A city in Kansas has hired collection agency Credit Bureau of Kansas to help collect $86,000 in overdue utility bills.
An estimated 150 customers have overdue bills and will receive letters informing them that they have one more chance to pay before their accounts are forwarded to the collection agency, city officials said.
City Financial Director Brad Smith said the city hasn't made a serious effort to collect on the overdue accounts in the past five years, leading to a delinquency total that's higher than it otherwise would be. With the collection agency on board, the goal is to stay on top of overdue accounts and not let the total grow as it has in recent years, Smith said.
Collection Bureau of Kansas will charge the city 25% of all money collected through standard methods and 30% of money collected through court action, Smith said.
Baldwin City will not be obligated to turn over any account to the collection agency, Smith said. Often, accounts given to an agency are expected to be those of customers who have moved from the area.
The collection agency would go after the largest delinquencies first, he said. There are a number of closed businesses that owe between $1,500 and $2,000.
To put the overall delinquency total in perspective, the city bills an average of $560,000 a month for electricity, water, sewer and trash.
Like many Kansas municipalities, Baldwin City makes use of the Kansas Setoff Program where the state makes available to creditors tax returns and other money that it would otherwise pay debtors. The city has received $4,670 from the program this year, Smith said.
But the downside is the fee the state charges for collections. Baldwin City is far down the list of creditors slated to receive payments from debtors, he said.