Long Beach will soon resume charging late fees and—in the worst cases—cut off utility services to customers who don’t pay their gas, water and trash bills, according to a city memo published Friday.

Those penalties had been on hold during the pandemic in anticipation of many residents and businesses struggling to cover basic expenses, but with $7.3 million in unpaid bills still outstanding as of last month, Long Beach’s city-owned utilities said they’re going to have to start collecting if they want to avoid raising rates on paying customers.

Long Beach has not charged late fees or threatened to cut off gas, water or trash services since COVID-19 took hold in March 2020.

As an incentive to keep utilities flowing to nonpaying customers during the pandemic, the state of California picked up some of the tab, including sending more than $3 million to Long Beach, with more scheduled to come this year.

But with more than 300 businesses and 12,000 homes behind on their gas, water or trash bills, Long Beach’s utilities say that’s unlikely to cover the whole cost.

“To avoid recoupment from remaining customers through higher rates, it will be necessary to resume late fees, service shutoffs, and collections as disincentives for not paying for utility services received,” Long Beach’s city-owned utilities said in a joint memo published Aug. 19.

Penalties for nonpaying customers will be phased in slowly, according to the city:

On Oct. 1, Long Beach will start warning commercial and industrial customers that their utilities could be shut off unless they pay their bills in full or work out a payment plan with the city. Any business that stays current on their payment plan will keep receiving services, the city said.

Penalties for residential customers, however, won’t begin until early next year. The city will start by reaching out to residents with overdue bills, but it won’t shut off any home’s utilities until at least March 1, 2023.

That’s the earliest possible timeframe allowed if Long Beach wants to qualify for the state funding meant to cover unpaid utility bills, according to the city’s memo.

The city will also resume charging late fees for residential, commercial and industrial customers on that March 1 date, the memo said.

Just like with commercial customers, Long Beach says it will try to work out a payment plan with any residents struggling to pay.

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