AMU defends proposed billing fee increase to the City of Atlantic

News

February 7th, 2013 by Ric Hanson

The General Manager of the Atlantic Municipal Utilities (AMU) and Mayor of Atlantic sat down during a press conference Thursday afternoon, to clarify statements made by City Administrator Doug Harris during Wednesday night’s City Council meeting, with regard to an increase in the fees charged to the City for the sewer billing rate.

AMU Gen. Mgr. Steve Tjepkes (left) and Atlantic Mayor Dave Jones (right) discuss the fee AMU charges the City for sewer billing. (Ric Hanson photo)

Steve Tjepkes refuted the claim by Harris that the 90-cent rate adjustment is attributable to AMU’s new billing system, which was unveiled in December. He said their old billing system had been in-place for over 30-years, and the cost of implementing the new billing system was made by offsetting cost savings. The maintenance, or ongoing cost of the new system he says, costs the same as the old. He said neither the rate increase or the charges they have proposed to the City, was a result of the new billing system. Tjepkes said over the last several years, AMU has charged the City 10-cents per bill, per month, to maintain more than 3,100 sewer accounts and billing processes. He said that rate doesn’t even cover a third of today’s postage rates.

The proposed increase from 10-cents to $1.00, he says is based on the actual cost to AMU to service those accounts. If the fee increase is approved, the annual cost to the City would jump from $3,730 per year to $37,300 per year. Ultimately, the increase will be passed along to AMU’s electric and water customers. Tjepkes said the fee increase he discussed with Harris was a proposal, and not an ultimatum.

Mayor Dave Jones said his reaction, that AMU had “Gone overboard” on the rate increase and should re-calculate their costs, was based on the information presented by Harris, and the shock of going from 10-cents, to a dollar per billing.  He said after discussions were held this (Thursday) morning, he feels the dollar amount is “reasonable,” that the City couldn’t do it any cheaper, and it is “just the cost of doing business.”

Jones said the matter will be placed before the City’s Personnel and Finance Committee for discussion, before anything is agreed to as far as billing costs. If the increase is approved, it would be billed in July, retro-active to January 1st. Jones said it’s likely the proposed increase would be passed along, and on top of a sewer rate increase already planned for later this year.

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The text of the Press Release from AMU is as follows…

“In the last several years, AMU has charged the city $.10 a bill per month to maintain their sewer accounts and billing processes. As most people can understand, $.10 doesn’t even cover a third of today’s postage. The services provided by AMU to the City of Atlantic include the labor costs of setting up and maintaining over 3,100 sewer accounts, processing new and final billing account adjustments each monthly, billing the monthly service, the collection of the accounts and the accounting for the funds billed and collected. In addition to the labor costs, there is the cost of the physical bills, envelopes, postage and printing costs.

The increase in the sewer billing rate from $.10 to $1.00 is based on the actual cost to AMU to service these accounts. AMU isn’t asking the city to cover the full third of the cost of billing the sewer services. However, in fairness to AMU’s customer, the Utility Board doesn’t feel that AMU should continue to build the full cost of the sewer billing into their electric and water rates.

There was a statement made that the rate adjustment is a result of AMU’s new billing system. AMU’s billing system had been in place for over 30 years and the cost of implementing the new billing system was made by offsetting cost savings. The maintenance of the new system is the same as it has been in the past. So, neither the recent AMU rate increase nor the increase in what AMU charges the city for processing their sewer billing is related to the new billing system.

Prior to suggesting the change, AMU checked with other municipal utilities of similar size to research how they are handling billing. Though no utility is the same, their proposed rate is more in line with how other utilities handle billing for their cities.

AMU would be happy to continue to process the sewer billing for the city, but if the city chooses to do it themselves that would be their choice.”