Simi Enlists Help to Collect Overdue Debts

Faced with uncollected bills of more than $240,000, the city of Simi Valley has decided to follow the lead of several other Ventura County cities and hire a collection agency.

“It’s time to turn it over to the pros,” Simi Valley Mayor Greg Stratton said.

The pros in this case are the Credit Bureau of Santa Monica Bay District Inc., which has entered into a two-year contract with the city to try to recoup the outstanding debts.

Under an agreement approved by the City Council on Monday, the agency will receive 33 1/3% of all the money it collects.

The city had previously written off the $162,567 in uncollected water bills and $73,618 in unpaid fines and service fees that have accumulated during the past six years. The city’s total budget for this year is $26.8 million.

But tight budgets and the overall economic slump have officials striving to come up with ways to reduce the city’s revenue losses. And that includes putting the squeeze on those who refuse to pay their bills.

“I think our staff has shown that this is a continuing problem,” Stratton said. “So we’re going to see what we can get back. It’s better to get something . . . than nothing.”

LaVonne Connor, general manager of the collection agency, said her firm uses a nationwide credit information service to track down people who have moved without paying their debts. Connor said when a debtor applies for credit anywhere in the country, the collection agency is notified.

Once the person is found, Connor said her agency will first send a letter, then follow up with a telephone call about the unpaid bill.

Debtors are warned that if their bills are not paid the agency will pass along the information to the appropriate credit reporting companies.

The cities of Ventura, Oxnard and Camarillo have used collection agencies for several years to tap those people who have refused to pay everything from water and trash fees to money owed for damaged property.

The cities of Ventura and Oxnard both use the Accounts Adjustment Bureau, an Oxnard-based collection agency. The city of Camarillo uses three different collection agencies but is considering phasing out one of them.

Anita Bingham, Camarillo’s director of finance, said it is cheaper to use different agencies rather than just one.

One agency wants 50% of the amount it collects to help cover expenses incurred in tracking down someone who may have left the state. Another agency charges a flat rate of $7 for each account it handles, whether it is successful or not in collecting the debt.

Bingham said most of Camarillo’s outstanding debts center on unpaid trash fees. She said that although the city has used collection agencies for more than five years, it still writes off about $5,000 to $10,000 a year in unpaid bills. But Bingham said this is not considered a significant loss. The city’s budget for the current year is $22.6 million.

Everette Garmon, Ventura’s finance director, said more than half of the accounts turned over to its collection agency are ultimately paid off. He said the agency gets 50% of the money it collects.

“We’ve been happy with the service they have provided,” he said.

Nick Matthews, a manager with the collection agency that serves Ventura, said it is generally easier to collect debts for cities than for private businesses. The reason, he said, is that cities have a wealth of background information that can be used to track people down if they have moved.

Matthews said it is cheaper and faster if the agency can locate someone on its own rather than using a credit information service.

Often, he said, debtors are unable to pay what they owe and a compromise is negotiated. He said that if a debtor leaves the state there is not much the city or the agency pursuing the person can do besides pass the information along to a credit reporting company.