1999 AGN JAN 19 I19 - Laserfiche WebLink

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CITY OF COLTON AGENDA REPORT For the City Council Meeting of January 19, 1999 TO: Honorable Mayor and City C un it APPROVAL: Henry Garcia, City Manage FROM: Thomas K. Clarke, Utility Di ctor SUBJECT: APPROVE REVISION OF CUSTOMER SERVICE POLICY NO. 17 - LEVEL PAY PLAN DATE: Wednesday, January 6, 1999 BACKGROUND: Many utility customers have some monthly bills that, due to air conditioning or electric heating, are much higher than the rest of the year. These higher bills may be difficult to pay and may result in hardship to the customer, overdue bills and even service interruption or termination. A level pay plan provides for equal monthly payments based on average annual utility costs, spreading out the higher bills over an entire year. A level pay plan gives customers a predictable monthly payment that will allow customers to make payments within their budget. DISCUSSION/ANALYSIS: Many utilities have budget or level pay plans. These programs can benefit the customers involved and the utility by providing a predictable, affordable bill to the customers and the utility with more constant revenues throughout the year. These programs also reduce delinquent bills and utility shut -offs and collection problems. Level pay plans require some staff time to set up and administer but will reduce staff time spent on resolving problems with seasonally high bills that customers may have difficulty paying. The Utilities Commissioners voted their unanimous support at the December 14, 1998 meeting. ALTERNATIVES: Credit plans, and bill extensions are done on a case-by-case basis and still leave the customer with high seasonal bills and often result in delinquent payments, write-offs, losses in revenue and problems with customer relations. Some other billing methods such as "pay as you go" have not been developed well enough to cost effectively implement, and would not provide payment relief during the peak utility use periods. FINANCIAL IMPACT: The revenue stream created by this program should be positive and reliable. It is expected that a level pay plan will reduce delinquent bills, lost revenues, and the staff time devoted to dealing with high -bill problems. The costs of implementing and administering a level pay plan should require minimal staff time and resources. RECOMMENDATION: That the City Council adopt a Level Pay Plan for utility customers by the attached Resolution. Report prepared by: Gerald Katz, Energy Services Specialist Page 1 of 1 (w/attachments) Item # 19