2017 Utility Fee Survey Results – Part I

For the past few months, I’ve been conducting the 2017 Utility Fee Survey. This is an update to the original Utility Fee Survey in 2012 and the 2015 Utility Fee Survey. The survey was designed to research what fees utilities charge, how much they charge for each fee, and to see what changes have taken place in the last two years.

The Utility Fee Survey has become a biennial survey, alternating years with the Utility Staffing Survey.

As was the case in each of the previous surveys, the results include too much information for a single issue. If you’re interested, here are the results from the 2012 and 2015 Utility Fee Surveys:

 

2012 Utility Fee Survey Results – Part I

2012 Utility Fee Survey Results – Part II

2012 Utility Fee Survey Results – Part III

 

2015 Utility Fee Survey Results – Part I

2015 Utility Fee Survey Results – Part II

2015 Utility Fee Survey Results – Part III

 

This is the first of three consecutive Utility Information Pipelines publishing the results of the 2017 Utility Fee Survey.

Demographics of survey respondents

118 utilities (an 11.3% increase from 2015), representing 19 states, ranging in size from 88 to 75,000 active accounts participated in the survey. Click on the links below to see charts of the various demographic data:

Number of responses by state

Size of utilities responding

Size of utilities under 20,000 accounts responding

Types of utilities responding

Services provided by responding utilities

Positions of individuals completing survey

Tap fees and impact fees

The survey started with water and sewer tap and impact fees. There are some key distinctions to bear in mind when comparing tap and impact fees.

Tap fees should recover the cost of making the actual water or sewer tap. This includes direct costs such as labor, materials and vehicle use as well as any indirect costs associated with completing the tap. Tap fees are classified as operating revenues.

Impact fees, sometimes called availability fees or system development charges, are designed to cover the incremental capital cost of adding an additional user to the water or sewer system. Impact fees are classified as non-operating revenues.

For utilities charging an impact fee based on number of bedrooms, monthly or daily usage, or square footage, I assumed three bedrooms or 3,000 gallons per month or 1700 square feet.

Residential water tap fees charged by utilities responding to the survey range from $50.00 to $10,925.00 as shown below (clicking on the any of the graphics will open a larger image in a new window):

Two other utilities charge based on the time and materials cost incurred for a residential water tap – one at actual cost and one at cost plus ten percent.

Utilities responding to the survey charge residential sewer tap fees ranging from $50.00 to $15,000.00 as depicted by this graph:

One additional utility charges the actual time and materials cost incurred plus ten percent for a residential sewer tap.

Residential water impact fees charged by utilities responding to the survey range from $200.00 to $3,900.00 as shown in this graph:

Two additional utilities charge water impact fees that vary based on construction.

Utilities responding to the survey charge residential sewer impact fees ranging from $200.00 to $5,100.00 as shown here:

Three additional utilities charge sewer impact fees that vary based on construction.

Upcoming issues

Part II – August 1, 2017

The next issue will deal with delinquent account fees and policies, including late fees, cut-off fees and after hours reconnect fees.

Part III – August 15, 2015

The final survey results issue showcases any remaining fees, including application, returned check, meter reread, meter tampering and convenience fees.

A special offer

I’m offering a special offer to the first five Utility Information Pipeline readers who respond. If you are one of the first five to respond, I will conduct a personalized fee consultation for one-third off the regular price. That’s $1,000 rather than the usual $1,500 price for this service!

I will review your utility’s current fee schedule and conduct an in-depth phone assessment to learn more about your fees. You will receive a presentation quality document illustrating how your fees compare with other utilities. Also included will be my recommendations for revising any existing fees and suggestions of new fees you should consider charging.

If you are interested in this special offer, please contact me by calling 919-232-2320 or e-mailing me at gsanders@logicssolutions.com. Remember, the special discount offer is only available to the first five people who respond!

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© 2017 Gary Sanders

5 easy ways to get more bank draft customers

Recently, during a sales presentation, I came to the bank draft tab in Logics’ Utility Management application. I asked, as I always do, if they accepted bank drafts. The City Administrator spoke up and said he wished 99% of their customers were bank draft customers. When I asked why not 100%, he replied “There’s always that one percent that won’t do it, no matter how much sense it makes.”

After everyone stopped laughing, one of the office staff asked if I had any ideas how to increase bank draft participation. Interestingly enough, I had just finished the first draft of an ebook entitled 5 Surefire Ways to Save Time Processing Payments. The first of the five ways is bank drafts and the chapter goes on to list five ways to promote bank drafts.

Here they are…

1. Waive the first late fee in exchange for signing up for bank drafts

Whenever a customer calls to complain about being charged a late fee, offer to waive the penalty if they sign up for bank drafts. Once they are a bank draft account, they will never be late again!

2. Offer incentives to sign up

I know of utilities that offer a one-time $5.00 credit for signing up for bank drafts. Others give a $1.00 per month credit for the first year the customer is drafted.

3. Ask every new customer if they want to pay by bank draft

Have you applied for a life insurance policy recently? Insurers practically make issuing the policy contingent upon the insured agreeing to pay by direct debit. Why not deal with new customers applying for service the same way? There’s an age-old adage in sales, “assume the close”, and the same technique can work for signing new applicants up for bank drafts. Why not hand them a bank draft form along with the application to sign?

4. Include a signup form on your website

Ideally, your customers should be able to complete an online form with the bank draft information. But, if not, at least post a downloadable sign-up form on your website so your customers can complete and return it to your office.

5. Promote bank drafts on your utility bill

Does your utility bill have a section for comments you can enter each billing? Why not use this to publicize bank drafts along with whatever other announcements you have that month? If you print full-page bills, you can also include a bank draft sign-up form as an insert with the utility bill.

How do you promote bank drafts?

What does your utility do to promote bank drafts? Do you have a unique or innovative way of encouraging your customers to sign up for bank drafts? Please leave a comment at the bottom of this post for other readers to see.

2017 Utility Fee Survey results

The next Utility Information Pipeline, to be published on July 18, will include the first set of results for the 2017 Utility Fee Survey. The survey technically closed at the end of the day, June 30, but I haven’t started recapping the results yet.

If you haven’t participated and would still like to, you may click here to complete the survey. It should take less than five minutes to complete.

Trying to streamline payment processing?

If you’re looking to reduce the amount of time it takes to process payments, or streamline any other part of your operation, please give me a call at 919-232-2320, or email me at gsanders@logicssolutions.com for more information about how a business review could help you review your entire office operation.

 

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© 2017 Gary Sanders