What Happened?
A simple step taken by a compliance manager in Ocala, Florida, has generated over $160,000 in old utility debt for the city, and has transformed perceptions and accountability along the way.
The BackStory
The issue at hand relates to property code enforcement and unpaid utility bills. Two key points set the stage for Ocala’s innovation.
First, in Ocala—as in most cities—property owners are responsible for correcting code violations. When they fail to do so, and/or if the city subsequently corrects the violation, the related costs and penalties can be placed as a lien on the property.
The second matter is related to utility bills. Obviously, citizens are required to pay all of their utility bills. If they do not, then a debt collection agency is charged with acquiring the unpaid debt. If the collection agency is unsuccessful, then—at some point—the city writes off the debt.
The Innovation
Connecting the dots between those two seemingly unrelated matters was the brainchild of Chip Rich, who is the Code Compliance Manager for the city of Ocala. In that role, he is responsible for overseeing day-to-day operations related to both code enforcement and parking enforcement.
According to Ocala’s PR manager Jeannine Robbins, Mr. Rich recognized that under city code and Florida law code enforcement, liens are “cross-attaching.” That means that when a property owner sells any property, they are required to pay off the lien.
Mr. Rich’s innovation was to institute a process that simultaneously checks for old utility debt that may have been written off by the city. This seems basic and logical, but experts tell Gov1 that cross-indexing debt—especially debt that may have already been written off by a municipality—is rarely instituted, but could be an easy source of lost revenue.
Benefits & Action Items
According to Ms. Robbins at Ocala, the city has collected more than $160,000 in old utility debt through this process. For his efforts, Mr. Rich was recently recognized at a City Council meeting.
Robbins tells Gov1 that the city collected that $160,000 in two ways. First, the city has collected bad debt that had already been written off. Second, Mr. Rich’s efforts have resulted in the collection of outstanding debts before they were written off. “The bottom line is that when someone is selling a property, we are now increasing the possibility of collecting on debts owed,” notes Robbins. “Before, they were simply written off, since the collection agency doesn’t have the same access to information or tools available.”
Robbins notes that “many municipalities do not go through this effort.” As a result, it can “help reduce the likelihood that other rate payers and citizens will have to make up for those that do not pay their debts.”
For details on Mr. Rich’s innovation, feel free to contact him directly via email.