Billing bunk

The whole system of late fees on Lawrence utility bills demands a full review.

February 1, 2011


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.


jackpot 7 years, 3 months ago

I use EFT the City pulls the funds from my account on the due date if they don't it's out of my control. The city has not made any "adjustments" on my bill.

SnakeFist 7 years, 3 months ago

The reason Lawrence has such a high number of late payments is obviously because people, not seeing a clearly labeled "late fee", didn't realize their payments were late. I expect a class action lawsuit to recover money stolen by the utility over many years, and I hope Mullins is fired for his blase attitude.

nut_case 7 years, 3 months ago

"I expect a class action lawsuit to recover money stolen by the utility over many years..."

I would certainly hope so.

ralphralph 7 years, 3 months ago

“I think it is pretty clear to most people that Mullins is dishonest and incompetent."

Boston_Corbett 7 years, 3 months ago

A stupid statement was indeed made. But "dishonest" is not an appropriate word, even for ralphralph.

Georgine McHenry 7 years, 3 months ago

Mullins is a difficult man. I do not think that heads will roll at all. Some individuals have been in that Department forever. However, a complete investigation of this doesn"t seem too harsh to me. I hope the truth prevails.

Richard Heckler 7 years, 3 months ago

This is what could be called nickle diming the rate paying tax payers in such small amounts thinking people will blow it off. Over time this adds up to hundreds if not thousands of dollars.

Perhaps a complete audit is due throughout the system...

Shall we call in the FBI and do a Grand Jury investigation at the state level as well!

When growth is not paying back enough to keep government rolling along the money must come from somewhere.

If ALL property managers/rental property owners and commercial property owners are not paying their property taxes how about if the city and county get on top of that.... We know of one city commissioner but I hardly believe he is the only one. This might be a common well known practice although NOT affordable to the community. Audit audit audit!

Property taxes must be paid whether property has been sold or whether or not occupied by a tenant.

Are taxpayers getting duped or not?

nekansan 7 years, 3 months ago

I'm most disappointed that the city commission has been dead silent on this issue. I would at least expect them to be coming forward and saying that the do find the adjustment wording and the inexplicable delays in processing payments unacceptable and that they plan to work diligently to resolve the problems and concerns that their constituency have. This silence can only lead one to believe that they stand behind and condone the position that Mullins has taken. Lets not forget that there is an election for commission seats on April 11th. Any candidates out there want to weigh in?

nekansan 7 years, 3 months ago

Props to you, I missed that. Thanks for pointing that out.

BruceWayne 7 years, 3 months ago

you are also the ONLY candidate to be BANNED from this site for repeated TOS violations. you are also the ONLY candidate to threaten physical harm to myself and my family on several occasions. you can't win with Sven.

tolawdjk 7 years, 3 months ago

I'm guessing 90% of this could be cleared up if the City would just allow a bank to make a direct wire transfer and not need the paper check sent.

I know when I have had issues with this in the past it has always been with companies that get sent paper checks. Just as soon as you figure out how far in advance you need to tell your bank to send them the paper check, they go and change the billing address from PO box XYZ to PO Box ZYX. Bingo, you are back to paying late fees cause you didn't update your online bill pay two months inadvance.

PennyBrite 7 years, 3 months ago

I'd love to see a list of Lawrence Banks and how they deal with this. Are paper checks issued to the water department or do they pay by electronic transfer?

Anyone know?

cowboy 7 years, 3 months ago

Why cannot this pathetic management group implement a non fee online payment like 99% of businesses do. This is not inventing the wheel or fire for God's sake.

BigPrune 7 years, 3 months ago

But if the City stops charging "adjustments" where will the $187,000 a year come from? I know $187,000 is a minuscule amount compared to the $30,000,000 the city collects being only .62%, but surely these fees pay a few salaries. Everyone knows adjustment is a late fee.

....okay, just kidding.

pace 7 years, 3 months ago

I agree, Ed should get downstairs and get this fixed. The city has a bad habit of assuming the customer is wrong rather than checking , fixing, getting on with it. It is ironic the owner of the world co. feels so comfortable with talking about other people's billing procedure. When my Dad died, I was told, to include the name of his grand kids, I would have to pay three hundred dollars. I said sure, when the obit appeared they had changed their mind and the names did not appear. It was explained to me the persons who had told me (two different ljw employees} were mistaken and basically I could suck it up. After several visits they informed me they had changed the policy and from now on it would be more understandable to customers. Yes, no refund and no apology. Next family tribute of a friend was again mangled. You pay in advance, that wasn't adjusted. Last year we again paid for an obituary or special family tribute , lots of infamily wangling, careful choices of words, nice agreement within family, the obituary was oked. When it was published, it had been changed. Dolph decided to add a couple of sentences of his own, you know tweaking it. I hate him for that and he didn't pay any share. I could add many stories about when my boy delivered and the accounting problems on the kid's money.

Georgine McHenry 7 years, 3 months ago

pace, Ed is not upstairs from the Utility Billing Department. He is just down a small hall in the corner office on the second floor. He is the Finance Director. He rules his department with intimidation and generally has a lousey attitude. That Department is in charge of all city department's monies collected and there are some questionable practices IMO. A complete audit seems like a good idea regarding the "adjustment" on customers' bills. I am so sorry that your obit and tribute got so messed up.

jafs 7 years, 3 months ago

Who hired him and supervises him?

I'd like to call them and give them some feedback.

fuel_for_the_fire 7 years, 3 months ago

My bank electronically transfers funds directly to the city of Lawrence. No checks are involved. When I first set up my on-line bill paying system I didn't realize that the bank would need a few days to transfer the money and my payment was going to arrive 2 days late. I, therefore, paid the higher amount that is provided on the bill directly below the amount due. My bill for the next month included an adjustment, even though I had already paid the higher amount. This is tantamount to having a fine levied twice.

On a separate occasion, I paid the bill three days early and was still levied an ajustment. If three days is not early enough to avoid this penalty, how many days are required?

fuel_for_the_fire 7 years, 3 months ago

No ophiuchus, I want you to defend the city's levy of an adjustment twice for the same month; or how paying a bill 3 days before it is due still results in an adjustment. Apparently I didn't make that clear.

I disagree with your assertion that my choice in financial institutions is poor. I have no issues with with this particular bank; the tellers are always friendly and no other biller claims to receive my payment late.

Furthermore, I have not claimed "incompetence" and "dishonesty" on the part of the utility billing department.

You are correct about one thing: I was not vigilant and did not question the "adjustment" or realize that it is, in fact, a late fee. I'm not alone in that.

Lastly, you seem to be missing the rather obvious point that paying a bill on the day it is due is not the same as paying it late.

ashmole 7 years, 3 months ago

The city commission needs to step up on this. Ultimately, the buck stops with them. If they think this system is fair, then they need to say so. If not, they need to fix it right away. Now is the time for our commissioners to get some spines.

SpeedRacer 7 years, 3 months ago

I have EFT and it never occurred to me to look at something like this. I didn't keep any of my bills. There are many times my due date was on a weekend and the payment wasn't transferred until the next business day. I wonder if I was charged a late fee for those? If I saw an adjustment, I would have thought it to be just that.

thesloss 7 years, 3 months ago

What is the response from City Hall on this one? Anything? Hello??

fuel_for_the_fire 7 years, 3 months ago

Seriously! Your solution to this, in excess of $187,000 issue, is to suggest that people pay their bill the moment they get it. That's some pretty progressive thinking.

Munsoned 7 years, 3 months ago

Oph-- WE GET IT. Congrats on being THAT guy.

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