Heads should be rolling in the city’s utility billing department following Sunday’s Journal-World story about problems with late charges and how they are hidden on city water bills.
The situation came to light when a Lawrence resident got curious about a charge listed on her bill as an “adjustment.” It was a small charge, only about a dollar a month, but she wanted to know what it was for.
Come to find out, the “adjustment” actually was a late fee — a late fee that was charged to the customer despite the fact that both she and her bank say the electronic payment was sent in time to avoid such a fee.
The first problem here is related to transparency. When asked about the “adjustment,” City Finance Director Ed Mullins was unconcerned. Maybe that isn’t the best word to use, he said, but “I think it is pretty clear to most people that it is a late fee.”
Wrong. A late fee, usually, is called a “late fee.” Many utility bills include various adjustments and fees that are tacked on for legitimate reasons, but a late payment fee should be — and usually is — clearly identified. There is no reason for someone who thinks they paid their bill on time to assume that the “adjustment” on their next bill is related to a late payment.
City officials say they can’t change the wording without reprogramming their billing system and they can’t reprogram that system because they don’t own it. This situation has existed for some time, they think it will be most of a year before there is any chance of it being corrected. This is simply not acceptable.
The other issue is the high number of late fees being charged to Lawrence utility customers. The utility billing division determined that about 30 percent of its bills have late fees attached, which is two to three times what other utilities experience.
Sunday’s story seems to indicate that there may be some problems in the system for handling electronic payments for utility bills. Many utility customers schedule electronic payments as close as they can to the due dates to manage their cash flow or maximize the interest they earn on their money.
In the case the story examined, both the customer and her bank were adamant that the payments were sent in time, but the city was equally adamant that the payment was received late. The city owes it to its customers to launch a thorough audit of how electronic payments are received and posted. If the city needs to provide more and better information to bill payers or their banks, it should do that. If the city needs to alter its own system for handling those payments, it should do that, too.
The high percentage of late fees being charged on city bills shouldn’t go unexamined. Mullins seemed unwilling to accept any responsibility for the problems and instead suggested that perhaps if the city charged higher late fees, more people would pay their bills on time.
Let us suggest that before taking such action the city needs to make sure its own house is in order. It needs to expedite whatever changes are needed for a late fee to be clearly identified on bills, and it needs to work with customers, banks and its own staff to make sure that late fees are charged in a fair and accurate manner.