NEW ULM - The Park and Recreation Department is considering changes to its debt policy due to customers with unpaid debt or returned payments causing revenue loss and problems for the department.
Preliminary ideas for policy changes were presented to the New Ulm Park and Recreation Commission on Monday. The final version of the changes will be presented to the Commission next month.
The changes largely stick to current policies, but they will put the policies officially into the City code and provide a clear process for dealing with the problems.
The debt policy changes will require payments in full for memberships by adding them to the customer's account, after the second incident of a returned ACH payment. If the new total owed on the account is not paid within 30 days, the customer's membership will be cancelled.
Customers with a history of bad debt or returned payments will be required to make a deposit of three months fees when signing up for a new membership, and the membership must be signed during regular business hours in the main Park and Recreation Administration office. If the customer completes nine months of payments with a returned ACH payment, the deposit will be added to the account to pay off the rest of the year's membership, instead of being deposited after the year ends.
Finally, all debt owed to the City would be required to be paid before additional registrations or payments would be accepted by the Park and Recreation Department.
The policy changes were prompted by numerous bounced payments, failures to pay debt and attempts to obtain new memberships or programs even though debt remained on the current account. The Department loses revenues when it is forced to assign its employees to recover the debt. Additionally, the Department can only recapture up to 60 percent of the debts that go to a collection agency. Three to four incidents of bad debt or bounced payments occur each month, typically in the $25 to $50 range.
The Department will tweak its proposal in the coming month to improves its compatibility with how it runs its facilities. The finalized proposal will be presented in July.
(Josh Moniz can be e-mailed at firstname.lastname@example.org)