City of Wheeling To Pass On Service Fee for Utility Payments by Credit Card
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WHEELING -- The city of Wheeling is putting a stop to somewhat of a leak in its water and sewer utilities -- not from its transmission lines, but in the payment collection system.
For a number of years now, the city has been charged a service fee for many customers who chose to pay their utility bills with a credit card. Initially, the city had simply taken the hit and covered the fee -- which typically is in an amount that is a percentage of the bill that is being paid.
That small percentage of money adds up over time, and when hundreds or even thousands of customers are paying with credit cards and are being charged a fee each time, the total cost creates a hemorrhage in revenues in the city's utility departments.
"For the past several years, the city has accepted credit cards for water and sewer payments," Wheeling City Manager Robert Herron said. "There is a fee associated with that charge. The city has been absorbing that fee for at least the last three or four years. It's gotten to the point where that fee is $120,000 per year, and it's not fair to the system that that fee be absorbed."
Members of Wheeling City Council recently took action to stop this loss by placing a new policy on the books that would make customers paying with credit cards responsible for covering any extra fees charged for these utility payments.
An ordinance passed by city council last week establishes a service fee for credit card and other electronic payments of water and sewer utility bills issued by the city.
"A service charge will be imposed on credit card and other electronic payments," according to the new water and sewer tariff provision added to the language on file with the West Virginia Public Service Commission. "The amount shall be equal to the actual charges to the utility from the financial institution for processing payment."
Herron explained, "So if someone is to pay with a credit card, whatever credit card fees would be charged would be paid by the customer."
The fees are to become effective 45 days after the ordinance was officially enacted.
Vice Mayor Chad Thalman said that "essentially residents that pay with a check are subsidizing the ones who pay with credit cards."
This adjustment is expected to save the city a significant amount of money, and the policy of passing along these credit card fees to the customer is similar to the way many private businesses handle such charges.
"It's no different than what other businesses do," Councilman Dave Palmer said. "They charge back fees -- I know some restaurants will do the same thing. They'll have a notice that if you pay with a credit card, you'll be charged 3% or 3.5% extra. So it's no different than what is already transpiring throughout the city in places."
Wheeling City Council held a required public hearing on the service fee for credit card and electronic payments for water and sewer utility bills during its Sept. 5 meeting. However, there were no customers who came forward to speak.
Officials noted that municipal water and sewer customers can pay their bills by other means to avoid these fees altogether -- whether it is paying by check or even making payments online.
"You can still get online and use your checking account to pay, and there's no fee," Palmer said. "This is only if you're using a credit card."