If you’ve ever been known to stop into the Lowell Light & Power building to pay your city water and sewer bill with a credit card, you’ll need to make other plans going forward. The utility no longer accepts debit and credit payments for these city services.
“This wasn’t our call,” explains Steve Donkersloot, general manager of LLP. “[The city] requested that we do not take city water bills with credit or debit payments.”
That request came during a conversation about who should be responsible for covering the processing fees charged by card issuers. Ultimately, the city decided that rather than pay those fees, it would like the utility to stop accepting debit and credit card payments for water and sewer bills and direct those customers to City Hall instead.
City, LLP Take Different Approach to Credit Card Fees
Both the City of Lowell and LLP accept debit and credit card payments for their bills. While the city charges a fee to accept these payments, LLP does not.
Donkersloot says the utility includes the fees when calculating its operating expenses and setting its rates. “[City Manager Mike Burns] indicated to me that they haven’t budgeted for it like we have,” he adds.
Burns confirmed that’s the case and says it’s the norm for cities to charge a fee to cover the cost of processing debit and credit card payments. He says the payments are a convenience for those who use them and shouldn’t be subsidized by other water and sewer customers.
“I would never recommend that,” he says when asked whether the city might change its policy to absorb the fees in the future. However, Burns notes people can set up automatic debits from their bank account for water and sewer bills, and that service is offered free of charge.
Option to Avoid City Processing Fee No Longer Available
Some residents were able to avoid the city processing fee by paying both their electric and water bills at LLP. Donkersloot says the utility processed about $58,000 worth of city water and sewer bills in 2017. The processing fee charged by card issuers is a percentage of the bill, and the general manager estimates the total costs for processing these payments was probably around $500.
That’s not a lot of money, but “we didn’t want Lowell Light & Power ratepayers to pick up the cost of fees for water and sewer,” Donkersloot explains. He approached Burns to see about being reimbursed by the city for cost, but Burns declined and instead asked that the utility discontinue taking debit and credit payments for city services.
LLP enacted that change, starting on July 1, 2018. Going forward, anyone who wants to use a credit or debit card to pay for water and sewer services will have to do so through the city and pay a fee to cover the processing charges.