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More leniency in borough electric bills? Council discusses extending time to pay, reducing late fee

By Dan Miller

danmiller@pressandjournal.com

717-944-4628
Posted 8/1/18

Middletown Borough Council is considering whether to give people more time to pay their electric bill, and also whether to reduce the late fee that customers must now pay when their bill is …

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More leniency in borough electric bills? Council discusses extending time to pay, reducing late fee

electricity
electricity
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Middletown Borough Council is considering whether to give people more time to pay their electric bill, and also whether to reduce the late fee that customers must now pay when their bill is overdue.

Council discussed the matter at length during its July 17 meeting.

No changes were made, but council again will discuss the subject of electric billing policies and procedures during its Aug. 21 work session, borough Finance Director Kevin Zartman told the Press & Journal in an email.

The changes are sought by Council Vice President Dawn Knull, who wants to give a break to borough residents being hammered by rising water and sewer bills. An 11.5 percent surcharge was already added to the bills of Middletown customers by Suez in April.

Starting in 2019, Suez can begin adding annual rate increases under terms of the 50-year lease of the borough water and sewer systems to Suez that council and the former authority approved in 2014. The lease went into effect on Jan. 1, 2015.

Borough staff at Knull’s urging came up with recommendations to address her concerns regarding late electric bills. Staff presented the recommendations during the July 17 meeting.

Among changes Zartman said the borough can implement would be giving residents an additional week to pay their monthly electric bill before it becomes late.

“Right now … we give our residents 14 days to pay. We had talked about extending that out to 21 days, and late fees only being posted at day 22, as opposed to now late fees are posted at day 15,” Zartman told council.

The borough also could reduce the late fee charge from 10 percent to 5 percent. The late fee percentage is applied to the current past due amount.

But cutting the late fee in half would cost the borough about $90,000 in annual revenue, Zartman said, based on the borough getting about $180,000 in late fees over a year.

Earlier in the meeting, Zartman said the borough soon will be making it possible for residents to pay their electric bill online by credit card.

Councilor Ian Reddinger suggested this will increase electric revenue, by making it easier for residents to pay their bill on time.

Reddinger urged council not make any other changes until the borough can see the result of putting the online credit card system in place.

“Maybe instead of jumping the gun and changing days, let’s implement the credit card” system and “see where we are at,” he said.

Knull disagreed, saying residents need help now.

“We as a council were put here to help these residents,” Knull said. “I’m saying decrease (the late fee) and give them 22 days and see where it goes, because if you don’t and we keep increasing these water and sewer rates — they’re gone, they’re out of here, and then what do you have?”

“You have nobody to play in your Kids Kastle, you have nobody to play in the pool, you have nobody to look at the Christmas lights, because they are all gone. You can make up (the $90,000) with the fees that you are getting for the people to sit outside. You can increase your fines. You’ve got to look at these residents first and nobody is. You’re looking at the bottom line of $90,000 that you are losing — what about the residents who are posting online that they can’t afford their bills?’’

Councilor Angela Lloyd agreed with Knull, especially on giving residents more time to pay their electric bill.

“People are getting their water bill, their electric bill, their mortgage — my car payment is due the first of the month as well. It’s a lot at one time,” Lloyd said. “You’re giving people 21 days to spread it out a little bit so they are not getting hit all at one time.”

Zartman said he is seeing more Middletown residents having trouble paying their bills this year than last year.

“That tells me something. The economy is getting better, but I’m talking to more people having trouble,” Zartman said.

And while he expects the online credit card feature to be “a great benefit to those folks who have a credit card,” Zartman said many of the people he sees having trouble paying their electric bill don’t have a credit card.

“So many of our residents, they come in with a money order … because they don’t have a credit card,” Zartman said. “For the people who don’t have a credit card they’ll say, ‘Big deal … what did you do for me?’”

Mayor James H. Curry III suggested a compromise. He proposed giving residents the added week to pay their bill before it becomes late, but to keep the late fee at 10 percent until any impact of the credit card change is seen.

“Then if (residents) are still totally strapped and it doesn’t work, we can go back and change (the late fee) to 5 percent,” Curry said. “I’m trying to find the middle ground and if the middle ground doesn’t work we can easily revisit the percentage.”

Council did not act on any of the proposals at its July 17 meeting.

Middletown is among 35 boroughs in Pennsylvania that provides electricity to their residents and businesses. Sometime this fall, these boroughs will be looking at coming up with more consistent policies and procedures regarding billing practices, borough Manager Ken Klinepeter told council.

He suggested council may want to wait to see the outcome of that process before Middletown makes any changes on its own.