Bethlehem Town Board members listened to arguments for adopting an automated bill payment processing system on Wednesday, March 28, but will be taking more time to review the proposal before making a decision on using a Lockbox system.
A Lockbox is something many people already use, though they might not realize it. In this instance KeyBank offers the service. The bank would pick up payment checks mailed to a PO box, open them, scan the checks, make the deposits and electronically deliver the information to the town.
The proposal on the table is to use Lockbox for water and sewer payments, 70 percent of which are made by mail. At this time, Receiver of Taxes Nancy Mendick transports the checks to KeyBank for deposit after they’ve been processed at Town Hall.
The benefits, said Comptroller Michael Cohen, include the fact deposits would land in the bank at least a day faster and some labor would be taken off of the receiver’s office, where there are three full-time employees.
Using Lockbox wouldn’t cost the town anything, said Cohen, because KeyBank offers it as a service paid for by credits the town accumulates via non-interest-bearing accounts. In 2011, $32,000 worth of credits expired because they were not used, and the total annual cost for using Lockbox is $24,450. The town would be able to stop use of the service at any time without penalty.
The town has relationships with six different banks.
Mendick stood at the start of the meeting to voice her concerns about the Lockbox system. She said after speaking with other receivers she’s troubled about exactly how accurate the system would be.
She related her own experience, saying on one occasion a resident mailed an insurance payment of $50 into the town instead of a tax payment of $3,500, having mixed up the envelopes. While Mendick caught the error, the insurance company’s Lockbox service cashed the $3,500 check despite the fact it was made out to the town, tying up that money.
“As you can imagine, this taxpayer was not happy with the insurance company’s Lockbox system,” Mendick said.
Cohen said in its review, the town contacted officials in the City of Albany and Rensselaer County, both of which use Lockbox, and received glowing comments about the system’s ease of use and accuracy.
Cohen added the optical character recognition technology used by Lockbox has become much better in recent times, and said the town would be able to set rules for the handling of checks so that any payment with a possible discrepancy would be sent to the Receiver’s office to be processed.
“I think a lot of Nancy’s concerns may be stemming from older issues years ago,” he said.
Any cost savings to the town were not discussed in detail, though if staff spends less time processing payments there would potentially be staffing implications. Supervisor John Clarkson said he is opposed to making any layoffs but shrinking staff through attrition is definitely on the table.
“We’re not saying we’re going to make any reductions in staff now … but it is a major workflow reducer,” he said of Lockbox.
Clarkson expressed his support for the system, but other board members were less enthused. Councilman Kyle Kotary said he’d like to here more testimonials from other municipalities, and also wondered at the size of the benefit to the town.
“What is the real savings to the town? A credit is a credit,” he said.
After the meeting, Mendick said she is still opposed to the Lockbox system, but if the Town Board decides to adopt it she would work with that decision.
“I like the way our office is now, I think we offer good service and I’d like to continue it,” she said.
