DEPARTMENT OF PUBLIC WORKS: PURSUE QUARTERLY BILLING OPTIONS
The City’s practice of billing water charges on a quarterly basis limits its ability to maximize interest earnings through effective cash flow management and could be a contributing factor to customer delinquency rates.
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In FY2000, the City approved plans for a 19 percent water rate increase and a 15 percent sewer rate increase. It is projected that these increases will result in the average Baltimore water user paying over $115 per quarter in water and sewer charges.
Most citizens pay their household bills on a monthly basis. By allowing billing charges to accumulate for a three-month period, some customers receive a bill that might be more easily managed on a monthly installment as opposed to an accumulated lump sum. Additionally, the monthly payment of charges would allow the City to increase annual interest earnings.
In FY93, the City of Philadelphia’s Water Department moved from quarterly to monthly billing. Within one fiscal year its collection rate increase by over 6 percent.