HomeMy WebLinkAboutCOM 0731.005 2002-2004 JMtr'~~
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Harry Kim Barbara Bell
Mayor - Director
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Nelson Ho
Deputy Director
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DEPARTMENT OF ENVIRONMENTAL MANAGEMENT ~ c~
25 Aupuni S[reet, Room 210 • Hilo, Hawari 96720-4252 i7 ,
(808) 961-8083 • Fax (808) 961-8086 - -
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October 13, 2004
James Arakaki, Chair, and members of the Council
Hawaii County Council ~
25 Aupuni Street ~ n
Hilo, HI 96720
SUBJECT: BILL 312 (Draft 5)
Enclosed is draft 5 of Bill 312 relating to property owners being responsible for sewer bills. Draft 5 makes the
following changes:
1. Section 21-32 (b) Eliminates the penalty for past due accounts, and adds a''/z percent increase in the interest
rate per month, for a total of 1 percent per month.
2. Changes the approval date to October 1, 2005.
Charging the higher interest rate as soon as the account is past due seems to be a much better balance of
providing an incentive to pay on time, or as soon as possible if a customer missed the due date, while still
making it possible for them to keep their account current. More specifically:
• Fairness. A 10% penalty plus interest may be excessive. If someone is one day late they would be charged
the full 10% penalty plus one day's interest. In the past, when the penalty wasn't being imposed until 60
days past due (90 days after billing), the penalty was fair because they had more than ample time to pay, but
of course there was no incentive to pay until nearly 90 days after billing.
• Fairness. The penalty could make it difficult to get a bill to a current status. Since payments are always
applied to the oldest charges, if they get a month behind they will continually get hit with the l0% penalties
and may just get deeper in debt than what they can recover from.
• Incentives. Raising the interest rate to 18% per year, would make it comparable to credit card interest rates
and make the County a less desirable source of financing.
• Consistency. Solid Waste charges 1 '/z percent interest per month with no penalty.
• FRESH. With the current billing system, bi-monthly customers are charged the penalty around 120 days.
The new Utility Billing system in FRESH will help to speed up the collection process.
• FRESH. Conversion to FRESH Utility Billing is expected in April, 2005. Implementation generally hits
some ags. We wo 1 to be sure we are running smoothly before we begin these changes.
Barbara Bell
DIRECTOR
cc: Mayor Harry Kim
WWD 1
enclosure Comm. No. 3~•S
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lJu J ~ Hawai'i County is an equal opportunity provider and employer. R$f. t.`Ot8