City looks to capture past-due sewer system bills

[October 29, 2009]  The Sewerage Treatment Plant and Sewers and Drains Committee met Tuesday evening prior to the committee of the whole to discuss a possible sewage arrears amnesty program.

Committee chairman Buzz Busby called the meeting to order and passed out an outline of a proposed discount program that could be offered during the amnesty period to customers who pay their bills in full. He stressed to the group that the proposal was a starting point for the discussion and certainly subject to change.

Currently the city of Lincoln has approximately $116,000 in unpaid sewage bills. Busby said that he had a two-page report from the city clerk's office showing who is in arrears and the amount. He said that the majority of those accounts owed in excess of $1,000.

He also said that he has asked the clerk's office to provide this report to the full council in the future.

Busby said that he had a meeting scheduled Wednesday with Illinois American Water. That company would present a proposal for doing water shut-offs for these delinquent accounts. He said that in addition, Environmental Management Corp., the company that is contracted to the city for the waste treatment facility, will prepare a proposal for the same thing.

He stressed that the city had to have something in place so that there would be a certain consequence for not paying the sewage bill.

The idea is that the city will offer a 45-day amnesty program when those arrears can be caught up and discounts given to those who participate. If the delinquent accounts are not settled in that period of time, then the water will be shut off at that address.

The initial plan

The initial plan includes a 20 percent discount for sewage bills that exceed $200 and a 10 percent discount for account balances less than $200.

In addition, he added a pre-pay requirement of $80. He explained that adding the pre-pay as a part of the amnesty program would guarantee the city at least the next four months' payment before customers stopped paying their bills again.

Busby went around the room and asked each alderman to comment on the proposal.

In general everyone is in favor of an amnesty program.

Alderwoman Marty Neitzel said that she was in favor of the amnesty program but wondered if the 20 percent discount was enough. She suggested bumping it up to 30 percent.

Alderman David Wilmert agreed that 20 percent might not be enough. Looking at the document Busby had handed out, he said that on a $1,000 debt, the discount was $200, but then the addition of the pre-pay made the final bill $880, only $120 less than the arrears. He wondered if it was enough to motivate customers to pay.

Later Wilmert would also point out that the 10 percent discount along with the $80 pre-pay on debts less than $200 would actually cost the customer $260 to get out of arrears. He's doubtful that anyone will do that.

Alderwoman Stacy Bacon asked how many of these accounts were aged out beyond five years, and Busby answered that approximately half of them are.

She asked if any of the people on the list Busby has now have ever contacted the city to work out a payment plan or a settlement, and Busby said no.

He also stressed that had any of them said they wanted to work out a payment plan, the city would have gone along with that.

Bacon said she wondered if customers who have made no attempt in the past to deal with their delinquent account would really make an effort now, even with an amnesty program.

"We're hoping they will," Busby responded.

Busby went on to say: "I'm willing to try almost anything. I really don't know what other alternative we have."

Can we send a letter?

Alderwoman Joni Tibbs suggested that the city might send out letters to delinquent accounts, expressing the city's desire to work with customers to clean up the arrears.

She said that as the charges add up, the customers are probably just tossing the bill in the trash because they know they can't do anything about it.

She said that they should know that the city will take partial payments, weekly or whatever would help them to pay up the account.

City attorney Bill Bates said that he really didn't know that it would do any good. He said that for the most part, those who are not paying their bills just don't care that they owe the debt.

Bacon agreed with Bates, saying: "I doubt that with an amnesty program these people who are blatantly not paying their bills for so many years are going to step forward and pay up now."

Busby said that the city has told people for years that they can make partial payments. On the other hand, he said that it may not be well-publicized that the sewage bill can be paid via credit or debit card.

Should we rethink the penalty?

Alderwoman Melody Anderson said that she was in favor of the amnesty program, and considering the percentage of the total debt that is accumulated penalties, she believes that a discount of 25 percent on balances over $200 would be better.

She also wondered if the city should rethink the late penalty charges. She said that adding the $25 penalty just made the bill all that much harder for the customer to pay. "If they can't pay the $80, they are not going to be able to pay the $105, and it just gets worse from there," she said.

Are we doing this backward?

In the proposal that Busby handed out at the beginning of the evening, he had set an amnesty period to begin Dec. 1 and run through to Jan. 15, 2010.

Bates said that as of now there is no incentive to pay other than the discount. He feels that the shut-off program needs to be established before the city offers the amnesty program.

He explained that being able to shut off the water immediately was a strategic advantage for the city and an added incentive to the customer to participate in the amnesty program.

Bates said: "Then, when you present your amnesty program, you can say, 'If you don't participate in the program and pay your past-due bills, we're going to turn off your water.'"

Bates also noted that based on his own experience with collections, the holiday season is a very poor time to try to collect a debt. He said that people won't care because they are spending for Christmas.

Busby said that he had been thinking more along the line that people receiving their year-end bonuses would be more likely to have the money to pay the debt.

Bacon said that initiating the program at tax refund time might be even better.

Landlord versus tenant

Mayor Keith Snyder asked about situations where the landlord is not paying the sewer bill, but the tenant is paying the rent and fully expecting the sewage account to be paid.

He wondered if there could be a publication of the list of delinquent accounts.

Bates said that it would be legal to publish the list, but Alderman Jeff Hoinacki wondered what it would gain, as publishing only the name would not necessarily let the tenant know that it was his or her home that was going to be shut off.

Bacon suggested that perhaps the publication could include the property address.

Wilmert wondered if then the tenant could come to the city and offer to pay. Busby said that the city has always dealt with the landlord, but Wilmert said perhaps there was a good tenant who paid his rent but had a bum landlord who didn't pay the sewerage. He said, "Couldn't that tenant come and say, 'I'll pay the bill if you won't shut me off'?"

Bates said that as he recalled, the last time the city considered doing shut-offs, this was the problem they ran into, and Busby added that at that time, the company they were working with to do the shut-offs didn't want to deal with that kind of hassle.

Can we write up a program?

Busby started drawing the meeting to a close by asking if the committee could go ahead and write up the program.

He said he didn't feel that the time frame he had put in the original proposal was going to work, but he wanted something drawn up and ready to implement once the shut-off agreements were worked out.

Neitzel made a committee motion that the program be put in writing with discounts changed to 30 percent for balances exceeding $200 and 20 percent for those below that amount.

The motion also included maintaining the $80 pre-pay as part of the program.

Sewer committee members present were Busby, Neitzel, Wilmert and Bacon. Alderman David Armbrust was absent for the evening. Other aldermen present were Hoinacki, Anderson and Tibbs. Alderwoman Kathy Horn and Alderman Nathan Turner were not present for the meeting.

With an aye or nay vote, the motion carried unanimously.

The committee will write the program and continue working with Illinois American Water and the Environmental Management Corp. for shut-off agreements. Those proposals will be reviewed and voted on at a later date.

[By NILA SMITH]