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Toledo City Council vote is sought on utility-bill collection


APRIL 13, 2010

Toledo City Council vote is sought on utility-bill collection
Law would let firms try to obtain $18.7M owed

The following article appeared April 13, 2010 in The Toledo Blade. ABLE Attorney Toby Fey is quoted in the article. Read below, or view on The Blade's Web site.

By TOM TROY

Mayor Mike Bell's administration soon may put more collection firms to work to collect $18.7 million in delinquent water and sewer bills under an ordinance that could be voted out of a City Council committee Tuesday.

Councilman Joe McNamara said yesterday he will seek a vote on a measure held up since last year over concerns the collection agencies might use abusive practices to collect unpaid utility bills.
 

APRIL 13, 2010

Toledo City Council vote is sought on utility-bill collection
Law would let firms try to obtain $18.7M owed

The following article appeared April 13, 2010 in The Toledo Blade. ABLE Attorney Toby Fey is quoted in the article. Read below, or view on The Blade's Web site.

By TOM TROY

Mayor Mike Bell's administration soon may put more collection firms to work to collect $18.7 million in delinquent water and sewer bills under an ordinance that could be voted out of a City Council committee Tuesday.

Councilman Joe McNamara said yesterday he will seek a vote on a measure held up since last year over concerns the collection agencies might use abusive practices to collect unpaid utility bills.

The ordinance allows the city to contract with three collection agencies. The amendment limits fees to 20 percent of the debt and requires the agencies to comply with federal laws prohibiting abusive practices.

Mr. McNamara said the ordinance was held up in a council committee because of concerns from Advocates for Basic Legal Equality Inc., a partially federally funded law firm that represents low-income people in civil matters.

"The proposed amendment is the right balance between consumer protection and collecting delinquent water bills," Mr. McNamara said.

Toby Fey, a staff attorney for ABLE, said he raised concerns that the city's debt collectors would be immune from the federal Fair Debt Collection Practices Act.

He said the legislation makes Toledo City Council, rather than the city's water department, responsible for setting the fee and for ensuring the city's bill collectors follow the federal law.

"It's probably not adding new protection that isn't there, but it's adding explicit protection," Mr. Fey said.

Practices banned by the law include charging excessive fees, making phone calls at all hours of the night, making threats, using obscene language, and attempting to embarrass debtors in front of family and friends, Mr. McNamara said.

Tom Crothers, director of the Department of Public Utilities, said the delay did not prevent the city from going after utility scofflaws because the city already has one collection agency as well as its own staff working on unpaid bills.

"We have plenty of accounts receivable to occupy our time. Having another tool here to do it will be helpful," he said.

About $13.3 million in city utility billings are more than 30 days overdue; an additional $5.4 million in billings are less than 30 days overdue. A whopping $8.4 million in utility billings are more than a year old.

Mr. Crothers said the city has a duty to all its ratepayers to collect on delinquent accounts.

Utility funds cannot be used to pay for general fund expenses such as police, fire, and trash collection, but the general fund charges the utility funds a 10 percent administrative fee.

The city put the collection effort out for bids in October and has recommended three law firms as finalists: Scheer, Green and Burke Co., LPA; George Gusses, Co., LPA, and Porz and Porz, Attorneys at Law.