Executive Order 142 (EO 142), which extended Executive Order 124 (EO 124), expires on July 29, 2020. Both orders prohibit local governments and public authorities from terminating for non-payment many of the utility services they provide to residential customers. What happens, then, on July 30? What are local governments and public authorities permitted to do in order to collect the charges for services that have been accruing since the original order went into effect on March 31?
EO 124, as amended by EO 142, requires local governments and public authorities to offer payment plans to all residential customers with balances outstanding as a result of these accrued charges. The order states that the payoff period should be at least six months, with the payoff period calculated beginning when the order expires, so assuming that EO 142 is not extended, and is allowed to expire on its stated expiration of July 29 at 11:59 pm, the plans’ payoff period would begin as of July 30, 2020. Therefore, you should make every effort as soon as possible to develop payment plans to offer to your customers beginning July 30. Beyond that, the orders dictate very little about what these plans should look like. Following are some of the common questions units have about payment plans and life after EO 142 expires.
What charges and balances can be included in the payment plan?
The plan should include any amounts accrued for charges for services during the time period the orders were in place (March 31 – July 29). No fees, charges, penalties, or interest may be billed or collected for late payments or non-payments due during the orders. The plan may include any returned check fees that the customer incurred. Any amounts unpaid before the order went into effect do not need to be included in the plan but may be included if you choose to do so. If these previous past due amounts are not included in the plan, the unit should make separate arrangements with the customer to get that amount paid as soon as possible.
What terms should the unit be offering under the payment plan?
The orders don’t really speak to any details about the terms of the repayment plan, so the unit gets to set the terms. The only expectation is that the customer be given at least 6 months to pay charges accrued during the time the orders were in place, with a default payoff period of 6 months. The unit can set up equal monthly payments, require a payment against the outstanding balance every other month, or any other arrangement it wants to allow within the payoff period. We strongly recommend that units require a payment toward the outstanding balance each month plus payment of the current month’s outstanding bill in full. This way, the customer will be caught up at the end of the payoff period. If the unit is on a bi-monthly billing cycle, then a bi-monthly payment toward the outstanding balance should be required, in addition to payment of the current bi-monthly bill.
What information must the unit provide about the availability of the payment plan?
EO 124 requires the unit to make the information about the provisions of the Executive Order, including payment plans, available to its customers in a reasonable manner.
What if a customer refuses to sign up for a payment plan?
If a customer has an outstanding balance but refuses to sign up for a payment plan, the unit can and should enforce its usual collection policies, up to and including disconnection of services.
What if a customer doesn’t comply with the terms of the repayment plan?
Again, if the customer does not comply, the unit can and should enforce its usual collection policies, up to and including disconnection of services.
What else should a unit do to prepare for the expiration of EO 142?
- Establish the terms of your repayment plan or plans and offer the plans to your customers. Units can but are not required to offer more than one plan. For example, some units have different terms based on the amount of the balance outstanding.
- Set up agreements with customers in writing if possible, and provide the customer with a copy.
- Make sure your collections policies are current, appropriate, and that you are ready to enforce them on a consistent basis.
For more information on EO 124 and EO 142, please see our COVID-19 website and look for “Other Resources – Information for Water/Wastewater Systems”.
Please contact us with questions at (919) 814-4300 or at SLGFD@nctreasurer.com.