City of Mabel considers utility billing policy change

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At the recommendation of City Clerk Karen Larson and Deputy Clerk Brock Bergey, there was extensive discussion at the Wednesday, Sept. 12, regular Mabel City Council meeting regarding the number of past due utility bills and implementation of possible changes to the current utility ordinance.

Bergey presented a proposal to add a 10 percent late fee for accounts past due on a monthly basis to those residents who do not pay their bills within ten days of their due date.

This proposal was based upon the pattern of delinquent payment practices of between 32 to 40 households for the past five months.  Of the total 449 residential and business customers, the delinquent rate was presented as approximately seven percent of the total average monthly collection of $85,814.29, or $6,133.71. 

It was also reported that there are currently 20 owner-occupied households and 11 renters on the delinquent list, although current practice is to also notify the landlords involved of their tenants’ past-due utility bill status, which also allows for other means of recovery by the city through the tax assessment process.

The number of repeat delinquent accounts was between 75 percent and 90 percent each month, with no monetary consequences currently being assessed.

Adding to the repercussions of the non-payment practices is the cost for additional account management for office staff, estimated to be $218.73 per month, or $2,625 per year. 

The penalty fee would not be put into effect with the goal of making money for the city, but to discourage the current practice of some customers to not prioritize their utility bill payments since there is currently no late charge assessed.

According to Bergey, most other surrounding communities apply a late fee on delinquent accounts, typically at 10 percent, with the exception of Canton, where no fee is currently collected on past-due accounts.

The proposed fee would not take effect until January 2019 if passed and customers would be given notices in their November and December billing statements. 

It was noted that the majority of Mabel utility customers are utilizing the billing auto pay option, which is noted as a means to reduce the payment delinquency for those patrons who simply forget to pay timely.

The current late and disconnect notices were also reviewed along with the reconnection process, which requires a $35 fee for each utility of water and electric services, plus payment in full of all charges outstanding.

Once all factors were discussed, it was decided there will be a special meeting on Wednesday, Oct. 10, at 7 p.m., prior to the regularly scheduled meeting, to present the proposal to the public and allow those attending to comment on the proposal to add the 10 percent late penalty to delinquent customer accounts.

Following the special meeting, it is expected that the proposed ordinance amendment will be addressed as part of the regular meeting agenda.

It was also noted that the proposed recommendation is in compliance with the Minnesota Basic Code of Ordinances and in line with best practices outlined by the League of Minnesota Cities.