Village makes cost-saving move to switch utility bill collections; now in residents’ property tax bill

A dramatic change is coming to how solid waste fees and stormwater utility fees are collected in Key Biscayne. The fees will remain at the same rates, but new annual collection methods are expected to save the village money and staff time, and prevent unpaid fees from again ballooning up to $500,000.

The village council on Nov. 17 adopted two proposed ordinances related to collection, using the Uniform Tax Collection Method -- one for solid waste billing and one for stormwater fees.

“This is simply a change in the method we bill and collect solid waste and stormwater fees,” said Village Manager Andrea Agha. “This is not a new fee or tax, it is an enhanced collection mechanism.’’

For solid waste services, the village has been using a direct billing system, with village staff processing the billing for Solid Waste, Recycling, and Bulk Trash pick-up. Unfortunately, the collection rate of those fees had fallen to less than 60 percent. As of Sept. 30, 2019, the outstanding balance, which is subject to interest, penalties and liens, had grown to more than $500,000, said village chief financial officer Benjamin Nussbaum.

Since that time, village staff has focused more on collections for the 2020 fiscal year, adjusting all delinquent accounts for interest and penalties. As a result, a year after a 60 percent collection rate, they are now collecting 77 percent, “and we are continuing to pursue payment of any outstanding balances,’’ he said.

The change to the Uniform Tax Collection Method will do away with a cumbersome process by having solid waste billing included in the annual property tax bill. This should “improve the collection rate, increase efficiency, and (be) more cost-effective,” according to a memorandum to council from Agha.

Historically, village staff manually reconciled changes in the Miami-Dade County Property Appraiser’s records with the village’s billing system for each property. The internal billing system also has lacked the ability to automatically accrue interest and penalty charges, per Village Code.

Nussbaum said that many property owners had apparently believed that garbage and recycling services were already paid for through their tax bill.

Another issue contributing to the problem is that village staff manually prints and mails invoices, collects payments in person, and provides customer service, he said.

“Changing the method will free up this internal administrative time, reduce errors or omissions, and provide for a more robust accounting procedure that will be institutionalized for the village,’’ Agha said.

In a similar, but separate, effort regarding stormwater utility fees, the council on Nov. 17 approved an ordinance to change Storm Water Utility Fee collections, which had been using Miami-Dade County Water & Sewer Department (WASD) as the billing agent.

Under the current system, condominium associations are billed for stormwater utility services monthly. Under the new system, condo owners will see the charge on their annual tax bill. Single-family home owners currently receive the storm water bills quarterly. Under the new system, the charges will come in their annual tax bill.

With the change,said Nussbaum, the village will receive the fees at the beginning of the fiscal year rather than periodically throughout the year. This is expected to improve the Village's cash flows, investment income, and ability to service the outstanding debt in the Stormwater Enterprise Fund. It will provide consistent and measurable collateral in securing new debt to fund the infrastructure improvements included in the Stormwater Master Plan, he said.

By moving both the solid waste and stormwater fees to the annual tax bill, the village “can streamline the payment process for residents and ensure timely collection,” Nussbaum said. “We expect this shift in billing to generate an approximately 98% collection rate.’’

Second and final reading of the ordinances will be held Dec. 8. Residents can expect to see the change on their tax bills received in November of 2021.

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