A California company that handles sewer billing for the Chattanooga area is seeking to salvage relations with residents who have been assessed processing fees when paying their bills online, over the phone or at retail locations.
ENCO Utility Services contracted with Chattanooga, the Hamilton County Water & Wastewater Treatment Authority and Rossville for sewer billing services in August 2012, after Tennessee American Water Co. said it would stop providing the service at the start of 2013.
In an email to city officials and media Tuesday, Ruby Irigoyen, president of customer service for ENCO, said previous news reports that the company pocketed $3 fees levied on residents who paid online or over the phone, and an average $1.88 fee paid by residents who paid at retail locations, were false.
She said those fees go straight to merchant banks that handle the transactions online and over the phone, or to financial networks in the case of in-person payments. In this case, the processing service is Collector Solutions Inc. and the underlying bank is the First National Bank of Central Texas, Irigoyen said in an email.
"When a customer goes online to make a payment it goes to the site. ... When they click the button to actually make the payment, it's directed to a secure site that goes to a bank. That's where the $3 fee is paid," Irigoyen said in a phone interview Wednesday. "None of that money goes to ENCO."
Before Tuesday's email, Irigoyen had not responded to multiple emails and phone calls from reporters from between October 2013 and the end of March.
Irigoyen said the only money ENCO sees is the $1.42 per bill it receives from Chattanooga, WWTA and Rossville for its services. But bill by bill, $1.42 adds up.
In 2013, Chattanooga paid ENCO $912,956 for processing 642,927 bills, according to city records. At the same time, 423,950 of those bills -- fewer than half -- actually were paid, generating $28,111,756, according to payment records produced by ENCO.
But city taxpayers pay $1.42 for each bill sent -- even the ones that don't get settled.
In the first two months of this year, the city paid $162,100 for 114,155 bills.
Chattanooga spokeswoman Lacie Stone said the city expects to spend about $973,000 by the end of 2014 for about 57,078 monthly bills.
WWTA produces about 10,000 bills per month and pays ENCO an estimated $170,400 annually. Rossville generates about 5,000 bills monthly and pays ENCO $85,200 a year.
Irigoyen said before the ENCO contract was signed with Chattanooga under then-Mayor Ron Littlefield, the company suggested that the city incorporate the fees into the sewer rates. This would make for less confusion with customers.
"It's a normal thing. Most companies, not all but most, embed the cost of providing that service in the cost of the services they sell," she said. "[The Littlefield administration] chose not to do that for a specific reason. They had not been in the billing service for many years, so they had no idea how much that service was going to cost."
She said ENCO would investigate how incorporating the fees in Chattanooga would impact the rates.
Brent Goldberg, the city's deputy chief operating officer, said clarifying where fees go for the public is good, but it doesn't change the city's plan to start handling its own sewer fees.
He added that who gets the extra money doesn't matter much to residents -- residents just don't want to pay fees.
"From a customer service perspective, people are frustrated that there's no place to go to pay their bill in cash without a fee," Goldberg said. "We are just trying to make sure that the customers get great customer service, that they pay their bills in many ways without fees."
According to the contract, Chattanooga has to give ENCO 360 days' notice of termination, which means the fees would stay into 2015.
Goldberg said ENCO is doing exactly what it is contracted to do, but the new administration wants to try something different. He added that earlier issues with late billing and customer confusion have been ironed out.
Contact staff writer Louie Brogdon at firstname.lastname@example.org or at 423-757-6481.