Clayton thought about fixing its bad-check problem by cutting out credit-card fees, which Town Hall hoped would encourage more people to pay by card than check. Instead, the town is likely going to raise its bad-check fee and institute a “two strikes and you’re cash” policy.
At its August meeting, the town council will consider a new returned-check policy that raises the bad-check fee from $20 to $25 and bars residents from paying utility bills by check after a second bad one.
During this year’s budget deliberations, customer-service director Ann Game proposed removing the town’s $3.95 credit-card fee, which a third-party processor collects from customers who pay their utility bill with a credit card. Eliminating that fee could help cut down on the number of bad checks coming into Town Hall, Game said. Last year, in 10 months, the town received 622 bad checks, which Game argued cut into her staff’s time.
The credit-card processor would have still charged Clayton $3.95 for every transaction, so to cover the expense, Game proposed hiking the town’s base rates for water, sewer and electricity by 33 cents each.
The council, though, decided it was willing to live with the credit-card fees and said asking everyone to pick up the tab of credit-card users wasn’t right, whether it was pennies or dollars.
The council seemed more amenable to Game’s bad-check changes.
“Awesome,” Mayor Jody McLeod said of the fee hike and tighter restrictions on those writing bad checks.
Currently, the town charges a $20 fee per bad check, but Game said state law allows for $25. After a second bad check, Clayton doesn’t accept any checks or bank drafts for a year. The proposed policy change would make that ban indefinite.
Game said the town will now hand out literature detailing the town’s returned-check policy for any resident’s first offense.
“We’re going to start doing that, I think it’s really critical so that they know the rules moving forward,” Game said. “We need to remind them; we need to just remind them.”
The policy changes are on the council’s Aug. 1 consent agenda.
The council will also consider relaxing its financing terms for utility hookup fees for new businesses. The 5 percent interest rate would remain, but businesses would have more time to pay off the balance and would be asked to put less down. The down payment would fall from 25 to 20 percent, and depending on the size of the bill, businesses would have one or two years to pay off their hookup fees. Currently, the range goes from six months for tabs between $2,001 and $5,000, up to 18 months for fees greater than $20,000.
“Town staff received a request to look at this section of the ordinance in an attempt to modify it and make it a little more accommodating of the fees that are collected at the commencement of a project,” public works director Tim Simpson said.
The change in fees would not affect real estate developers, who are required to pay utility fees up front.
Drew Jackson: 919-553-7234, Ext. 104; @jdrewjackson