Iron River's illegal late payment charges

Letter mailed today:

William J. Vajk
Iron River MI 49935
18 November 2008

Suzanne A. Johnson, treasurer
City of Iron River
106 W Genesee St.
Iron River MI 49935


Subject: Freedom of Information Act Request:

Dear Ms. Johnson:

1: Under the Michigan Freedom of Information Act please provide any documentation and records relevant to how the determination was made that the late payment charge on water bills, approximating 314% per annum, is related to the actual costs occasioned by late customer payments.

2: Under the Michigan Freedom of Information Act please provide any documentation and records relevant to how the determination was made that the late payment charge on water bills, approximating 314% per annum, is related to the actual costs occasioned by late customer payments specifically relevant to the city's "readiness to serve" charges.


Sincerely,



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Here's how it works. They add on 10% of the unpaid amount
every month. For a Readiness to Serve charge here's how the
numbers look for a year starting with an unpaid $25 and
adding 10% each month to the charge:

0 25
1 27.5
2 30.25
3 33.275
4 36.6025
5 40.26275
6 44.289025
7 48.7179275
8 53.58972025
9 58.948692275
10 64.8435615025
11 71.32791765275
12 78.460709418025

(Calculations using Visual FoxPro.)

At the end of a year, that original $ 25 has grown to $ 78.46.

78.46 divided by the original $25 yields 3.138428376721
or 314% per year compounded monthly!

Please consider that the "Readiness to Serve" charge has no
attributable expense to the city since they are providing
no services or commodity in exchange for that money. They're
charging something for nothing and then charging late fees
if that's not paid on time.

Wow! How can I get some of this action?

I have to wonder what sort of an answer "The Reporter" would
get from the city for "simply asking." Oops, I just hurt myself
laughing!

The above is the activism of Bill Vajk
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