I’ve never heard of a financial measure for trade receivables called “collection rate” but the term was evidently dropped a good bit at last Tuesday’s City Council meeting like it meant something from a financial standpoint. (The typical measures of receivable efficiency are properly called receivable turnover and my personal favorite, the DSO. I have guesstimated the City’s DSO at somewhere close to 30 days for purposes of this post.)
I mention all this because there has been some chatter about last Tuesday night’s Bay St Louis City Council meeting and delinquent utility bills was a topic of conversation. Let’s start with Dwayne Bremer’s account of it to set the mood:
Ron Thorpe, a member of the Hancock County Alliance for Good Government, on Tuesday appeared before the city council and offered an aggressive presentation with props such as a large garbage bag filled with paper and 135 water bottles arranged on a table.
The garbage bag, he said, represented $400,000 in uncollected utility bills. The 135 water bottles represented how many utility customers are more than 60 days past due, he said.
Councilmen and the audience sat in stunned silence during the presentation. At one point, Thorpe held the garbage bag above his head, shook it, and then threw it toward the council podium.
The story is framed around the mythical “collection rate” ratio, which the City claims is 97%, a number that even if mathematically true is meaningless. Continue reading “Welp, last week’s City Council meeting must have been a doozy……”