City Must Decide Whether to Reimpose Late Fees on Utility Bills

A moratorium on disconnecting water, heat and electricity to households across Wisconsin that also banned late fees ends July 25, creating a potentially difficult decision for the city of La Crosse’s Board of Public Works.

The moratorium was put in place by the Wisconsin Public Service Commission (PSC) on March 24. It was an attempt to offer relief to households struggling due to COVID-19 and the severe economic crisis the pandemic provoked.

Electric and natural gas utilities can start issuing disconnection notices from July 15, ahead the expiration of the moratorium on July 25. The city of La Crosse does not shut-off water service for nonpayment, but does charge late fees when attempting to recoup money from households that are behind in payments.

The late fees are charged at a rate of 1% per month, applied to the total unpaid balance. If an account that is behind by more than 20 days has not been paid off by Nov. 1, an additional 10% penalty is applied by the city.

At its meeting on Monday, June 29, the city’s board of public works is expected to decide if the city should restart collecting those fees from residents who are behind on their water, sewer and stormwater bills once the moratorium ends. In addition to banning late fees, the statewide moratorium also required utilities to offer deferred payment plans to any customer facing difficulties.

Bernard Lenz, the city’s utilities manager, told The La Crosse Independent he’s seeking authority to allow his department to work on deferred payment plans “due to pandemic related need” without having to go to the board for approval in each case. He’s also asking for authority to allow staff to apply discretion in the application of late fees “during the remainder of this pandemic.” 

Lenz noted in a memo to the board of public works that the city could also simply continue waiving all late fees. The other option is to return to the regular system of “putting all unpaid bills on the tax assessments and bring requests for a late fee waiver or deferred payment plans to the Board of Public Works as appeals,” Lenz added.

Rebecca Cameron Valcq, the chairperson of the PSC, has asked utilities to work with households who might be struggling to pay their utility bills, considering the exceptional circumstances presented by the pandemic.

“I strongly encourage utilities to provide extra flexibility for those whose lives and employment continue to be severely impacted by this disease,” she said earlier this month, after the PSC voted to end the moratorium on July 25.

Tenants in La Crosse are not necessarily on the hook for utility bills charged by the city that fall into arrears. Ultimately, the responsibility belongs to the property owner.

However, landlords in La Crosse can add language to rental agreements “that not only states the tenant is responsible for paying the utility bill, but can make tenancy dependent on said payment.” This means that if the tenant fails to pay the utility bills, the landlord can evict the tenant to stop those debts from accumulating. Landlords can also ask tenants to sign the city’s Landlord/Tenant Agreement, which states that if a tenant falls behind on utility bills, a lien could be placed against the tenant’s personal assets.

Although the pandemic has led to a huge increase in unemployment, there has not been a large rise in households falling behind on city utility payments in La Crosse.

The number of accounts with delinquent balances at the end of May was 3.9% higher than the same period in 2019. But the number was 10.5% lower compared to the same period in 2018, said Tina Erickson, the city’s Utilities Accounting and Customer Support Supervisor

Since the separate moratorium on evictions was lifted on May 26, there has been a surge in eviction activity in La Crosse County, with at least 63 eviction cases filed, according to public court records. Support is available to renters in difficulty who meet eligibility requirements through the Wisconsin Rental Assistance Program. More information here.

By Eric Timmons. Send questions or corrections to lacrosseindependent@gmail.com.

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