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The Cost of Door Hangers—Utility Terminations


June 13, 2013
Category: Utilities - Billing and Collection

The Cost of Door Hangers—Utility Terminations

An article titled "No More Door Hangers for Final Notice" that appeared in the Beacon Hill Water and Sewer District Connection, Winter 2012-2013, caught my attention. I wondered how many utilities still hand delivered final notices. The answer is a lot. For many utilities, delivering a door hanger notice is the last step in the delinquent utility account process before disconnecting service to a residence. The door hanger states that the account is delinquent and service will be terminated unless payment is arranged within a specified number of days or an appeal is filed.

Door hangers must be hand delivered, which requires staff time and generally the use of a vehicle. For some customers, this has basically become a hand delivered reminder program. While past due accounts receive other notifications by mail, the number of customers who wait until they get the door hanger to pay in full has been growing—along with the overhead costs for hand delivering notices.

Beacon Hill looked closely at the impact of hand delivering these door hangers. In December 2012, preparation and delivery of these reminders involved five district employees, and the cost to ratepayers was approximately $2,000 a month. Projected, the cost would be $24,000 a year, and it only benefited 3% of its customers. The district decided to stop delivering door hangers. Instead, the mailed final notice letter will include the planned lock-off date. If accounts are not brought current by that date, the customer will be disconnected for non-payment with no further notice.

Two jurisdictions stopped using door hangers as a risk management measure to protect employees from being physically and verbally abused by angry customers. One jurisdiction restructured its debt process, and its delinquency rate dropped by 50%. The other opted to charge $15 for a final notice letter.

Here are a few fees being charged by some cities for delivering door hangers:

Black Diamond charges $10 for a door hanger warning; $20 for a door hanger with a shut off notice;

 

Mercer Island and Prosser charge $25;

 

Grandview charges $5;

 

Olympia and Bainbridge Island charge $10 to send a delinquency warning.


MRSC is a private nonprofit organization serving local governments in Washington State. Eligible government agencies in Washington State may use our free, one-on-one Ask MRSC service to get answers to legal, policy, or financial questions.

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