Tonight at City Council, a new ordinance was approved that will add a 30% late charge fee onto uncollected bills that are passed along to collection agencies. Currently, when bills are sent to a collection agency, the agencies receive 30% of the collected amount as a fee. The new procedure essentially passes the cost of the collection agency onto the consumer so that the city can now collect 100% of the money they are owed. This is expected to save the city an additional $300,000 per year.
If you’ve got outstanding bills owed to the City of Columbus, you have until April 1st to get them paid before the new late charge fee takes effect.
Press Release:
PALEY SEEKING TO IMPROVE DEBT COLLECTION PROCEDURES(COLUMBUS)—In an effort to promote cost-saving measures, Councilmember Eileen Y. Paley is sponsoring legislation this evening to create an administrative fee for the collection of delinquent payments. The fee will cover the cost of services of private collection agencies hired by the city.
“Columbus taxpayers should not be paying for the city to collect money we are owed,” said Councilmember Paley, who chairs the Judiciary and Court Administration Committee. “The people who are not paying their taxes, fees and fines directly to the city are forcing us to go to outside agencies in the first place, so it should be the ones using the service who are paying for it.”
The city currently contracts with two collection agencies, Capital Recovery System, Inc. and Linebarger, Goggan, Blair & Sampson LLP, and pays the two firms 30% of every collection. That fee will now be paid by the consumer, allowing the city to collect 100% of the money it is owed. According to data from City Attorney Richard C. Pfeiffer’s office, the new formula would have saved $313,850.99 in 2008. If approved by City Council, the new collection fee formula will go in to effect April 1, 2009, giving those who have outstanding debt a grace period to pay their bill without incurring the additional fee.