FIRST ON 3: City now says CFPUA isn’t requesting $50,000 to try to collect old bills

WILMINGTON, NC (WWAY) – Nadine just talked to City Councilman Charlie Rivenbark who now says CFPUA isn’t asking for $50,000 after all to help hire an outside firm to try and collect bills that are overdue. Instead, the firm will also help collect old bills for the city, and both it, CFPUA and the collection firm will share what money is collected.

City Council will probably NOT discuss the issue at its meeting tonight.

Here’s the letter sent from the City Manager to Council Members to explain the issue:

11/16/2010

City Council
City Hall
Wilmington, North Carolina 28401

Dear Mayor and Councilmembers:

The Cape Fear Public Utility Authority (CFPUA) has entered into a contract with Penn Credit to pursue
revenue recovery which would take active collection action including reporting to national credit agencies for
accounts between one and three years in arrears. The need for hiring an outside agency is directly related to
the amount of accounts in arrears that occurred from the delayed billing issues when CFPUA was formed.
The CFPUA’s existing staffing levels are not adequate to pursue the accounts in arrears. Therefore, the
CFPUA has hired an outside agency to handle this function and they have requested the City to participate in
the contract.

The City of Wilmington and the CFPUA have an existing Interlocal Agreement that provides for the
application of payments made from customers in the following order: Stormwater, Solid Waste, Sewer and
Water; and that the City of Wilmington will benefit from the CFPUA’s contract with Penn Credit. This
agreement also outlines the services to be provided by CFPUA.

The actual financial impact will be based on successful collections which cannot be accurately estimated at
this time and that Penn Credit is only paid based on the amounts collected. Penn Credit will be paid 12% for
credit bureau reporting only, 19% for active collections and 28% for legal actions.
CFPUA has asked the City to be a party to this contract as any funds collected are paid first to Stormwater
and Solid Waste. Attached are the following documents:

1) CFPUA agenda Item

2) Letter that will be sent notifying customers that their account will be turned over to a revenue recovery
agency unless payment is made

3) Revenue Recovery Contract between CFPUA, the City of Wilmington and Penn Credit

4) Interlocal Billing Agreement between CFPUA and the City of Wilmington

The attached Supplemental Appropriation Ordinance requests funds to pay our share of the Penn Credit fees
from the additional revenue they will collect and also authorizes the City Manager to enter into the
O2-1 contract with CFPUA and Penn Credit.

Passage of the attached Ordinance is recommended.

SEE MORE OF THE DOCUMENTATION AT http://wilmington.granicus.com/MetaViewer.php?view_id=20&event_id=25&meta_id=79481

Respectfully submitted,

Sterling Cheatham,
City Manager