The University of Tennessee, Knoxville

Tennessee County Municipal Advisory Service

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Collections

Reference Number: MTAS-1383
Tennessee Code Annotated
Reviewed Date: September 09, 2016
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Normally, cities collect water and sewer billings through walk up/drive up collections or through the mail. These payments usually consist of cash or personal checks. In recent years cities have added alternative payment methods that take advantage of current technologies. Bank drafts, credit cards, and Internet banking are ways to speed collection for the water and sewer fund and provide convenience for the customer.

Cities should establish policies regarding collections of past due payments and bad debts. Generally, a customer will be given a reasonable amount of time to pay the bill without incurring any penalties. For example, a customer’s bill would be mailed to him on the 10th of the month and he would have until the 25th to render payment. If the bill is not paid by the due date, a penalty amount, normally a percentage of the outstanding balance, is added to the customer’s account. If the bill remains unpaid the customer will be notified that payment is past due. Cities sometimes mail a notice that states that the customer’s bill is past due and gives a date by which the bill must be paid before further action, up to and including termination of service, is taken. Care should be taken that customers are informed of their right to dispute the past due amount. Any disputes should be handled before a service is terminated. This will save the city legal problems and perhaps public embarrassment.

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