Minnesota Cities Magazine
More from May-Jun 2016 issue

Two-Way Street: How Does Your City Handle Delinquent Utility Payments?

Jane Blank, city clerk-treasurer, Beaver CreekJANE BLANK, MCMC
City Clerk-Treasurer
Beaver Creek
The City of Beaver Creek (population 298) has 129 utility billing accounts, including business and residential. I have had a process to ensure water bills are paid on time, and to handle those not paid on time, since I became city clerk-treasurer in 2004.

Written policy needed
Some of the steps of our billing policy (late fees, meter reading months, disconnection process) are listed in our ordinances, but an actual policy of when charges are placed on the account was not in the ordinances—until recently.

I felt it was important to establish a written process in our ordinance for a couple of different reasons. First, it is reviewable by anyone (residents, business owners, councilmembers, etc.). Second, it gives guidelines for all city staff to ensure all accounts are treated the same. Third, during staff turnover, there is a policy in place that is easy to under-stand and implement.

Therefore, I brought the policy to the City Council in writing in March, and they approved it, so now everything is documented.

Meter reading and billing process
Our water bills are sent out monthly, and the meters are read in March, June, September, and December. Each account is allowed a minimum amount of water usage per quarter and if the usage exceeds that allowance, an overage is charged on the bills that go out after the quarterly readings.

All bills are mailed on the first business day of the month and are due 15 days later. Bills become delinquent if they have not been paid by the due date and a $10 late fee is assessed.

Handling delinquent bills
If the bill remains unpaid by the due date of the following month, an additional $10 late fee is assessed. Approximately 10 days before the end of the month, a delinquent notice is sent and 10 days are given to pay the past due balance.

If the bill is still unpaid and no payment plan has been established, a notice is placed on the resident/business door giving five days to pay in full or the service will be disconnected. We charge $25 to re-establish service from April through October and $40 from November through March. That amount must be paid prior to re-establishing service.

We communicate this information, so there are no surprises. These processes have helped us to keep our delinquent accounts at a low and manageable number.

Ann Kiser, city clerk-treasurer, UnderwoodANN KISER
City Clerk
Underwood
Living and working in a small community has its good and not so good points. One of the not so good is when someone doesn’t pay his or her utility bill. In Underwood (population 341), we have a large number of retired people and many on fixed incomes. When something happens (leaking toilet, for example), the cost can become a burden for them.

Billing and collection process
We have 169 residential water accounts and 20 commercial accounts. Meter readings are checked the last week of the month. Residents are then billed on or about the last day of the month, and bills are due on the 15th of the month. They are considered late if not paid by the 20th.

If someone hasn’t paid the bill, the next bill is stamped “Past Due.” If the bill hasn’t been paid for a second month, there is a $10 late fee added. If not paid by the 20th, I send disconnect notices, giving five to seven days. If still no response, we put a message on the customer’s door and give 24 hours before we shut off the water. There is a $30 reconnect fee.

Making it easier for residents
In 2006, we started offering a direct pay option, and we now have more than 20 accounts taking advantage of this. In 2009, we started offering people payment plan options. This works well for those who have had a misfortune in their life and who have fallen behind.

For a payment plan, we average the customer’s usage and cost for six to 12 months to come up with an amount to be paid for a specific period of time, once or twice a month, whichever fits better for the resident. A number of delinquent accounts have been nearly or completely caught up through this approach, saving the resident undue financial hardship, eliminating utility certifications, and saving time and money for the city.

Our utility billing program also allows for debit and credit card payments. There is a processing fee for this, but for some property owners who live out of town, this works well.

Maintaining good will
Small cities have the same obligations as larger ones, and we have to accomplish this with less income. Working with residents helps everyone. In a smaller community, good will means a lot.

Read the May-June 2016 issue of Minnesota Cities magazine.

* By posting you are agreeing to the LMC Comment Policy.