5.2 ERMUSR 02-13-20244r,;.Z,
Elk Riv
Municipal Utilities UTILITIES COMMISSION MEETING
TO:
FROM:
ERMU Commission
Melissa Karpinski — Finance Manager
MEETING DATE:
AGENDA ITEM NUMBER:
February 13, 2024
5.2
SUBJECT:
2023 Fourth Quarter Delinquent Items
ACTION REQUESTED:
Approve the 2023 fourth quarter delinquent items submitted.
BACKGROUND:
Fourth quarter delinquent items are presented for your review. We have previously reported
on four different categories of delinquents as follows:
• Assessments are delays in collecting the money owed, which is assessed to the
property taxes in the fall. Please note this number will only be presented in the fourth
quarter.
• Collections amounts are those we send to the collection agency to try and collect
after we have exhausted all our internal collection efforts. We receive 70% of
amounts collected after the agency receives their split.
• Revenue Recapture (RR) is the program through the state where funds are collected
from individuals' tax refunds and remitted to us, with the balance (if any) remitted
to the individual. It presents an opportunity to collect funds rather than splitting
with a collection agency or having to write them off completely. There is a six -year
limit for keeping items on RR and if uncollected at this time, amounts are removed
and written off.
• Write Offs are amounts removed from the books with no further collection efforts
being extended.
DISCUSSION:
I have for review recap comparisons with last year, identifying the categories and amounts for
each quarter and the running totals. Regarding the year end totals:
• The amounts listed for assessments culminate in the fourth quarter and include items
previously submitted to other collection services, and if not collected, are removed and
assessed. The assessment amount for 2023 is $10,994.99. This is around average
compared to the last few years.
• The amounts submitted only to Collection Agencies for 2023 is $985.14. (Please note
that amounts submitted to Revenue Recapture were also submitted to Collection
Agencies.)
Page 1of2
115
• The amounts submitted to Revenue Recapture were less than the prior year. The 2023
RR amount is $30,906.95. We have collected a total of $14,916.66 from RR in 2023.
• Write Offs for 2023 of $30,876.42 are higher than the prior year. The biggest impact to
the Write Offs is due to the removal of items from the RR program due to a six -year limit
mandated by the state. We have had to remove, and write off, a total of $27,204.12 due
to six -year statute of limitation in 2023.
The attached report listing shows those dollars submitted to both the Collection Agency and RR.
The fourth quarter totals are $13,318.47. To break these totals down by provider, it is
$11,296.31 for Electric, $721.49 for Franchise Fees, $580.19 for Sewer, $402.27 for Water,
$236.84 for Trash, and $81.37 for Storm Water.
The amount for fourth quarter Write Offs is $5,222.43 which includes: amounts removed from
RR meeting the six -year limit with the state program of $4,248.64, and bankruptcy of $883.04,
and small balances of $90.75.
Our allowance for doubtful accounts (a reserve for bad debt/write offs) is $25,605 or .05%
uncollectible accounts per revenue dollar. According to the American Public Power
Association's most recent published standard ratios (2021), the industry standard is between
.15% and 1.49%. Interestingly, the Northern/Central Plains average is .15%. Our totals for the
year are below the national average, at .06%.
ATTACHMENTS:
• 2023 Fourth Quarter Delinquent Items Comparison
• 2023 Fourth Quarter Delinquent Items Submitted
Page 2of2
116