Published: August 27, 2008 11:43 am         

LMU considers taking over billing for trash, fire protection

A seemingly simple four-page report sparked a long and often heated discussion at Tuesday’s Utility Service Board meeting.

The report, presented by consulting firm Crowe Chizek of Indianapolis, outlined options for Logansport Municipal Utilities to take over billing city residents for monthly public fire protection and trash collection.

Both services are currently billed to residents along with their property tax statements, but as the city is anticipating a reduction in property tax revenue from the state, it has begun looking at options to cut spending. If the board passes both resolutions, it would mean an annual spending reduction for the city of more than $1 million.

“I think this is one way to help the city, which has previously shown up here and asked for this money,” said board member John Davis.

The board members seemed to be in favor of having LMU take over billing responsibilities for fire protection, which would be billed out to residents at a rate of $1.91 a month. The board will consider a resolution on the issue at its September meeting, and LMU is already considering an upgrade to its computer system to handle the additional charge.

But the topic of the utility billing customers for trash collection kicked off a debate that lasted roughly an hour.

A main point of contention was a line on the report indicating that the estimated monthly administrative fee for trash billing would be 98 cents per bill.

Many board members, including Tom Slusser, expressed concern that the administrative costs could actually be much higher and that LMU would be stuck paying the difference. Members argued that the initial cost would likely be much greater as it would mean revamping the utilities’ computer systems and billing procedure.

Concerns were also raised regarding LMU’s financial responsibility should residents refuse to pay for trash collection, which Crowe Chizek’s report estimated would cost $11.72 per residence.

Mayor Mike Fincher, who was in the audience, said the problem of residents failing to pay would exist whether LMU bills for trash collection or the city does it. However, Fincher argued that residents would be more likely to pay LMU if there were consequences for failure to pay.

“If there’s no leverage there, they’re not going to pay it,” said Fincher.

When Fincher suggested that LMU could shut off utilities, utilities superintendent Paul Hartman said he would not consider that as a consequence for failure to pay nor would the board consider cutting off residents’ trash service.

Despite the potential hazards, many of the board members agreed that LMU and not the city would be the logical billing entity.

“I really do believe that, if we’re going to do trash billing, it’s got to be on the utility because otherwise people are not going to pay it,” said board chairman Jeff Muller.

In the end, the board voted 3-2 to take the matter under advisement, which Fincher said was all he was asking for. Davis and Slusser voted against the measure.

“If we’re already adjusting to bill for one, I don’t see why we can’t do it for the other,” said Davis, referring to the possible move to bill for fire protection. “If we take it under advisement, it will be in limbo.”

Carla Knapp can be contacted at (574) 732-5150 or via e-mail at carla.knapp@pharostribune.com