Ever been worried about being late on your water bill? The City of Saline is considering a new policy that would give users a one-time “get out of jail free” card to avoid late fees and penalties.
City staff and the city's law firm were instructed to draft a policy for Saline City Council's consideration after a 45-minute discussion on the topic at Monday's city council meeting.
When residents and businesses are billed, they are given 30 days to pay their bill. When late, the city charges a 10 percent penalty and a 0.75 percent interest fee. Users can appeal their charge to city council, which has traditionally denied all appeals regardless of the reasons given for late payment. The issue came to the forefront again in July when American Soy, the city's largest water user, was charged $3,278 for an overdue bill.
Council voted 5-2 to deny American Soy's appeal.
During Monday's discussion Treasurer Mickie Jo Bennett told council that Saline's penalties were in line with other communities. She compared Saline with Ann Arbor, Milan, Pittsfield and Ypsilanti.
“10 percent is pretty much the average penalty,” Bennett said.
Where there is a difference is in the appeal process.
“In Ann Arbor, they'll let you be late once a year and grant a waiver without a process. In Milan and Pittsfield, they look back over the last three years. They give you one shot to be late,” Bennett said.
Bennett also provided some historical perspective for the 10 percent penalty. When she began work with the city the penalty was 10 percent. The city reduced it to 3.75 percent and saw a change in behavior.
“We had rentals playing that game where they would just let the water bills roll on to the tax bills. We wanted to clean that up so we went back to 10 percent,” Bennett said.
During the discussion council showed a desire to keep some teeth in the penalties while reducing what some councillors felt were excessive penalties to the large users.
Councillor David Rhoads said he didn't want to see the city making money on fees. Councillor Dean Girbach suggested a flat fee instead of a percentage fee.
“It takes the same time and effort for a $10,000 bill as an $100 bill,' Girbach said.
Councillor James Roth said he wanted to see the 10 percent fee retained so that the city's big water users maintain their incentive to pay on time.
Bennett noted that Faurecia is on an automated payment plan and that American Soy still has not paid the outstanding charges.
City Manager Todd Campbell suggested a hybrid penalty – a percentage penalty with a cap that was high enough to deter tardiness. Rhoads suggested a 10 percent penalty with a $1,000 maximum cap and interest that kicked in 30 days after the late notice. The idea was generally supported.
Council also supported the idea of giving users once chance to be late without penalty.
And after years of saying no to residents and companies who ask to waive penalties, it seems council no longer wants to be the arbiter in these cases.
“I would like to see us have a way to avoid making such judgment calls and trying to constitute what excuses are legitimate at the council table. It seems like a waste of our time,” Councillor Linda TerHaar said.
Campbell agreed that the decisions can be made administratively, but he said city staff would need a tight set of parameters to make their decision.
Council expects a draft policy on the issue for its second October meeting.