Saginaw City Council tables late water bill payment penalty decision until after study

SAGINAW, MI – Saginaw City Council members wait for staff to submit a financial analysis of the water system before voting on possible changes to water bill late fees.

The Council, at its meeting on Monday 9 August, voted to present the proposal – which would reduce the water bill delay from the current 10% to 1% – until the additional information is available.

City officials said a financial analysis of the water system was needed regardless of the late penalty issue.

Saginaw typically plans water volume adjustments years in advance to offset the planned costs of maintaining the water system.

The pandemic made matters more difficult, according to the staff. For example, the pandemic disrupted the global supply chain for materials used in maintenance and construction projects. This is a challenge for a number of industries – not just municipal water systems – causing delays in projects that started before March 2020.

Prior to the pandemic, Saginaw staff expected to address changes in water rates, but the global disruption has disrupted those plans.

“We didn’t know what was going to happen to the rates, so we actually held back, and that is affecting the rates,” said Paul Reinsch, Saginaw’s director of water and wastewater. “We need to find out where we are before we do a full analysis to see how we’re going.”

Reinsch said it was too early to predict a schedule for completing the water system financial analysis or the tariff analysis that follows it.

Saginaw’s 18,000 water customers this year saw a 4% increase in the water supply rate that was planned before the pandemic.

Saginaw City Manager Tim Morales said the 4% increase is the typical magnitude of a rate change. Any rate increases resulting from lowering late fees – an investigation by city staff found that such a move could result in water price increases of up to 3% to balance the budget – would be added to the price increases planned for traditional purposes, he said.

For example, if reducing the late fees resulted in a 3% increase in the water charge during a year, while typical maintenance costs resulted in a 4% increase in the water charge, customers would experience a 7% increase in the amount of water.

Some council members expressed support for lowering late fee penalties in order to reduce the rising costs for financially challenged residents. Before reinstating a pandemic-induced moratorium on payments to water utilities last month, the city demanded payments from 750 citizens who have been in arrears on those bills since March 2020.

Other council members spoke out on Monday against possible resulting increases in water tariffs, which they equate with putting the weight of the late fees on the shoulders of all 18,000 water customers.

“I’ve talked to citizens. They don’t want to pay someone else’s water bill, ”said Reggie Williams II, a Saginaw councilor. “I don’t want to pay someone else’s water bill.”

Saginaw City Councilor Michael Flores has proposed using a portion of the recently received $ 52 million from the American Rescue Act’s stimulus fund to help stem increases in water rates.

Such a measure was not discussed in the Monday meeting. It is unclear whether the incentive – which aims to support the costs presented during the pandemic – would apply to an amendment to the city’s ordinance.

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