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City tries to collect $1.6M from delinquent residents

Glendale official calls the system 'haphazard.'

November 24, 2011|By Brittany Levine, brittany.levine@latimes.com

Glendale officials are revamping bill collection efforts, which could mean extra money for the city, but also more dinnertime phone calls for the nearly 3,000 people that haven't made good on their utility bills or fire inspection fees.

The city has an estimated $1.6 million in delinquent accounts at a time when City Hall continues to pinch pennies during the protracted recession.

“We have to maximize our collections,” said Finance Director Bob Elliot, calling the current system “pretty haphazard.”

His department has been working on revamping the system for about a year.

Starting in January, Glendale plans to have all collection activities covered by one agency instead of the current system in which each department handles its own. Putting everything under one roof will allow the city to keep better track of debt collections, said Revenue Manager Armen Harkalyan.

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The change is yet another example of the city consolidating activities to increase efficiency. Last week, Director of Information Services Ed Fraga reported to the Audit Committee that the city had yanked software licensing from individual departments and centralized it under his department to save money and safeguard against possible lawsuits from the likes of Adobe and Microsoft.

Last fiscal year, the Outsource Group, a collection agency that worked with the Fire Department, had less than 5% rate of return on collections — far lower than the typical goal of about 20%.

“We definitely want to collect as much as we can,” Harkalyan said.

The Fire Department reported the most outstanding debts, about $950,000, with Glendale Water & Power coming in second at $236,750 for the last fiscal year, Harkalyan said.

Glendale-based Sequoia Concepts Inc. will be taking over as the city's collection agency. The police and library departments, which deal with unpaid parking tickets and book fines, won't be part of the new system because both recently renewed contracts with other collection agencies.

Sequoia's chief marketing officer, King Bechtal, said that, in general, cities tend to have one collection agency, although some as large as Los Angeles may opt for multiple companies.

Sequoia also works for Los Angeles Department of Water & Power.

“If there's no collection, there's no charge,” Bechtal said. “We're motivated to propagate the payment.”

The city plans to send notices to all delinquent accounts in the next month or so that will give 30 days to pay outstanding debts. If the money doesn't come in, the accounts will be handed over to Sequoia, Harkalyan said, adding that he plans to present an evaluation of the revamp in six months to the City Council.

“This will help us recover that revenue and put it back into the appropriate fund,” Harkalyan said.

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