A package of tougher enforcement measures will be recommended to the City Council
New Orleans officials expect to decide within two weeks on a package of measures to toughen enforcement of the city's sanitation fee, which thousands of residents fail to pay each month.
The Sewerage & Water Board lists the garbage fee on monthly water and sewer service bills, and collects it for City Hall. "We think the (collection) process right now is not strong enough," Chief Financial Officer Norman Foster told a City Council committee Wednesday. He said the administration expects to recommend new enforcement tools by Oct. 1.
Those measures could include offering a temporary partial amnesty to try to recoup some of the millions of dollars in overdue fees and seeking to change the law to let the Sewerage & Water Board cut off water service to an address that doesn't pay the monthly sanitation fee, which covers most of the city's costs for picking up trash and garbage.
Although the water board collects the fee on behalf of the city as part of the board's monthly bills, it has no authority to turn off the water as long as a customer pays the portion of the bill that goes to the water board itself.
About 85 percent of customers now pay the sanitation fee within 120 days. That's about the same percentage as before the City Council doubled the fee early this year, Foster said.
The charge now is $24 a month for a household and $48 a month for small businesses eligible for city trash collection. Restaurants and bars, other businesses that generate large amounts of trash, and residential properties with five or more units are supposed to contract for private trash pickup.
It's difficult to say exactly how many people are avoiding the fee, however, because the water board's two-decade-old computer system cannot be easily updated to eliminate customers from the list of overdue bills even when officials discover the listing is erroneous or the bill is uncollectable, such as when a customer has died, council members were told.
If and when the board's billing system is updated, Chief Administrative Officer Andy Kopplin said, the number of supposedly delinquent accounts very likely will be significantly reduced.
As of June 30, Sewerage & Water Board records showed the city was owed about $5.5 million for unpaid bills from the past three years, the focus of most collection efforts, and about $3 million for charges older than three years on accounts that are still active.
A 15 percent penalty is added to all bills more than 30 days old.
Water board records show that 611 customers have outstanding sanitation bills exceeding $2,000 each, with about 90 percent of those being residential accounts.
After 120 days, the city turns unpaid bills over to a collection company, Alpat Co., whose strongest weapon is the threat to report the delinquency to credit agencies, meaning a customer's credit rating could be downgraded, Kopplin said. At present, officials said, Alpat has no authority to negotiate partial payment deals with delinquent customers.
The city's 2011 budget originally projected the sanitation fee would bring in $34.95 million this year. That figure has since been reduced to $32.8 million, primarily because the fee increase did not take place in January, as expected. The higher rate instead kicked in a month or two later.
From March through August, the collection rate averaged a little over 85 percent a month, meaning the city is losing close to $500,000 a month in uncollected revenue.
The expected collection total of almost $35 million would cover more than 90 percent of the city's annual expenses for collecting and disposing of trash, taking into account the lower costs the Landrieu administration negotiated with the three companies that pick up the trash and the landfill where they take it. General fund revenue makes up the difference.
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Bruce Eggler can be reached at beggler@timespicayune.com or 504.826.3320.