Council To Consider New Late Fee Policy, May Reconsider American Soy Penalty

 08/20/2013 - 19:53
American Soy was charged more than $3,200 for late payment on a water and sewer bill company officials say was lost in the mail.

The President of American Soy Products appeared before Saline City Council Monday night to ask for dismissal of a $3,200 penalty for late payment of a water bill.

Council took no official action on Ron Roller’s request, which came two weeks after council voted 5-2 to deny the company’s request to waive the penalty.  Council does expect to consider a new water bill penalty policy at its first meeting in September and council members support making any new policy retroactive to free American Soy Products of at least a portion of the penalty.

American Soy was billed $30,494 for its water and sewer usage on June 5 with a due date of July 4. American Soy, which produces many private label foods and broths for grocery store chains and also produces soy milk, claims it sent the check to the city July 1. The check never arrived. American Soy replaced the check July 11. In August, American Soy received a bill that included a $3,278.19 penalty and interest fee.

The city code authorizes the assessment of a 10 percent penalty and a .75 percent monthly interest charge for all bills not paid when due.  The policy also allows city council to waive the fees – though in recent years council has never done so.

In a letter to council, Roller wrote that he could understand the penalty if American Soy had a poor record of bill payments.

“American Soy worked with the city to discover that the check had gone missing. A copy of the lost check was provided and then a replacement check was delivered to the city offices the same day,” Roller wrote. “American Soy acted responsibly, promptly and in good faith to resolve a problem caused by the post office. It seems unfair and punitive to assess a $3,200 fine given the clear circumstances beyond American Soy’s control.”

Council member Jim Peters, who along with David Rhoads voted to dismiss the penalty at the Aug. 5 meeting, agreed with Roller.

“It appears that in each case we handle, city council has a zero tolerance attitude. That invites injustice and hinders common sense,” Peters said. “The world is not black and white.”

Still, like resident Mary Hess pointed out in public comment, senior citizens on fixed incomes haven’t been given a break when they’re late on water bills, so why should a big company be any different?

Councilor Lee Bourgoin agreed with Hess that the city should treat everyone equitably.

“I don’t like the idea of picking and choosing, where we help our friends and don’t help someone else,” Bourgoin said. “However I do think 10 percent is excessive. I don’t think our late penalty should be a percentage. If the cost of extra billing is $50, then we should charge that plus whatever our interest charge is per month.”

Bourgoin said the city worked hard to attract American Soy to Saline and to help the company grow. He said the company has been a good corporate citizen. He suggested that when the city addresses its policy, he’d like to go back and retroactively refund charges for the last six months.

Councilor Rhoads said he supported Bourgoin’s flat fee approach and said he’s support the idea of retroactively changing the penalties.

Mayor Brian Marl said the city treasurer is in the process of gathering information about the ways other cities handle late fees. He said he expected to have ideas to discuss in September.

“If council wants to discuss retroactively changing the penalties, that discussion can be had. I’m not sure I’d be in favor of that,” Marl said.

City attorney Scott Smith said the city can retroactively change penalties.

Councilor Dean Girbach said council should be cautious about changing its water and sewer bill policies.

“We should be making sure that whatever we do doesn’t impact our overall fee structure,” he said.

After the discussion, Roller said he was grateful city council took the time to listen to his request and optimistic a positive outcome could be achieved.

Tran Longmoore
Tran Longmoore founded The Saline Post on Aug. 15, 2012. Follow him on Twitter at @tranlongmoore. Follow The Saline Post @thesalinepost. Follow The Saline Post on Facebook by clicking here.