Salem's utility customers will soon have more options when it comes to paying their utility bill. At the regular meeting of the utilities committee Dec. 14 at Salem Community Center @ the Armory, the Utility Committee discussed new policies to be put in place in anticipation of offering a pre-pay service.
Pre-pay customers will be able to place an amount of money on their account, and would receive a notification when their balance is low. Committee members and city staff believe this will help individuals who may regularly struggle to pay a full utility bill. Customers will be able to add any amount to their accounts, meaning a disconnected customer could get their electricity back on without having to pay a full bill, which is the currently the case.
During the meeting, the committee discussed whether or not pre-pay customers should have to pay a disconnect fee like regularly billed customers. Currently, regular customers are given a $25 disconnect fee the first three times they are disconnected. After that, it goes up to $50.
The new system, Exceleron, will allow utility staff to disconnect and reconnect electrical service remotely from the utility office. However, water disconnects, and certain electrical customers with special equipment, require workers to physically show up and disconnect the utilities, costing the city man-hours.
According to city staff, the city's current disconnection policy will not allow a customer to be disconnected if the National Weather Service forecast calls for temperatures over 95 degrees or under 32 degrees. This policy is an attempt to ensure that struggling customers are not put in a dangerous situation if their service is disconnected during extreme temperatures.
Additionally, there are no disconnects on weekends or after hours so that customers won't have their power disconnected without a way to turn it back on. Soon, customers will be able to pre-pay online at any time, and power can be restored within minutes.
The committee ultimately voted to drop the disconnect fee requirement from pre-pay customer accounts.
However, there are other costs associated with the Exceleron system. The city will be billed $2,000 for the first 333 accounts on the new pre-pay system. This cost could be distributed evenly among the customers at a rate of $0.20 per day, coming to $6 a month for pre-pay customers. This measure would not recuperate the cost in full until the city actually has 333 pre-pay customers signed up, but it would offset the blow to the city's coffers at the outset. Temporary City Administrator Sally Burbridge said that in her talks with the company, they reported that none of their clients seem to mind the small fee because of the convenience of controlling and managing their accounts. The service is also optional, as customers can choose between pre-pay service and a regular billing cycle.
"The city is a business, and the city has some financial troubles. I think we need to pass that on (to the pre-pay customers)," said committee member Catherine Dent.
"We would definitely let them know upon signup of this, that this would be one of the fees constituted in that?" asked Committee Chair Kyle Williams, to which Burbridge replied "Yes."
The committee voted to pass the $6 fee on to pre-pay customers. Regular customers will not have to pay this fee, since they do not use the pre-pay system.
The committee also said the city foots the $3,000 monthly bill from credit card payment fees.
"The concern is if we have prepaid customers paying weekly when they get paid, we've now got four times the amount of credit card fees that we would normally have for those accounts,” said Burbridge.
Exceleron charges $3.50 per transaction for credit cards. Currently, the city pays a percentage fee for credit card transactions, costing the city a changing amount of money from month to month. While the Exceleron system is still in testing with an undetermined launch date, the committee felt it important not to blindside the public with more costs. However, due to the rate of expenditure, the committee determined it was important to take action quickly. City staff cited other businesses that are passing on the costs due to high transaction fees levied by banks and credit card companies.
"We were supposed to have an online system two years ago, you know? Right now we're eating $3,000 a month in credit card fees," said Williams.
"If you can save that money, you need to," said Dent.
The committee ultimately decided to pass on the transaction fees for credit cards and e-checks to customers effective Feb. 1, with a notice to be sent out with January bills.
