The late fee question at Lawrence City Hall is still an open one.
Assistant City Manager Cynthia Wagner confirmed City Hall leaders are continuing to work on determining why Lawrence has such a high percentage of water and utility bills that incur late fees each month.
But they have a theory: Lawrence is stricter than many other places.
Wagner said the city’s review of the issue thus far has found that many utilities have an unadvertised grace period that must pass before a late fee is attached to a bill. In other words, the due date may be on one day, but a late fee won’t be added to the bill until some point after the due date.
“I think a large part of what is going on is the way we have structured the late payment system,” Wagner said. “There is no grace period with our system.”
The issue of late fees arose in January when the Journal-World reported concerns of a Lawrence resident who said she had unknowingly paid three years of late fees to the city, in part, because the city on its bills called the charges “adjustments” rather than late fees.
A few days after the article, the city announced that it would change its bills to include the more specific term “late fee” rather than adjustment.
The article, though, also brought up questions of whether the city was processing payments in a timely manner. The city estimated that about 30 percent of all monthly utility bills had a late fee attached to them. That was about twice as high of a percentage as several other area utilities.
City officials expressed surprise at the number and said they wanted to determine why the percentages had reached that level. Wagner said the grace period issue was an important one because Lawrence begins attaching a late fee to a bill as soon as the due date passes. Several other utilities, she said, do not.
Whether the city wants to change its practice is a topic being discussed inside City Hall.
“We’re continuing to evaluate it,” Wagner said.
On one hand, the city doesn’t want to give people an incentive to delay sending their payments to the city. But Wagner said the city is finding that some people may be caught unaware of how long it can take for electronic payments to be shipped to the city’s account.
Following the January article, the Journal-World heard from some several Lawrence residents who said they received late payment charges despite using an electronic bill-paying system that transfers money directly to the city’s account without the use of a check or the postal system. Those customers initiated the payment before the due date but still incurred late charges.
Wagner said the city also had heard some of those concerns. She said an issue that customers need to understand is that those electronic payments don’t go directly to the city.
“If I pay my bill electronically, my bank doesn’t necessarily talk to the city of Lawrence directly. There is a third party handler involved, and that can take some time.”
That could be a reason for the city to provide a grace period, but Wagner said the city wanted to study the issue some more. If a change is made, it probably won’t be advertised because the city wants people to respect the actual due date.
The city is also reviewing bids from credit card processors that could make it easier for the city to accept credit card payments without charging a large “convenience fee.” Currently, the city charges a $3.95 convenience fee to cover the fees the city is charged by the credit card companies. Whether a new provider would be able to allow the city to offer a no-fee credit card option isn’t yet clear, Wagner said.
The city does offer a no-fee auto-bill pay option, but that requires a customer to allow the city to make a direct withdrawal from the customer’s bank account.
“We feel like the best thing to do is to sign up for our direct deposit system because that way you will know that it is getting to us on time,” Wagner said.