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City targets unpaid bills
Thursday, March 14, 2013
By MICKEY POWELL - Bulletin Staff Writer
About $450,000 in utility bills and $210,000 in business license fees have gone uncollected in Martinsville during the past five years.
When Martinsville City Council learned about the uncollected money Tuesday night, two council members and a city resident at the meeting were irked.
“It’s unacceptable to let bills go for years and not be paid,” said Vice Mayor Gene Teague.
Through taxes and fees they pay for services, residents and businesses who pay their bills are subsidizing those who do not, Teague said.
“It’s quite disturbing,” said city resident Ural Harris, who frequently speaks from the floor at council meetings to criticize officials’ actions. “It is totally inexcusable that you let these accounts get so behind.”
Someone seems not to be doing his or her job, Harris said, and Councilwoman Sharon Brooks Hodge, who joined the council in January, agreed.
“You all ought to be ashamed,” Harris told the council.
A recent independent audit of the city’s fiscal 2012 finances revealed no mismanagement.
However, city officials are developing a policy for handling unpaid bills that will be presented to the council for consideration at an upcoming meeting.
“Give us time to work on this (policy) before you shame us,” Councilman Mark Stroud told Harris.
The city collects about $25 million in utility bills a year. The approximately $450,000 uncollected during the past five years is less than 0.5 percent of the roughly $125 million collected during that period, Interim City Manager Leon Towarnicki said Wednesday.
Utility bills are not the only ones outstanding.
Since fiscal 2008, the city has assessed slightly more than $8.84 million in business and alcoholic beverage sales licenses. Of that amount, a little more than $210,316 has gone uncollected. That is about 2.4 percent of the total assessment, according to Ruth Easley, the city’s revenue commissioner.
Towarnicki and city Finance Director Linda Conover said they had not yet compiled figures for other types of uncollected bills, such as real estate.
In separate interviews Wednesday, both Towarnicki and Easley said they think the amounts uncollected are “pretty good” when examined with the amounts collected.
“We’ve got just a few (account holders) who are, for lack of a better word, deadbeats,” Easley said. But “it’s not fair to the people who are paying (bills) on time.”
Easley said her office is seeing more unpaid business license fees. She said she thinks that is due to changes in collections procedures in recent years that have de-emphasized taking account holders to court.
Due to a shortage of employees, her office gets behind when workers must attend court cases, she said.
Payment plans can be set up for people who have trouble paying their bills, officials have said.
The city is able to use techniques such as liens and garnishing wages, but the threat of legal action is “the most effective deterrent” as far as people not paying, Easley said.
Asked if she thinks the city’s collection efforts are adequate, Easley said “there always is room for improvement.”
Collecting on delinquent accounts often is not easy, Towarnicki and Easley said.
For example, they said, people leave Martinsville and it takes time to track them down. Also, people die or businesses close and they have little, if any, assets that the city can tap to get money it is owed.
In the case of businesses not paying their utility bills, there are factors that must be considered before the city shuts off service, Towarnicki said.
He said, for instance, that a firm may cease operating and the owners may not be able to afford to pay the bills, but they must keep the heat on inside the building to prevent pipes from bursting.
There is “no clear-cut” way to deal with such instances, he said.
Towarnicki told the council “it’s been unofficial policy” not to shut off utility service to businesses that do not pay their bills because officials do not want the city to risk losing the jobs those firms provide.
But that would be a last resort, and businesses should not take that to mean they can get away with not paying their utility bills, he said Wednesday.
“Businesses can have their utilities turned off” for not paying their bills, Towarnicki emphasized.
When a business does not pay its bills, the city takes into account various factors, including how many people the firm employs, in determining how to handle the situation, he said.
Generally, the city tries to work out payment plans for businesses with hardships, just like it does with residents who cannot pay bills, he said.
The “unofficial practice” may have to stop because some businesses have been on the unpaid utility account list for years, he told the council.
He said he could not name those businesses because utility accounts are not public information.