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.
That said I’d posit there is some good news in the trends beginning to emerge on the Water and Sewer Utility Ageing reports that I have published on Slabbed here and here. Yes, Al Showers still has some flapper value issues but in the “it will be a miracle if these accounts are ever collected column” (that would be the rightmost columns on the ageing reports) has decreased by a substantial amount and that is good news. Collecting old accounts, especially those from previous fiscal years is a very good thing from a budget standpoint and if there is bad news the budget is where it lies but that is another post.
This brings me back to that guesstimate of the City’s Utility DSO at 30 days. Its really more than just a guesstimate because I adjusted off the “it will be a miracle if these accounts are ever collected column” so as to get a better idea of how the more recent customer balances were being managed and 30 days is not a bad number. But that has been lost due to politics and hizzonner has no one but himself to blame by yammering about the problems he perceives in Wards 5 & 6.
I’ll have more after I get past the 15th.
Doug,
The saddest thing about the utility fiasco in the Bay is that the majority of the citizens probably don’t even know that they are paying off a loan to cover Solid Waste bills from last year after they all ( or shall we say 97% of them) paid their bills. Doug Seal ( Council Ward I) says it became a problem because they didn’t go up enough on their rates to cover what Solid Waste was charging them. But they could have sent them something, after all 97% of their users pay each month according to Seal and Fillingame. So, at this point in time, the users are paying their current $9 a month and the loan payments from last year.
I wonder if someone owed the Bay over $300,000 they would accept that as an answer for non-payment–“We just haven’t gone up enough on our merchandise or services to be able to pay you.”
This Council is beyond help. Why not just let Solid Waste bill the Bay users directly; Diamondhead does.
By the way, I understand Ward IV councilman Compretta is upset over Thorp’s presentation and there is supposed to be some new rule about citizens having to have the topic they want to discuss approved by the Council in advance. Can’t take the heat, Bobby, start finding the kitchen door.
Can’t wait for your next posting on this. They should really be thanking Thorp and the Alliance for Good Government because some of those pretty sizeable late accounts have been paid, and 6 of the 7 city employees that owed have paid.
Doug,
An up-date on the Bay’s delinquent utility account and failure to pay Solid Waste and Hancock County Utility Authority:
They stopped paying these two accounts in July of 2013. Only a month before that the Mayor stated at a public forum during the campaign that the city was financially solvent.There were no money problems.
He went as far as using the word “lie” when challenged about the city’s financial situation being in trouble.
So, if the city was solvent and there were no problems, why couldn’t they pay these bills just one month later. No one is fooled by this, except those who choose not to see. And with maybe one exception, Ward 5 Council Boudin, the council is either “out to lunch” or doesn’t care. I personally lean toward them still being at lunch.
Now, it was June when Hizzona was claiming solvency, July when they stopped paying bills, and in Aug. Ward II council Mcdonald asked the auditor if it was permissable to transfer funds between accounts in order to pay bills, if one account had more funds than another . The auditor said that it was ( I am not sure she knew the funds could have been earmarked for another agency in the county and neve really belonged to the city) but nevetheless, they could have paid Solid Waste and the Utility Authority out of another account., especially if they were “solvent and had no financial problems.” But that didn’t happen for four months until they strapped the citizens with a loan to pay those accounts for which they had already collected money!!
The final blow is ALL of the citizens are having to pay back this loan, even those terrible people in Wards 5 and 6, who get their utilities from another agency in the county. Remember, they are supposed to be the reason the city has problems (what problems, we’re solvent?!!).
It is a Zoo in the Bay right now, has been for a while, and just wait til the next project gets going–the Harbor!!!
i would like the city to send the alliance for good government an invoice for the fiasco that they caused regarding the time frame for a special meeting.. this cost the taxpayers of Bay St Louis a lot of money-due to the fact that ms nooner takes items out of text and-maybe the allilance for good government should consider a better representative
Waveland utility bills along with the Bay that she sensationalizes and what she doesn’t say that the majority are accounts that are on the books are people who never returned to the area…and bless them that they think so little of the bay council that mr Thorpe has to bring visual aid-how insulting
maybe someone need to bring in a model of a pier and instructions on how to properly go about building one the legal way-