Smithfield Considering Changes In Late Utility Payment Procedures

On July 29th, NC Governor Roy Cooper’s Executive Order prohibiting disconnects for late utility payments expired.  The Town of Smithfield utility department began charging late fees but also allowed 6-month payment options for delinquent customers who were unable to immediately catch up on their past due bills.

At last report, there were 245 accounts past due a total of $101,641.  Of the past due accounts, 62 have been placed on a six month payment plan at the customer’s request.  Many others are seeking assistance from the Department of Social Services and Community Action.

The town council recently discussed the current policy for charging late fees.  During the Aug. 4th meeting of the town council,  finance director Greg Siler told council members the current policy is to begin charging a late fee on utility bills the first day after the due date.  The town charges a five percent late payment penalty if a bill is just one day late.  Cut offs occur after a customer falls one month and one day behind on their bill.

During previous council meetings, some council members had expressed concern over the policies and the due dates.   Some elected officials had expressed interest in letting customers choose which day of the month their payment is due and to stick to that schedule. Presently, there are two utility bill cycles with payments either being due on the 5th or the 20th of the month.

Town Manager Mike Scott said because of the current billing software system it would be impossible to let customers select a due date.

Smithfield Town Councilman Travis Scott has asked town staff to prepare a draft ordinance that would change the late-penalty start date on delinquent utility payments from 1 to 10 days. Johnston County Report Photo

Siler said by changing the late-penalty date, it would also change the cutoff date.  He said the town could potentially lose $180,000 or more per year in revenue.   He said the Town participates in the State of NC debt set off program. If the delinquent utility customer receives a state tax refund, the town can collect past due balances if they are reported to the state program.

Councilman Travis Scott asked town staff to create a draft policy to move the late penalty start date from one day to 10 days for all utility accounts.   Scott asked the draft policy be brought back before the council for review as early as their September meeting.

Councilman Marlon Lee seconded a motion made by Councilman Scott requesting the draft policy. The board unanimously approved.

“We are very fortunate in Smithfield to have a strong history of customers who are fiscally responsible and strong assets of our community. We are aware that we are in uncharted waters with this world wide pandemic and the Federal, State and Smithfield’s local government are working hard to assist our customers in as many ways as statutes allow. We encourage any customers that are in arrears to contact our finance department as soon as possible to discuss their repayment options so we can assist in decreasing their burden as much as we can,” Town Manager Scott said.

Each year, late payment penalties generate about $200,000 a year in revenue for the utility departments. Past due electric bill charges amount to about $125,000 and water and sewer another $75,000.