In an effort to make sure any possible future utility rate increases are fair, Alexander City will attempt to collect past-due bills.
New Alexander City mayor and superintendent of utilities Woody Baird said severely delinquent utility bills frequently fall under the same accounts.
“(Alexander City utilities collections revenue officer Jason Locke) told me he estimates the total delinquent in utilities could run up to $500,000,” Baird said. “We have done nothing much to collect that.”
Baird shared the information on the delinquencies and his plans to collect it at Thursday’s Alexander City City Council work session.
The collection of past-due utility payments comes on the heels of the Jackson Thornton cost of services study stating the city needs to increase utility rates to help fund a bond issue paying for needed utility infrastructure projects. Baird said no one type of customer is totally responsible.
“We have customers with three or four bills out there,” Baird said. “We have the $75 (late fee), but if some of the people can’t pay then they aren’t going to pay. We have a lot of high-end (customers) too.”
Baird said he was instructing city employees to start collections on those customers with at least two bills past due.
“We are going to send them letters, do whatever we can,” Baird said. "If they see we are going to enforce it, then we are going to get a large percentage of that paid. They are going to pay it once we start putting some teeth into it.”
Delinquencies are not the only problem with collecting payment for utility services.
“We also have a couple of customers who are such bad customers we pulled their meters,” Baird said. "Then they have straight piped their water lines.
“The water department doesn’t want to do anything about it because they say when you take them to court the judge will ask, ‘Did you see them straight pipe it? If you didn’t see them straight pipe then you can’t convict them.’”
Councilmember Chris Brown said the bypassing the water meter presents another issue.
“You are bypassing the backflow prevention,” Brown said. “That is a homeland security issue.”
The backflow prevention prevents water from flowing back through the meter into the water distribution system. It prevents the introduction of bacteria and chemicals from flowing to main water lines.
Baird said he wants to go ahead and pursue collections.
“We have been complacent for years; we’ve sat back and allowed these people to get away with it,” Baird said. “Even the people who owe $50 a month, in 10 months that is $500 plus the $75 late fee which is now $750. (The city is owed) $1,500 for a year on a given customer. We have 100 of those customers. They don’t do anything to collect it.”
Those who steal utility services from the city will also be pursued.
“The guys with the straight pipe, we are going to prosecute them,” Baird said. “Even if we can’t get them convicted of anything, we are going to have the pipe taken out. If we have to we will take it off at the main. The thing is they are going to have to show up in court; it is going to take time; it’s going to take their revenue. Maybe if we make it hard enough on them they will quit.”
Councilmember Eric Brown supports Baird’s efforts for collections.
“It’s not fair to everybody else who works their butt off to pay their bills on time,” Baird said.
Council president Buffy Colvin said collection efforts are not something Baird has to share with the council. Baird said he is doing it so everyone has the information when they start to receive phone calls.
“I’m just sharing information, telling you where we are at because y’all are the ones who are going to get the repercussions from the customers and citizens,” Baird said.
In effort to prevent the city from being stuck with utility bills, Baird wants to change the utility deposit system.
“We will have a credit service come in,” Baird said. “We have these same customers over and over again applying for utilities and deposits. They are the same bad customers. They keep coming in and they keep getting it cut back on. They keep running up a utility bill and leaving us stuck with delinquencies over and over again.”
Baird said the current system has the customer losing the deposit, but the deposit isn’t large enough to cover the cost of services when the customer walks away.
“This company will do a credit check on them when they come in to establish a new utility bill,” Baird said. “They have an adjustable rate. It is according to the person’s credit check to what their deposit will be. Some of these bad customers who have been taking money from us for years, by doing bill after bill after bill; reestablishing a utility account; using different names; using their sister’s name; using their brother’s name.”
Baird said the adjustable deposit system would prevent further losses due to reestablishing utility accounts.
“We will start collecting money from them on the front side for the deposit,” Baird said. “I think we will start to see a decline in these.”
Councilmember Eric Brown said it’s the city’s fault for not catching those trying to reestablish utility accounts in other people’s names, but agrees something needs to be done to help stop it.
“They are catching a lot of it,” Baird said. “This was suggested to catch more of it. We have the same people sticking us over and over.”
Assistance from a company providing a credit check service and changing the deposit structure will require the council to amend an ordinance.
Baird said the city has had a practice of just ignoring some delinquent accounts.
“A lot of these people on the low end who owe, they are just clearing the list,” Baird said. “Again, something I want to fix.”
Baird said the city must be firm with those trying to reestablish utility services. Baird said someone was living without electricity visited him wanting his power cut back on.
“He owed $1,596,” Baird said. “The bill had been put under four different names at the same residence, same address. He said, ‘I need my power cut on.’ I said, ‘You owe us this money. All of these people are you. All of you live in the same house. We are not cutting it on until you pay us $1,596; you pay us the deposit and we cut your power on.’ He said, ‘OK,’ turned around and walked out. They are just trying me. Seeing if I would cave. I think we have to get tougher on the utility collection.”
Baird said most city employees are willing to put in the work for the collection effort to try to prevent the issue from growing.
“Our guys are anxious to do it,” Baird said. “I looked at the cutoff list, it’s pages. People missing one bill, OK. People missing three and four, it's time to go after them and collect it.”
Ultimately Baird said he wants to make sure the funds are collected so other utility customers are stuck paying the bill.
“I just want to collect some of this money,” Baird said. “It is our money; we need to get as much of it as we can.”