New collection tool sensible

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City leaders recently authorized Denton Municipal Electric and other city utilities to use property liens as a way to collect large unpaid bills, and we believe the idea is justified.

We realize that some of you may disagree, but there are three main reasons we like the plan.

First of all, we think officials made it clear that they wouldn’t be using the new authority to harass homeowners who are down on their luck.

Officials said the new tactic will primarily be used to collect unpaid bills piled up by commercial customers — it can’t be used to collect unpaid bills from homeowners in their primary residence.

Plus, it won’t be used to collect unpaid bills from property owners whose tenants skip out on a city utility bill, according to the city’s customer service manager, Ethan Cox.

The new authority also cannot be used to secure bills that are currently past due — Denton has about $5.2 million in unpaid utility bills dating from October 2006. The city staff plans to use the new authority on future past-due accounts of $1,000 or more, Cox said.

Our second reason for liking the plan is the total in unpaid utility bills that Cox cited. We don’t know about your budget, but $5.2 million is a lot of money in our book.

Sure, we realize that Cox said the new authority can’t be used to secure bills that are currently past due, but that figure does provide a good indication of the severity of the problem and the need for an effective tool to help solve it.

Of the $5.2 million owed to the city, officials said, about 62 percent comes from more than 16,000 customers who owe, on average, about $200. At the upper end, about 400 customers owe, on average, more than $4,000 each.

Cox told City Council members that targeting that second group with the large outstanding balances is the reason for asking for the authority to use liens. Cox said he couldn’t say what percentage were commercial customers, but he assured the council that only a “handful” of residential customers ever got that far behind on their bills.

Our third reason for supporting the new plan is simple: We believe that utility customers should pay their bills, and judging from the current past due total — dating back six years — it’s obvious that many of them are letting this priority slide.

In seeking the authority, Cox told the council that the city would continue to file suit to collect past-due accounts of $5,000 or more.

The city has other collection strategies and continues to refer past-due accounts to its collection agency, Credit Systems International. The agency has about a 21 percent recovery rate for the city, and keeps between 18 percent and 22 percent of what it collects, Cox said.

In our view, authorizing city utilities to use property liens as a way to collect large unpaid bills is a logical weapon to add to the city’s arsenal.

Allowing some utility customers to avoid paying what they owe is costing us all.


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