I am writing on behalf of the Vergas City Council to respond to concerns raised by some city residents about the possible shut off of service to city residents who do not pay their water/sewer service bills.
The City’s current billing practice is as follows:
Water/sewer bills are mailed out to resident and business customers the first week of each month and are due by the 22nd of that month. Any bills not paid by the due date generate a second or “late” rebill mailed by the 24th. If by the 22nd of the following month the water/sewer bill is not paid, another late bill is mailed along with a bill for the current month’s service. If at least the delinquent amount from the previous month is not paid within 10 business days, a certified letter is either delivered or mailed to the customer giving the customer another 10 business days to pay before the City terminates water service to the customer. During this time, the customer may call the City Office and set up a payment plan to have the delinquent bill paid within 60 days to avoid shutoff.
The city has shut off service to two customers in the past 12 months and both were able to pay their bill and their water/sewer service was resumed. Currently, there are two customers who have not paid for water/sewer service since January, and who were just sent 10-day notices. Both of those customers may make arrangements, as explained above, to pay their delinquent balances and keep service intact.
Why does Vergas, and many other Minnesota cities, have such ordinances or policies?
- Providing water and sewer services is not cheap. In small towns such as ours, the per customer cost is significant. The cost of a water tower, whether in Moorhead or Vergas, is similar, as is the cost of operation. But, the City can’t spread the bill over a large customer base. Recently, the council struggled with how to pay for two lift pumps costing in excess of $18,000 from water and sewer budgets that have negative balances. The city has continued to raise rates to bring the fund balances into the black, but the cost of providing such service continues to rise and paying for and controlling costs are challenging problems.
- When the City is not paid for service provided to a customer, then the remaining customers do, or the City runs a deficit, or it borrows money to cover the cost. Ultimately, the taxpayers get this bill.
- Yes, the city could, and sometimes as a last resort does, assess a delinquent bill against a customer’s property, but these bills are only paid, if at all, a year or more later, and sometimes never. The city can’t be the entity covering the bill. If the cash revenues do not come in as budgeted, the city can’t pay its costs of service. Customers sometimes ask for this relief, and it is routinely denied, not because their circumstances aren’t appreciated, but because the precedent set would make the City a lender for those needing relief and would ultimately cripple the ability of the city to provide service.
- The cost of collecting delinquent bills is significant. So is the cost to the city of allowing a small delinquency increase to a large one. The shut off policy provides time and options for those experiencing economic difficulties to receive service, while protecting our other customers and taxpayers by not creating large billing deficits and maintaining an efficient method of collection of fees.
Recently, because of the economic distress cause by the Covid-19 pandemic, the city council debated what could be done if a customer, because of Covid-19 related circumstances, couldn’t pay a water/sewer bill. The council had to balance the cost to the city against the need to fund the cost for providing water/sewer services to those in need. The council decided to provide relief by requiring a providing a minimum payment of $20 per month for services, forgiveness of late fees and to delay full payment of delinquent balances until August 22, 2020. If the need continues, it may extend that date. Customers may apply for such relief by filling out the form on the city website and providing proof of Covid-19 related hardship.
The city council members struggle with balancing the relief requested by one customer against the cost to its other customers. This is never easy or pleasant, and there is never a resolution that solves everyone’s problem. Do Council members have hearts? Yes. Are they human? Yes. Do they have to consider everyone’s needs? Yes. That doesn’t make Council members mean or mean spirited. It makes them responsible. The Council is doing the best they can. With your help and input, we’ll continue to keep our city “vibrant and a wonderful place to live.”