City of Melville could cease collecting interest on late underground power charges

City of Melville could cease collecting interest on late underground power charges

CITY of Melville could cease collecting interest on late underground power charges and refund ratepayers what it has pocketed so far.

Western Power is set to commence two underground power projects – Melville North and Alfred Cove East – in May, 2018.

The utility’s plan is to remove existing overhead infrastructure for 1878 customers before converting their homes to the underground network by mid-2019.

Half of the cost will be paid by property owners in both project areas through an underground power charge included on rates notices, with the remainder picked up by the State Government and Western Power.

In a report presented to councillors at a briefing session last Tuesday, financial services manager Bruce Taylor recommended the 4 per cent interest collected on late payments not be applied for 2017-18 because the money was not yet required.

“At the time of the adoption of the 2017-18 budget, the cash call schedules detailing the City’s financial obligations to Western Power were not, and are still not, available from Western Power,” he said.

“This has created a situation where underground power charges outstanding as of August 28 will attract interest, even though the City is not required to pay the first cash call to Western Power until later in the financial year.

“Any delay to the project may see the first cash call being delayed until early in the 2018-19 financial year.”

He said it was not appropriate for “interest to be charged on outstanding underground power charges when the City is not required to remit those funds until a later date”.

Mr Taylor said ratepayers in the project area who elected to pay in instalments would have also incurred interest on their charges.

“The total amount that relates to charges levied for these projects is $8800. These charges will be reversed if the council resolves to not apply the late penalty interest,” he said.

“To date, $954,000 has been received in charges for the two projects and the City is expected to have sufficient funds on hand to meet the first cash call contribution.”

Melville chief executive Shayne Silcox said any paid interest could be credited against future rates assessment accounts or refunded.

Mr Taylor recommended interest on outstanding charges for the projects be applied as part of the 2018-19 budget adoption process.

The City will vote on his recommendation on November 21.

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