5,000 people at risk of losing utilities as city reinstates shut offs

Sioux Falls residents falling behind on their water and sewer bills haven't been racking up late fees or having their utilities shut off since the start of the COVID-19 pandemic.

But that's about to change.

City officials announced earlier this month that the temporary suspension of penalties on past-due utility accounts will end Sept. 1.

"As of today’s date we have approximately 5,000 accounts that are in arrears and would require a payment, payment arrangement or would be up for disconnect," said Dan Friedbaur, utility payment supervisor for the city.

When the city stopped applying late fees and shutting off water lines on March 16, just as the pandemic and business closures began hitting Sioux Falls, Sioux Falls utility customers collectively owed the city $71,000 in late fees on their water, sewer or electricity bills. While Friedbauer couldn't say exactly how much, he said that number has grown.

And in some cases, city utility customers haven't paid anything since penalties were suspended in March, which in part led to the decision to reinstate late-payment penalties, he said.

"The reason we have to start this back up again ... is because balances get too out of control," Friedbaur said. "At some point if we have to write off those kinds of balances, that gets passed on to other customers potentially (through potential future rate increases)."

In hopes of avoiding complete termination of service on those accounts and others that are behind, the Public Works Department is extending the period of time people will be allotted to pay down paying down past-due utility bills and raising the amount that triggers service termination.. 

Pre-pandemic, an account more than $50 and 50 days overdue would be flagged for termination. But now, the city will allow up to six months for customers to get their accounts caught up. However, those people should contact the city billing department to set up a payment plan, Friedbaur said.

"We want to chip away at the higher risk accounts," he said.

That could prove difficult for some, as utility payment assistance remains one of the highest needs in the Sioux Falls area amid continued pandemic- and economic-related uncertainty.

Friedbaur noted that other private utility service providers that serve Sioux Falls residents are also beginning to transition back to normal billing operations.

Janet Kittams, executive director of the Sioux Falls 211 Helpline Center, said the calls for utility assistance make up a significant portion of the calls her organizations receive every day.

"Looking at our weekly report of calls, the top three needs we had were food, rent payments and utility payment assistance," she said. "So they're still very high needs for people out there."

She credited the city, though, for loosening its termination policy and allowing installment payments to be made.

"If the cities willing to do a payment plan, that makes things a lot easier," Kittams said.

Both Kittams and Friedbaur encouraged anyone on utilities to seek out resources in the community like the One Sioux Falls fund that could be used to temporarily alleviate financial hardships.