Thursday, February 2, 2023

CFPUA looking for a debt collection agency to handle about $1.5 million annually

The Cape Fear Public Utility Authority is recommending to its board that a $5 credit be issued to the thousands of residences affected by high fluoride levels. The spike in fluoride levels was caused by a mechanical malfunction. (Port City Daily photo | Benjamin Schachtman)
The Cape Fear Public Utility Authority is looking for a new debt collection agency. (Port City Daily photo | Benjamin Schachtman)

The Cape Fear Public Utility Authority sees over $2 million in unpaid bills annually, some of which is handled by a state program that garnishes tax refunds or lottery winnings

NEW HANOVER COUNTY — The Cape Fear Public Utility Authority and the City of Wilmington are requesting proposals for a commercial debt collection agency to handle overdue accounts on water, sewage, stormwater, and solid waste services.

According to the request for proposals (RFP), CFPUA is looking for a debt collection service to handle an estimated $1.42 million in annual debt (the average amount the authority has sent to collection in recent years). This does not include an additional annual average of $705,000 in debt from residential customers that CFPUA sends to NC Debt Setoff, a state program that garnishes state tax refunds and state lottery winnings and remits funds to agencies like CFPUA.

The proposal would also include collecting debt for City of Wilmington stormwater and solid waste (i.e trash) services. While CFPUA acts as the billing agency for these services, they are provided by the city and CFPUA is not authorized to act as a collection agent for overdue bills.

The debt collection agency would be responsible for debts from approximately 70,000 residential, commercial, and industrial customers, including all those in the City of Wilmington and much of New Hanover County. CFPUA also provides bulk water and wastewater treatment for Wrightsville Beach and wastewater treatment for Pender County (although it is unlikely those governments would fail to pay their bills).

These debts would include accounts with “bad debt balances of $50 or more” that are 120 days or more past due, according to the RFP. For those debts that exceed $3,000, CFPUA would expect a debt collection agency to be “capable of providing legal services” to purse the debts in court.

CFPUA would retain the right to retract accounts from collection or adjust the amount submitted in cases where customers are “entitled to relief under the Authority ordinance such as for a water leak or for billing errors/discrepancies.”

Under a proposed agreement, CFPUA would require debt collection agencies to call and send letters to customers with outstanding debts, as well as to report them to the three major credit reporting agencies (Equifax, Experian, and TransUnion). The debt collector would also handle submitting eligible accounts to NC Debt Setoff, although it would not be able to charge penalties or earn a percentage from funds recovered through the state program.

The debt collector would be required to accept a variety of payments, including through a secure web portal.

The RFP proposes a three-year contract, with the possibility of a two-year extension (CFPUA and City of Wilmington retain the right to terminate the agreement for any reason as long as they provide 30 days notice). The proposed agreement does not include the percentage fees the debt collector would collect, either for standard collections or collections through legal action — these fee rates would be part of the competitiveness of a proposal.

CFPUA is accepting RFPs until May 1.


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