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HomeMy WebLinkAboutCollections- Utility and Miscellaneous Receivable - FIN-FEE-517Page 1 of 11 POLICY FIN-FEE-517 Collections- Utility and Miscellaneous Receivable Category FIN - Finance Sub-category FEE - Fees, Costs & Collection Approval Type COUNCIL Department/Division Financial Services/Revenue Division Author and Position Director of Revenue Date Approved September 20, 2004 Last Reviewed/Amended June 23, 2025 Next Review Date June 1, 2030 Related Policies or Procedures • Municipal Act 1. Policy Purpose The purpose of the utility collections policy is to document and improve existing collection practices as it relates to collection of utility and miscellaneous receivables. 2. Definitions Good Payment History – Where a residential customer has been serviced by an electricity or gas distributor in North America for twelve consecutive months (within the last 24 months) and has not received any disconnection notice, late payment charge and has not had more than one pre-authorized payment or cheque returned due to insufficient funds. Interest – is the amount added to the utility account once the utility bill is in arrears. 3. Policy Scope The Municipal Act serving as the base, this policy provides a guide to staff on aspects of billing and collection of utility and miscellaneous receivables as it applies to the City of Kitchener. Application ☒ Employees (Indicate below which categories apply: All employees, Permanent full-time, Temporary full-time, Continuous part- time, Casual, Probationary, Student, Management, Non-union) • All employees ☐ Unions (Indicate below which categories apply: All Unions, CUPE 68 Civic, CUPE 68 Mechanics, CUPE 791, IATSE, IBEW, KPFFA) • Click or tap here to enter text. ☐ Council ☐ Specified Positions: Click or tap here to enter text. ☐ Other: Local Boards and Advisory Committees Page 2 of 11 4. Policy Content 4.1 OBJECTIVES i. Establish processes for billing of utilities and miscellaneous receivables. ii. Ensure the timely collection of utilities and miscellaneous receivables. iii. Establish processes to collect utilities and miscellaneous receivables. 4.2 GOVERNING PRINCIPLES iv. The procedure of collecting utilities and miscellaneous receivables should be applied universally, uniformly, and consistently. v. The City Treasurer may exercise discretion in furthering the objectives of this policy. vi. To clearly articulate the guidelines staff will follow for collections of utility and miscellaneous receivables. vii. At all times, the City should take reasonable care to respect and protect the interest of the customer as well as that of the City, including the rights to privacy and confidentiality. 4.3 BILLING PROCEDURES i. All customers will receive bills for services rendered during the billing period. This can include charges for consumption for utility or other services. ii. Bills will be delivered in a timely manner, with due dates clearly indicated. The City will make reasonable efforts to provide bills electronically or through paper mail, depending on customer preferences. iii. Customers will be informed of any changes to billing rates or fees at least 30 days before the effective date. 4.4 CONTRACT FOR SERVICE Tenants requesting service with Kitchener Utilities (KU) will be required to: i. Sign a completed Tenant Contract. When signed, the Tenant Contract forms a legal and binding contract that the customer and KU have accepted and mutually agreed to the terms of the Agreement. ii. Present one piece of appropriate picture identification or two pieces of government identification. iii. If the property has multiple units, for any utility service where there is only one Page 3 of 11 meter or one gate box, the utilities will remain in the owner’s name. 4.5 SECURITY DEPOSITS i. Residential and commercial tenants will be required to pay a Security Deposit to KU when applying for service unless the customer is able to provide confirmation of a "Good Payment History”. Security Deposits may be required from any customer who does not maintain a "Good Payment History" for the required time period. ii. Security deposits may be in the form of cash or cheque. A letter of credit will not be an acceptable form of security deposit. iii. The tenant deposit will be charged to the customer's account at the time of the application. All normal billing rules apply to tenant deposits added to a customer account. Administration and Refund of Security Deposits i. All amounts held on deposit will be applied to the final bill on close of the customer account. ii. For existing customers where a Security Deposit has not been collected, or a customer who previously was granted a security deposit waiver, a Security Deposit will be required if the customer has not maintained a "Good Payment History" for the required time period. iii. A customer failing to provide the appropriate security deposit shall be deemed to be in the position as a customer in arrears and subject to collection procedures including service disconnection if the deposit remains unpaid past the due date. iv. Deposits may be requested and may be adjusted to reflect changes in rates, actual usage, or if a "Good Payment History” was not maintained. Tenant Deposit Amounts i. Residential Customers - Natural Gas • Minimum amount as specified on the Fees and Charges Schedule ii. Residential Customers - Water and Sewer • Minimum amount as specified on the Fees and Charges Schedule iii. Commercial Customers - Natural Gas • Minimum amount as specified on the Fees and Charges Schedule, or • Three times the monthly average of the previous twelve months consumption history • In the absence of consumption history, $200.00 per 1,000 sq. ft. of space rounded to the highest $25.00. Page 4 of 11 iv. Commercial Customers - Water and Sewer • Minimum amount as specified on the Fees and Charges Schedule, or • Three times the monthly average of the previous twelve months consumption history. • In the absence of consumption history, Revenue staff will determine the deposit amount based on type of business. v. A commercial deposit amount may be reviewed, upon request, at any time if there is sufficient history to support a change. Waiving of Tenant Deposits i. The tenant deposit may be waived for tenants signing up for the pre- authorized payment plan. KU reserves the right to charge the deposit to the account if the pre-authorized plan is revoked by KU due to unacceptable payment history. ii. The tenant deposit may be waived for tenants providing Good Payment History. Interest on Security Deposits Interest on cash security deposits is paid annually commencing on receipt of any paid deposit amount and will be credited to the customer’s utility account. The interest rate paid on cash security deposits shall be at the Prime Business Rate as published o n the Bank of Canada website less 2%, updated quarterly. Security Deposit Exemptions i. The following customers do not require a security deposit: • Banks and Credit Unions • Trust Companies (Trust Company Real Estate offices are not exempt) • Government Agencies including City, Region, Provincial and Federal offices including Liquor Stores. • Customers who own their own property. ii. A deposit is not required if a customer provides a letter of reference from a gas or electric distributor in Canada confirming a "Good Payment History" for the relevant time period. If an existing KU customer signs up at a different address and has “Good Payment History” with KU previously, the existing deposit on file may be refunded or transferred to the new account. iii. Any member of the Revenue Management Team may in special circumstances alter the deposit amount or payment arrangements of the Security Deposit. 4.6 MAILING OF BILLS i. Any notices sent by ordinary mail are considered delivered to and received by the addressee unless the notice is returned by the Post Office or an error in the mailing address is proven. Failure to notify the Revenue Division of an address Page 5 of 11 change is not an error. ii. A customer may enroll in the City’s electronic billing (e-billing) option to receive their utility bill notification directly to the e-mail address provided. The utility bill shall be deemed to have been received on the next business day after the notification was sent. 4.7 PAYMENT OF BILLS i. Payment will be in the form of cash, cheques, money orders, bank drafts, pre - authorized payment plan, internet and telephone banking made payable to the City of Kitchener. Cheques which are post-dated will be accepted and held by the Revenue Division. Payment of Utility and miscellaneous receivable will be accepted at the City of Kitchener, Revenue Division, at local banks or via mail to: City of Kitchener, Finance and Corporate Services Revenue Division P.O. Box 1113 STN C Kitchener, ON N2G 4R6 ii. A bill is due when rendered by KU. iii. A customer may pay the bill without the application of a late payment charge on amounts paid on or before the seventeenth day after the bill is issued. iv. Payments will be deemed to be made on the date payment is received by KU. v. Notification of all past due amounts will be included in the following month's billing. vi. In the case of retroactive billing, payment arrangements for the back billed amount may be approved by a Customer Service Representative or a member of the Revenue Management team depending on the period back billed and the amount of the retroactive billing. vii. Change will not be returned for cheques accepted in excess of the amount due. Should a credit appear on the Utility or Finance account because of the payment, it will be applied to subsequent bills not yet due. However, at the request of the resident a refund cheque will be requisition, after allowing sufficient time (15 business days) for the resident’s cheque to clear their financial institution. Further, any administrative fees will be applicable as outlined in the City’s Fees and Charges Schedule for the related year. viii. Should payment be tendered in US funds, it will be accepted at the exchange rate established by the financial institution holding the accounts of the City of Kitchener on that day. 4.8 ALLOCATION OF PAYMENTS Page 6 of 11 i. Payment will be applied to any outstanding deposits and to any outstanding arrears before being applied to the current billing, unless KU has made special considerations. 4.9 LATE PAYMENT CHARGES i. If the bill is unpaid on the seventeenth day, a one -time "late" payment charge of two percent will be applied. ii. Late payment charges of up to $20.00 may be waived due to extenuating circumstances at the discretion of authorized Revenue staff. Late payment charges exceeding $20.00 may be waived due to extenuating circumstances at the discretion of a member of the Revenue Management team. 4.10 BILLING ERRORS i. Where billing errors have resulted in over-billing, the customer will be credited with the amount erroneously paid for a period not exceeding six years. ii. Where billing errors have resulted in under-billing, the customer may be charged for a period not exceeding: • one year or • six years in cases such as tampering or fraud iii. Where a customer is responsible for the underbilling, the utility may require payment of the full amount of the under-billing on the next bill or on a separate bill. 4.11 UNAUTHORIZED CONSUMPTION i. Where meter tampering or theft of service has been detected, the customer may be charged for consumption based on previous history, or actual usage, or similar use properties for the applicable period. ii. In addition to the consumption charges outlined under billing errors above, an administration fee as outlined in the Fees and Charges Schedule will be applied to the account where meter tampering or theft of service has been detected. 4.12 TERMINATION NOTICES A. Active Tenants i. Natural gas and water customers with a past due amount greater than the parameters set by the Revenue Division will be reviewed by a Collections Officer. ii. Natural gas and water customers will receive a termination notice in Page 7 of 11 writing when the Collections Officer's assessment warrants this action. From November 1 to March 31 on tenant occupied properties, property owners will receive written notification of the pending service disconnection. iii. The customer will receive eight (8) calendar days’ notice before termination of a service for non-payment. iv. Prior to disconnection, a representative of KU will make a reasonable effort to establish direct contact with the customer. v. If suitable payment arrangements have been made with Collections, further collection activity for that customer's billing period will be suppressed. vi. A 24-hour notice of disconnection will be delivered in person by a collection officer before service is disconnected. vii. Prior to actual termination, the customer's account is reviewed and approved for termination by a Collections Officer. viii. KU reserves the right to disconnect services as an alternative collection method. ix. Tenants with a service disconnected for a period greater than one year may be forwarded to a third-party collection agency. B. Final Billed Tenants i. Collection letters will be sent to all tenants for accounts with a final billed arrears balance. All reasonable attempts to collect the arrears will be made. ii. If the tenant has an active gas and/or water account, all unpaid arrears balances will be transferred to the active account. iii. If the final billed tenant does not have an active account, the arrears will be written off as an uncollectible debt following the bad debt write -off procedures as outlined in “Bad Debt Write off Procedures” section. C. Active Owners i. Natural gas, water and/or rental water heater customers' accounts with a past due balance greater than the parameters set by the Revenue Division, will be reviewed by a Collections Officer. ii. Natural gas water and /or rental water heater customers will receive collections notice in writing when the Collections Officers assessment warrants this action. Page 8 of 11 iii. The customer will receive eight (8) calendar days’ notice before transferring the debt to the property tax account. iv. If suitable arrangements for payment have been made with Collections, all further collection activity for that customer's billing period will be suppressed. v. Prior to actual transfer to taxes, the customer's account is reviewed and approved for transfer to taxes by a Collections Officer. vi. KU reserves the right to disconnect services as an alternative collection method. vii. The Collections Officer will send a letter of advisement to the Mortgage Company about the transfer of utility arrears to taxes when property taxes are paid by the Mortgage Company. viii. If a property owner is in arrears on both utilities and taxes for a period of two years, the collection process for utility arrears will follow the same process as Active Tenants. ix. In situations where property taxes are only being paid and not the utilities, the collection process for utility arrears will follow the same process as Active Tenants. D. Final Billed Owners i. A collection letter will be sent to the property owner for accounts with a final billed arrears balance. ii. All reasonable attempts to collect the arrears will be made. iii. If the customer still owns the property and taxes are paid by a Mortgage Company, a notice will be sent by a Collections Officer to advise the Mortgage Company of the transfer of utility arrears to taxes. 4.13 RECONNECTION OF SERVICES i. Payment in cash, certified cheque, money order or debit is required for the total arrears due before the utility service is restored. ii. Disconnected meters will be reconnected after regular office hours as follows: • November 1 - March 31 Gas Service only will be reconnected with Revenue Division authorization. The customer is advised to contact a Collections Officer by 10:00 a.m. on the next business day to arrange for payment. Customers who do not meet this requirement will be disconnected the same day. No further after-hours Page 9 of 11 reconnection will be permitted in this instance. • April 1 - October 31 Gas or Water Services will not be reconnected after hours without Revenue Division authorization. 4.14 MISCELLANEOUS CHARGES i. Disconnection Fee - A disconnection fee as outlined in the Fees and Charges Schedule will be applicable for each disconnection. ii. Notice Delivery Fee- A notice delivery fee as outlined in the Fees and Charges Schedule will be applicable for each notice delivery. iii. Meter Removal due to Non-Payment - A meter removal fee as per the Fees and Charges schedule will be charged for each meter removal. iv. Utility Administration Fee- All customers who initiate service with Kitchener Utilities, or who change the location for service, shall pay a Utility Administration Fee for each transaction as outlined in the Fees and Charges Schedule. v. Returned Cheque Charge (or NSF Charge) - If a cheque is returned by the customer’s financial institution as Not Sufficient Funds (NSF), the following will apply: • An administration fee as set out in the Fees and Charges Schedule will be charged to the customer's account. • A letter will be issued to the customer advising of the returned cheque. The payment will be requested in cash, debit, money order or certified cheque. • When the cheque returned by the customer's financial institution was made on a Disconnect Notice for a tenant, a subsequent Disconnect Notice will be issued to the tenant. (depending upon the time of year, the property owner may be sent a Notice of Pending Disconnect). 4.15 MISCELLANEOUS RECEIVABLES i. Miscellaneous Receivables include billing for services other than property taxes or Utilities. Examples of these services include Direct Detect for Fire Alarm Monitoring, Parking and Cemetery sales. ii. Friendly reminder notices will be sent out to all accounts with amounts in excess of one month overdue. iii. For arrears greater than 60 or 90 days, a collections letter will be sent out advising the customer that the invoice is past due and payment is required in full. iv. Accounts with arrears that are deemed as uncollectable by Collections Staff will be forwarded to a third-party collection agency. Page 10 of 11 4.16 BAD DEBT WRITE-OFF PROCEDURES i. Staff will write-off uncollectable accounts for both Utilities and Miscellaneous receivables two times a year. ii. A summary of write-offs by account category will be provided to Council two times a year. iii. An electronic file is transferred to an outside collection agency containing all eligible accounts two times a year. iv. Uncollectable Utility and Miscellaneous receivable accounts will be written off to the Allowance of doubtful Utility and Miscellaneous accounts respectively. v. If a customer with a bad debt write-off subsequently opens a new account in the KU service area, the Collections Officer and the collection agency will work in conjunction to collect the bad debt, including termination of service at the new location. Refunds/Overpayments/Misapplied payments i. Refunds requested by customers due to overpayments must be submitted in writing and be accompanied by proof of payment. Utility accounts with balance owing will not be eligible for refunds unless approved by a member of the Revenue Management Team. Any administrative fees will be applicable as outlined in the City’s Fees and Charges Schedule for the related year. ii. Erroneous payments made by the customer to a utility account require a written request to correct the payment application. Any administrative fees will be applicable as outlined in the City’s Fees and Charges Schedule for the related year. iii. Overpayments from customers who cannot be located will be retained in a holding account for 7 years, after which the overpaid amount will be transferred to the Utility Reserve Fund. Small Balance Write offs i. The Treasurer may cancel any overdue amount less than +/- $10 that the customer owes to the City for the preceding year. ii. The City shall not, otherwise, cancel any outstanding debt above $10, unless the City Treasurer deems it appropriate to do so. The Treasurer’s reasons for writing off any outstanding debt that is above $10 should be communicated in writing to Council stating the reasons for taking such a decision. 5. Results of Review ☐ No Edits Required ☐ Housekeeping Edits ☒ Substantial Edits ☐ Repeal/Replace Page 11 of 11 6. Policy History Administrative and Housekeeping Changes Date Nature of Change 2016-06 Policy I-518 template re-formatted to new numbering system and given number FIN-FEE-218. Substantial Changes Date Council/CLT Directive 2024-06-16 Policy updated 2025-06-23 As Per Council/CLT Directive - Report COR-2025-269