One thousand residents in the City of Fredericton are at risk of having their water shut off by city officials, after they fell behind in payments during the COVID-19 pandemic. Now, the city is saying that outstanding and overdue bills have reached almost $1.5 million and are impacting its ability to cover operating expenses.
Speaking to city council on October 19, Alicia Keating, assistant director of corporate services and acting city treasurer, told councillors that not a single customer has had their water shut off due to non-payment since the pandemic ramped up in March. Now, she’s encouraging staff to end the leeway and restart the shut-off process, giving property owners a notice of shut-off and then one additional week to make payment.
“We do have bills to pay on our own, and we need that cash flow in order to do that,” Keating told councillors during a committee PowerPoint presentation. “There have been a number of customers who have decided that we are not a priority to pay the bill.”
The move to step up and collect on water bills follows in the recent footsteps of the City of Saint John, which took action to collect on 1,871 overdue accounts totalling $5.2 million as of mid-summer.
This problem is not unique to Canada. According to a recent report by The Guardian, two-fifths of U.S. residents rely on water utilities which have not suspended a policy of shutoffs for non-payment, placing millions at risk of losing water during the pandemic.
Typically, Fredericton’s bills are sent out quarterly, and people are given 90 days to pay or risk having their water cut off.
Keating said the city often has a recurring group of about 30 residents, or “frequent flyers”, who don’t pay their bills until they receive a shut-off warning. She hopes that under the current circumstances, many residents will find a way to prioritize the water bill payments once the shut-off warning is received.
Prior to the warning being sent out, Keating said that only 17 of the 1,000 customers who have fallen behind on their water bills have reached out to the city to make payment arrangements.
During her presentation, Keating also noted the increase in water consumption among residential customers. During the pandemic, residential consumption has spiked 7%, she told councillors. Commercial and industrial water consumption has dropped 2%, while government and institutional consumption has dropped 5.1%.
Next year will be the first in Fredericton since 2013 that water and sewer rates will not rise.
Keating told the committee that staff have made efforts to reach numerous customers by mail and phone, “but very few are answering our phone calls,” she said.
Keating added that the Fredericton utility is entirely “self-funded” and provides water service to about 18,000 customers.
“Personally, I think that people think their water is not going to get shut off during a pandemic, so ‘I’m going to keep the money in my pocket’,” said Keating.
Councillor Bruce Grandy said he supports sending out shut-off notices, however, wondered if there was a way to open communications with residents who may sincerely be struggling to pay bills due to financial hardship as a result of the pandemic.
Councillor Henri Mallet agreed that certain individuals may be taking advantage of the system, but also acknowledged that some Fredericton residents are indeed struggling financially.
“Right now, this is a tough sell for me,” Mallet told the committee, noting that the pandemic is still ongoing.
New Brunswick has had one of the lowest COVID-19 transmission rates in Canada, officially recording just over 300 cases in total.
Councillor Stephen Chase warned about the staff time used to collect the water bills as well as the time that could be spent trying to understand individual circumstances around non-payment.
“I think we’ve been nice about this and don’t think we’re being more nice by letting it drag on, frankly,” Chase told the committee. “I think we’ve demonstrated that we’re very reasonable people,” he added.
Other councillors wondered whether the non-payment issue would simply get worse as more and more residents learned about the lack of consequences, should no notice action be taken.