiring a renter’s agreement when water servcie is opened. That means to open a service, you must have a copy of the rental agreement. That makes it harder to simply shift the account into someone else’s name after it goes delinquent for several months unless a new rental agreement has been signed.

A number of those who were delinquent and had received final notices for water cutoffs would send someone else living in the household to say they were the new tenants and that they knew nothing about an outstanding water bill.

In most cases, the city had no way of verifying the validity of the story.

Oftentimes people who have stopped paying mortgage payments will — a month or so before they are sure they have to vacate the property — will stop paying for municipal utilities as well.

Utility write-offs were less than $70,000 for years until the housing crisis hit.

City officials had predicted without tightening up the rules on rentals plus sending out late notices quicker that the delinquency rate could have hit 10 percent and cost ratepayers who pay on time as much as $300,000 since they ultimately will have to absorb the losses Manteca is forced to write off.

In 2007, the city would issue 1,000 final notices to cut off water service for non-payment of municipal utility bills. Of those, 200 actually ended up with service turned off.

By 2008 when the housing market collapse started in earnest, there were 1,800 final notices mailed each month. City workers end up turning water service off to 400 homes in any given month.

That number has since been reduced significantly.

 

To contact Dennis Wyatt, e-mail dwyatt@mantecabulletin.com