City to pump up penalties

By Scott Levine
Associate Editor

November 19, 2008 11:54 am

— CLINTON — Residents who turn sewer bill payments in late may see a substantial change to penalties.
The Clinton Internal Operations Committee moved Tuesday to change the one-time 10 percent penalty for late sewer bill payments to 1.5 percent compounded each month. Pending a billing software capability review, discussion to formally change the penalty will occur at the City Council Committee of the Whole meeting on Tuesday.
At-large councilman Mark Vulich said the amended penalty will lessen the burden on citizens who may forget a payment.
“I would like to see people get not nicked as much if they’re a couple of weeks late,” Vulich said. “But if you let it sit for months, then this will come back and hurt you.”
Currently, a 10 percent penalty will incur on each delinquent bill and won’t compound, no matter how long the bill goes unpaid. The new system calls for a 1.5 percent penalty compounded monthly, making a $100 bill increase $1.50 after one month, approximately $4.57 by the time the next bill is due in three months, approximately $9.34 in six months and approximately $19.55 in one year.
“In terms of trying to get the money, right now you’re penalizing people more heavily for not paying their bill for one or two weeks, than the ones who ignore it for six months,” Ward 2 councilman Mark Kearney said.
City finance director Deb Neels said pursuing $2.5 million in unpaid sewer bills, with $1.2 million in delinquent payments, is the city of Clinton’s main priority. The amount of late payments have increased since the council approved a five-year sewer rate hike, Neels said.
Since sewer bills are billed quarterly (every three months) a notice is issued to citizens when their next payment is due. If the bill is not paid, Neels said the city will pursue a lien against the owner’s property. The city will file for a lien and send a 30-day notice to the owner six months after the payment was due. If the payment is not paid, the lien will go into effect during the next tax year.
The city of Clinton must do a separate filing for each lien against late payments. Neels mentioned one property escalated to $32,000 in total sewer bills with a 10 percent penalty attached to each delinquent bill.
“The probability of collection is higher in the future with a lien,” Neels said. “They must pay taxes or else it goes through another process.”
Issues discussed as a possible deterrent to late payments were to increase the amount of time to pay a bill and change the billing structure from quarterly to monthly.
Currently, bills must be paid within 20 days of being processed. Vulich said this is a concern because mail may not reach each resident at the same time.
Vulich mentioned his sewer bill was postmarked for a Thursday and he didn’t receive it until the next Friday, giving him a little more than 10 days to return the bill.
Before changing the time period of paying sewer bills, City Administrator Gary Boden said to wait and talk to with the post office about why citizens may receive their bills at different intervals.
Also, the IOC directed Neels to test the software capabilities in giving citizens a choice between quarterly and monthly billing. Neels said anyone can call the office requesting a payment plan.
In order to join the plan, residents must sign an agreement to pay the bill off in a specific time period. Out of the 30 who currently utilize this system, 15 of them have stopped paying.
“I hear from a lot of seniors and they never prepare for the bill every three months,” Ward 1 councilman Bob Soesbe said. “They don’t put aside $50 each month, and then they get a bill for $150. They’re in trouble then, and it’s a choice between groceries or paying a sewer bill.”
Neels said residents can send checks voluntarily to the city each month toward the sewer bill, but Vulich said the city cannot expect the majority of citizens to remember to pay without a reminder, such as a monthly bill.
The city does service select customers with monthly statements, but cannot feasibly register water readings for each home in Clinton, Neels said. In the case of a monthly budget billing, the costs would be estimated, something mayor Rodger Holm said could be dangerous.
In other IOC news, the group directed the used vehicle bid process to be tabled for the committee of the whole meeting on Tuesday. The IOC developed a process that will create a need-based specification model, instead of dictating what model, color or other specific entities. The process will also send notification to each car dealer in the area when the city desires a vehicle.