District staff propose hiring collections firm to recover accounts receivable; board asked for details

District staff presented a proposal on Sept. 16 to enter a professional-services agreement with Valley Collection Services to pursue delinquent, closed accounts. Mike said the district historically has not used a collections vendor and staff identified roughly $102,100 in outstanding balances from customers who left the district with unpaid bills.

Staff said the firm works with several Arizona municipalities; the contract specifies a flat commission on collected debt (transcript references contract language indicating 12.5% of debts collected on a contract page). Mike said staff would generally start submitting accounts that are more than 120 days past due and that very small balances (for example under $20) are unlikely to be submitted because collection fees or staff time would outweigh recovery. He also said accounts existing before the start of the fiscal year (July 1) would generally not be turned over for collections; staff instead has been writing off older small balances.

Board members asked for more detail before proceeding, including the exact percentage the contractor will charge, the total dollar amount and number of households beyond 120 days, and whether the contractor uses a sliding scale by account age. Mike said he could provide those breakdowns and that staff would confirm the contract compensation percentage. There was no formal motion recorded on the record during this presentation.