Agenda 09/28/2010 Item #16C 3
Agenda Item No. 16C3
September 28, 2010
Page 1 of?
EXECUTIVE SUMMARY
Recommendation to approve a Policy Statement to collect monies owed to Collier County
for the repair of utility and other assets damaged by vendors and contractors that are
doing business with Collier County.
OBJECTIVE: Approve a Policy Statement to collect monies owed to the County for the repair
of utility and other assets damaged by vendors and contractors that are doing business with
Collier County.
CONSIDERATIONS: Occasionally, vendors and or contractors performing work in Collier
County damage a utility or other asset. Also, sewage/septic vendors may inject grease or septic
materials into the wastewater stream that receives extra treatment by the wastewater utility in
accordance with the Industrial Pretreatment Ordinance 2003-] 8, approved by the Board of
County Commissioners on April 22, 2003.
Repairs to damaged assets are often critical to maintain public health and safety. Costs incurred
by the County to repair assets damaged by a vendor or contractor currently doing business with
the county that does not have an established account are billed to the party identified as being
responsible for the damage. These miscellaneous invoices are sometimes not paid or remain
unpaid for long periods of time. Repair costs incurred by the County and not recouped from the
responsible party will result in rate increases passed on to all utility customers, fee increases or
other increases in revenue.
As an example, the invoicing and collection process used in Public Utilities is summarized in
Exhibit I. Contact with the vendors and contractors include the following notifications:
I. The initial invoice is sent and may be disputed within 14 days of receipt.
2. If the invoice is undisputed and is past due 30 days, a first dunning letter is sent
reminding the party that the invoice is delinquent.
3. If the invoice remains unpaid and ages to 60 days past due, a second dunning notice is
sent requesting immediate payment.
4. If the invoice remains unpaid and ages to 90 days past due, a third and final dunning
notice is sent, stating that the amount will be sent to a collection agency if payment is not
received within 30 days of the date of the final notice.
5. If payment is not received. the amount is sent to the county's approved collection agency
vendor (Mintex) for collection.
Only after all co llection efforts have been exhausted, and the debt remains unco llected, would
this offset policy be initiated. The intent of the proposed Policy Statement is to permit the
County to offset the amounts owed to the County against the amounts owed to vendors or
contractors for services performed or for materials delivered in association with a contract with
another division or department within the County Manager's Agency. Exhibit 2 demonstrates
that the total accounts receivable balance in Public Utilities is approximately $372,000. Of that
total 42%, or $156,000, is due from parties that are current Collier County vendors.
Agenda Item No. 16C3
September 28, 2010
Page 2 of 7
Staff has worked in concert with the County Attorney's Office, the Purchasing Department, and
the Clerk's Finance to develop this policy. The County Attorney's Office has opined that
delinquent amounts owed to the Public Utilities Division may be offset against payments to
vendors and contractors.
While this Policy Statement is written for immediate implementation in the Public Utilities
Division, it is the intent of staff to utilize it, with a similar set of procedures, in any division or
department that finds itself in a situation where a vendor owes monies to the County that have
gone unpaid after attempts at collection.
FISCAL IMPACT: There would be a favorable fiscal impact to the Public Utilities Division
revenues if monies collected via implementation of this policy were received. However,
uncollected delinquent invoices for repair of damaged assets would be charged to the current
fiscal year's operating budget as bad debt in the Collier County Water-Sewer District Operating
Fund (408) in the amount of approximately $] 56,000.
GROWTH MANAGEMENT IMPACT: There is no Growth Management Impact.
LEGAL CONSIDERATIONS: This item has been reviewed and approved by the County
Attorney's Office and is legally sufficient-JBW.
RECOMMENDATION: Approve a Policy Statement to collect monies owed to the County for
the repair of assets damaged by vendors and contractors that are doing business with Collier
County.
PREPARED BY: Steve Carnell, Purchasing Director
Joe Bellone, Manager, Utility Billing and Customer Service
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Agenda Item No. 16C3
September 28,2010
Page 4 of 7
Policy Statement
Delinquent Vendor and Contractor Invoices
Purpose
Ensure the collection of monies owed to the Public Utilities Division (PUD) to recoup costs
incurred by the PUD:
I. to repair utility assets, owned and operated by the PUD, that are damaged by identified
vendors and contractors, and
2. to treat industrial strength waste il'\iected into the wastewater treatment stream by
sewage/septic vendors, in accordance with the Industrial Pretreatment Ordinance 2003-
18.
The repair of darr1aged assets and the treatment of industrial strength wastewater are critical to
maintain public health and safety. Costs incurred in connection with these activities, if not
recovered from responsible parties, must otherwise be borne by all the ratepayers (customers) of
the PUD.
Backl!round
Occasionally, vendors and/or contractors damage a PUD utility asset (broken water main, sewer
lateral, etc.). Also, sewage/septic vendors may inject grease or industrial strength materials into
the wastewater stream that must be treated. When the PUD's operating departments (Water,
Wastewater, or Solid Waste) identify the vendor or contractor that caused the damage or
introduced material into the wastewater strean1, the departments request reimbursement from that
party for costs incurred (either internal time and materials, or outside underground contractors, or
cost per tbousand gallons) to repair the damaged asset, or treat the wastewater. An invoice is
sent by the Utility Billing and Customer Service Department, initiated by the operating
department, to the business address of the vendor/contractor with payment requested within 30
days. The vendor or contractor may dispute the invoice within 14 days of the date of the invoice.
If the invoice is unpaid at the end of 30 days, the first dunning notice is sent. After 60 days, a
second dunning notice is sent. If the invoice remains unpaid after 90 days, a third and final
dunning notice is sent to notify the party that the account is being sent to a collection agency.
The collection agency may not always be successful collecting the delinquent balance. If all
attempts at collection fail, then it would be the practice to offsct payments to vendors or
contractors by the amounts owed to the PUD. Staff would notify the vendor, in writing, prior to
initiating this procedure.
Agenda Item No. 16C3
September 28, 2010
Page 5 of?
Offset of Pavrnents to Vendors and Contractors
It is the intent of this statement to establish a policy to offset the amounts owed to a vendor or
contractor (accounts payable) for performance ofa service or provision of materials (to a Collier
County department) against the amount owed to the PUD (accounts receivable) for costs
incurred to repair damaged assets or to treat industrial strength wastewater.
Amounts owed to the PUD recorded in the general ledger as accounts receivable, object code
115000, aged 91 days or more, would be subtracted from (offset against) the next payment due to
the vendor or contractor to recoup the monies owed to the PUD if all other attempts at collection
prove to be unsuccessful.
If the amount owed to the vendor is greater than the amount owed to the PUD, the entire amount
owed to the PUD would be deducted from (offset against) the next regularly scheduled payment
to the vendor or contractor. The vendor would receive a payment net of the delinquent amount
owed to the PUD.
If the amount owed to the vendor is less than the amount owed to the PUD, the amount owed to
the PUD, in an amount equal to the amount owed to the vendor, would be deducted from the next
regularly scheduled payment due, resulting in a "net" zero dollar payment (i.e., no payment).
This process would continue until all amounts owed to the PUD have been offset against
amounts owed to a vendor or contractor. Once the amount owed to the PUD by a vendor or
contractor is zero, payments to that vendor or contractor would resume.
Agenda Item No. 16C3
September 28,2010
Page 6 of?
COLLIER COUNTY
BOARD OF COUNTY COMMISSIONERS
Item Number:
Item Summary:
16C3
Meeting Date:
Recommendation to approve a Policy Statement to collect monies owed to Collier County for
the repair of utility and other assets damaged by vendors anc~ contractors that are doing
business with Collier County.
9/28/20109:00:00 AM
Approved By
Joseph Bellone
Manager - Utility Billing & Cust Serv,
Date
Public Utilities Division
Utilities Finance Operations
8/1812010 1 :50 PM
Approved By
Teresa Riesen
Manager ~ Revenue
Date
Public Utilities Division
Utilities Finance Operations
8118120101:57 PM
Approved By
Margie Hapke
Operations Analyst
Date
Public Utilities Division
Public Utilities Division
8118120102:47 PM
Approved By
Pam Callis
Supervisor ~ Revenue
Date
Public Utilities Division
Utilities Finance Operations
8119/2010 11 :07 AM
Approved By
Thomas Wides
Director - Operations Support. PUD
Date
Public Utilities Division
Utilities Finance Operations
81201201011:20 AM
Approved By
Jennifer White
Assistant County Attorney
Date
County Attorney
County Attorney
812012010 3: 15 PM
Approved By
Jeff Klatzkow
County Attorney
Date
8124/201010:39 AM
Approved By
Steve Carnell
Director ~ Purchasing/General Services
Date
Administrative Services
Division
Purchasing & General Services
8127120103:44 PM
Approved By
James W. Delany
Public Utilities DiviSion Administrator
Date
Public Utilities Division
Public Utilities Division
813012010 9:26 AM
Agenda item No. 16C3
September 28, 2010
Page 7 of 7
Approved By
OMS Coordinator
Date
County Manager's Office
Office of Management & Budget
8/30/2010 3:40 PM
Approved By
Randy Greenwald
Office of Management &
Budget
Management/Budget Analyst
Date
Office of Management & Budget
8/30/20104:18 PM
Approved By
Len Golden Price
Administrator - Administrative Services
Date
Administrative Services
Division
Administrative Services Division
9116/20104:22 PM
Approved By
Leo E. Ochs, Jr.
County Manager
Date
County Managers Office
County Managers Office
9/20/201010:14 PM