Franklin utility billing policies are working, says admin

Published 10:19 am Saturday, September 13, 2014

Franklin-The new Franklin utility billing policies have had the desired effect in influencing customer service behavior, according to city management. Some of the outcomes leave a little to be desired, but City Manager Randy Martin said as they move forward, and perhaps make some tweaks, the city can improve utility billing for both customers and staff.

With the new policies, council had hoped to cut back on the number of extensions granted, impact the number of cut-offs performed, and reduce work orders processed as well as the number of penalty notices mailed.

The first phase of the policy change happened in January, while February was the effective date for the changes relating to billing.

In the new policy, the 1.5 percent or $2 penalty, whichever was greater, still applied, while a $15 late payment fee was added. The $50 administrative fee for names appearing on the cut-off list was eliminated, but it added a $75 reconnection fee on accounts disconnected as a result of non-payment. It’s $100 for accounts being reconnected after hours, from 4 to 8 p.m. Extensions were limited to once a year instead of two.

Deposits and service fees were also streamlined, but Martin said that change had no effect on accounts being created or transferred.

From January to June, extensions dropped by an average of 23 per month, or a 22 percent variance from 2013 during the same period, in which an average of 103 extensions were granted per month.

“My take on it is that it is pretty good,” Martin said. “I hope that this will continue to improve, but, I also think that this is maybe as good as we are going to get.”

Unfortunately, the effect isn’t really helping city staff spend less time on it. While they have fewer extension requests, they have an increased number of customers checking to make sure that their extension was used.

Mayor Raystine Johnson-Ashburn said that out of approximately 5,500 customers, the percent of people asking for extensions is fairly minute.

Ward 1’s Benny Burgess commented that it looked like extensions were trickling down anyway leading into January. Martin speculated that perhaps it was related to customer awareness as the city was talking about the changes around there.

Utility billing clerk Joyce Johnson added that cooling and heating programs offered through Franklin’s Department of Social Services and other assistance also help out during the cooler and hotter months, which would impact how much some customers are paying.

From January to June, cutoff notices dropped by an average of 28 each month, or a 15 percent variance.

“When we started this, we were sending second notices to 45 percent of our customers,” Martin said. “We’re working hard on changing this one.”

That was part of the reasoning behind the old $50 fee for making the cutoff list, even if your services were never cut off.

But Martin said they had a hard time justifying that policy, which began in 2002, and instead changed to a system where only citizens who cut their power back on pay a fee, albeit a larger $75 to $100 fee.

It has resulted in fewer customers paying the fee.

From March to July 2013, 556 customers paid $27,800. During those same months this year, 293 customers paid $22,700.

“This is a win for everybody,” Martin said. “This policy was a real thorn in our side. It was really hard to defend.”

Another victory was in the volume of calls, Finance Director Melissa Rollins said. The city spent far more time dealing with complaints about the $50 list fee than the new $75 to $100 reconnection fee.

As far as work orders, the city processed an average of 17 fewer from January to June, or a 4 percent decrease. Other than showing that a high number of people move around a lot, Martin said this one doesn’t really show a lot.

One of the biggest issues he hoped to impact was penalty notices mailed, as that comes with a cost. In 2012-13, the city spent $11,923.79 on second notices.

On average, the number sent dropped 15 percent from January to June, but Martin was hoping for more. The cost to the city for 2013-14 was only a reduction of $693.17 as far as second notices. Martin said he was hopeful that they’d see better results in 2014-15, but there were challenges there.

He said one of the culprits was the way some of the federal government assistance systems are set up. For instance, in July the number of notices sent was higher than the January to June average of 1,707 per month at 1,770.

Martin said that coordinates with when the cooling assistance program would be heating up. To get assistance, he said you have to have a cut-off notice or they will send you away.

Martin said one of the reasons for having a penalty as well as a fee for late payments was to create an incentive for on-time payment so they could save on notices.

In many instances, when Martin has talked with customers complaining about having to pay the $15 late fee, the problem is priority.

“When we looked at how they pay their bills, in almost every case, we are the last priority,” he said. “I’ve encouraged them to maybe re-prioritize if you don’t want to pay the fee.”

As far as having two payments for having a late fee, Treasurer Dinah Babb said to consider the 1.5 percent penalty kind of like a credit card interest charge. As long as the customer is delinquent, the late fee continues to accrue each month.

One reason to not simply lump them together and say you pay a $17 penalty is because of that accrual. It could be more or less for each customer.

Another reason is because of the large commercial customers that pay thousands of dollars each month. The $15 penalty is not a disincentive to such a customer, but the 1.5 percent fee is. The opposite is true for a residential customer paying $100 to $125 a month — the $15 penalty is is more of a disincentive.

“There is a fairness built in by keeping both,” Martin said.

Transparency is also an issue.

“Who wants to pay hidden fees?” Babb asked.

Another culprit is when the city sends out bills. If the bills were sent out on the third of the month, customers ought to have them within a 4-day period after it goes through a third-party service. However, the information is not always processed by the third, and sometimes customers have fewer than 10 total days to pay their bill by the 20th.

Some considerations for improving the system involve moving the reading of the meters to the 20th of the month instead of the 25th. This would come with the downside of one month having a longer billing cycle, which would increase the bill for that month. Martin said if they make the change on Oct. 20, the winter rates are going into effect and the temperatures are not as bad, so the extra days would be more manageable.

Another option is to consider closing the window during certain hours of the month, so that billing employees can work more on their administrative duties.

The last option was considering moving the bill due date from the 20th, though Martin said that option would be more of a last resort.

Wherever you move it, people will be adversely affected while others will be positively effected, he said.

Johnson-Ashburn said they’d keep their eye on how the policies work as they go forward.

“We will keep evaluating, and after a year we’ll ask staff to come back with recommendations for either staying the same or changing some things,” she said.

“Based on this evaluation,” Martin added, “our belief is that this is working. It might need some tweaks, but the policies are working.”