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Hundreds delinquent on Hagerstown utility bills

By March 31, 30 percent of water and sewer receivables -- the total amount owed by customers -- were delinquent by 31 or more days

April 17, 2013|By DON AINES | dona@herald-mail.com

Several hundred Hagerstown utility customers are delinquent on their bills, but the city has no late fees for those who fail to pay on time, Councilman Kristin Aleshire said at Tuesday’s council work session.

As of March 31, 30 percent of water and sewer receivables — the total amount owed by customers — were delinquent by 31 or more days, according to an April 5 memorandum from Information Technology and Support Services Director Scott Nicewarner to City Administrator Bruce Zimmerman.

The total amount billable for sewer and water service is about $2.4 million, but the amount considered delinquent is about $775,000, Nicewarner said in a telephone interview Wednesday. The amount owed from delinquent accounts had declined to about 28 percent as of Wednesday, he said.

The memo said 17 percent of electric utility receivables were delinquent by 31 or more days.

The city has 38,000 sewer and water customers and about 17,000 electric customers, Nicewarner said.

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“It’s still a challenge because people are struggling out there,” Nicewarner said of the delinquent accounts.

Some are having a hard time paying bills, others are late for one reason or another, and there are vacant properties, he said.

The city can place liens against properties that are delinquent on sewer and water bills, but that money might not be recouped until a property changes hands, Nicewarner said.

Those delinquent on sewer and water are also behind on paying for trash services and the Bay Restoration Fund fees the city collects for the state, Aleshire said after Tuesday’s workshop session.

Nicewarner’s memo said the 30 percent delinquency rate for water and sewer customers is “just slightly higher than normal for this time of year” because those accounts are billed quarterly and the city does not shut off service for nonpayment during the winter to avoid damage to pipes.

The delinquency rate is expected to decline by 50 percent or more by mid-summer, the memo said.

“In regard to the electric utility, the city is governed by the rules and regulations administered by the Public Service Commission ... as to the interruption of service for non-paying customers,” Nicewarner wrote. The electric account delinquent rate was slightly higher than the 15 percent rate normal for this time of year, he wrote.

Nicewarner said Wednesday he did not have a figure for how much is owed by delinquent electric accounts.

Aleshire said the city is unable to shut off electric service for nonpayment between Nov. 1 and April 1.

“We go through the process of the PSC and electric is dealt with differently than water and sewer in terms of disconnection and not being able to place a lien on properties,” Aleshire said.

The city shut off service on 402 accounts as of Wednesday, Nicewarner said. However, more than half of those — 218 accounts — had been restored as payments were made, he said.

The city needs to look at private utilities and determine what a reasonable rate of delinquent accounts is, Aleshire said.

“Clearly it’s not 30 percent. Clearly it’s not 17 percent,” Aleshire said. The city needs to set a figure and come up policies and procedures to hit that goal, he said.

The process for disconnection has to be objective, Aleshire said. It should be that “on X-day termination occurs and these are the processes for reconnection,” he said.

“I do think the city itself could do a better job of collecting,” Councilman Donald Munson said after the meeting.

A rate increase for water and sewer customers goes into effect on July 1 and Aleshire said it is unfair to those who pay on time to assume part of the cost of those who do not.

After July 1, water rates go up 5 percent for city customers and 6.5 percent for those outside the city, according to Director of Utilities Michael Spiker. Wastewater rates will go up 5 percent for city customers and 3 percent for those outside the city, Spiker said in an e-mail.

The upcoming rate adjustment is part of a five-year rate adjustment plan passed by the city council several years ago.

Electric customers will see an overall decrease of approximately 9 percent when a wholesale power supply contract extension becomes effective in June, Spiker said.

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