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Indian River County, Florida Department of Utility Services Board Memorandum Date: October 14, 2020 To: Jason E. Brown, County Administrator From: Vincent Burke, PE, Director of Utility Services Prepared By: Cindy Corrente, Utility Finance Manager Subject: Utility Accounts Receivable Bad Debt Background: During late 2018 and early 2019, staff with the Indian River County Department of Utility Services (IRCDUS) made a series of presentations to the Board of County Commissioners (BCC) regarding past - due balances related to services for utility reserve accounts. The end -result was the adoption of County Ordinances 2018-027 and 2019-002. These code modifications provided the framework to enable staff to work with customers with past -due balances to settle their debt at significantly reduced rates. It also established policy to enable staff to address similar circumstances as they occur and toy prevent the excessive accumulation of bad debt from reserve accounts moving forward. The process resulted in 765 water and 879 sewer equivalent residential units (ERUs) being relinquished or reclaimed by the County. That, in turn, freed up capacity in the system. There is only one remaining property left to resolve through the foreclosure process. The most significant impact to the utility was the write-off of just over $4.8 million in bad debt. Analysis: At this time, there are 295 past -due utility accounts that have fees and charges over twenty-four months old. Thirty-eight percent of these accounts have past -due amounts over twenty years old. From time to time, owners of some of these properties have appeared before the BCC to request waivers of some of the fees affiliated with these accounts. One such situation occurred on March 17, 2020, when Mr. Brodley Williams appeared before the BCC regarding a property that he and his father purchased from a tax deed sale. At the time, the lien on the property was for over $39,000. After listening to Mr. Williams, the BCC advised staff that they should develop a policy in order to deal with this type of situation and bring back an analysis of these accounts for BCC review. The purpose of this agenda is to fulfill that directive. Staff worked to review the aged receivables and formulated proposed options for the BCC to! consider as policy. Staff consulted with the County Attorney's office while working on the directive. In so doing, staff learned that there are limitations regarding collections related to certain liens. Pursuant to Florida Statute Section 153.67, utility and special assessment liens more than 30 days old may be foreclosed upon by the County in the manner provided by the laws of Florida for the foreclosure of a mortgage on 93