CITY COUNCIL: Challenges Utility Bill Late-Fee Scheme

But only low-income customers will benefit

The Columbia Mo City Council tonight will take up Bill B12-23, which partially quashes a utility bill late fee scheme some have called a scam. The public is invited to comment at the meeting.

"We need an ordinance change to address a problem capable of repetition, namely the charging of a late fee on those utility customers (the city calls us ratepayers) who get paid several days after their monthly utility bill is due, resulting in a late fee of 3% of the unpaid balance each and every month," First Ward Council member Pat Fowler said on her Facebook page. "City staff processes do not permit switching your due date to a date after your income arrives."

Instituted under the Mike Matthes administration, the late fee scheme moved utility bill due dates to before the end of each month, causing thousands of customers who get paid after the first of each month to fork over the late fee.

At 3% per month, the late fees generate a rough annual return of 36%.

Previously, the city-owned utility -- which controls garbage, power, water, sewer, and storm drainage -- allowed customers to set due dates based on pay days, with a majority paying shortly after the first day of each month. This practice aligned with other utility providers like Ameren.

The late fee scheme has proven lucrative, catching up some 43% of utility customers in 2022 and generating over $210,000 in just the four months Aug-Nov.

The new law would change late fees and due dates, but only for low income customers who pass a 6-part test (see pix).

The city-owned public utility service is famous for rate hikes and cash reserve stashing, so much so that former deputy city manager Tony St. Romaine publicly bragged it was so lucrative, utility profits could pay for "shovel-ready" private development land such as that the city sold to Aurora Organic Dairy at a one-million loss to taxpayers.

See pix below for more details.