Lexington, KY – The city of Lexington will now spend nearly three-quarters of a million dollars annually for residential billing after its split with Kentucky American Water.
It was announced during a news conference Aug. 3 that the city is now responsible for sending out a consolidated bill for services such as sanitary sewer, landfill and water quality management fees. The charges will be under the name “LEXserv.”
The new billing practice – which will begin Sept. 1 and be distributed to approximately 115,000 area citizens – will encompass areas that currently appear on one consolidated bill provided by Kentucky American. But the water company announced in October of 2011 that it would no longer provide the service, for which Lexington paid $1.7 million annually. The company then agreed to a six month extension.
“I continue to be deeply disappointed in Kentucky American’s decision,” Lexington mayor Jim Gray said. “We will continue to rely on the company to provide data on water usage in order to process the new bills.”
Gray said there would be no increase in the fees for the services the city provides, which ranges from $4.49 monthly for the water quality management fee and $4.50 for garbage to a per-use fee for sewer. The standard penalties will apply to customers for late or non-payment.
The city, however, will now have to pony up an additional $700,000 to distribute the new bill. Lexington has retained Cincinnati Water Works to handle the service, which will be paid out of money collected from the fees it is billing, which normally totals $65 annually. Lexington-based Blue Grass Mailing will handle the physical preparation and delivery of the LEXserv bills.
Charlie Boland, external affairs specialist for Kentucky American Water, said the decision for the company to cease providing the unified bill came down to three reasons. First he cited concern over confusion with customers who would contact call centers will questions regarding non-water-related fees. He also said the organization decided the timing was right to return to its core business model – that being a water company and not a third-party billing agency.
Just as important, however, was a recent major IT upgrade the company underwent. Boland said decisions had to be made as to what that upgrade would include and the additional expense outweighed the inclusion of the necessary technology added into the new IT system to justify continued third-party billing. The new system went live Aug. 1 and he said if it had included third-party capabilities then American Water’s charge to the city would have increased past that $1.7 million annual fee.
Boland said the change wouldn’t impact water service for customers and that readdressing or reversing the decision is “highly unlikely,” as the company is also in the process of exiting similar arrangements it has with other local governments.
“It’s about our business streamlining,” Bowland said. “We’re a water company and it was a business decision to get back to our core business. “
Multiple options will be available to pay the bill, ranging from having the fees automatically drawn from a bank account to the age-old practice of mailing payments. It can also be paid online at www.mycheckfree.com or by visiting city hall at 200 East Main Street. Online payments as well as those made over the phone or at retail customer centers will also include a nominal service fee.
“Of course I’m upset Kentucky American has made this decision during these really tough times for our city,” Gray said, “but, as I said, sometimes you’ve got to try your best to look at the glass as half full and you’ve got to make lemonade out of it.”