A city committee has nixed the proposal to collect utility bill payments online.

The service would have cost the city more than $7,000 in its first year and would not have been utilized by many residents, according to City Administrator Russell Rost.

Included in the costs are the purchase of the software to allow for online payments for $4,500, an annual service fee of more than $3,000 and there would be a $1.25 processing fee per transaction.

Aldermen considered passing the transaction charge onto customers.

Now, the city accepts water and trash bill payments by check, credit or debit cards, or through a direct deposit from a bank account.

However, Rost has explained that some banks contract their direct deposits with another company.

The contracted company sends a check to the city to pay the utility bill, but sometimes the check comes from out of state and is received after the bill’s due date.

The online payments could cut down on late fees and shutoffs, and would be more convenient for some residents.

However, Rost said much of the feedback on the proposal he has heard is against spending the city funds.

“A lot of people don’t think the city should spend the money,” said Rost. “They said the annual fee is not worth the benefits.”

Alderman Vicki Jo Hooper asked if there would be a reduction in labor costs if the city allowed for online payments.

“I don’t think in the long run it is going to be a savings in staff,” said Rost.

Mayor Mike Livengood noted that online utility bill payment was proposed not as a cost saving measure, but as a convenience to residents.

The discussion was prompted by a request from a resident who was assessed a late fee because he could not pay his bill while out of town.

Rost explained that is the primary benefit of the online payment is to those who are traveling and need to pay their bills.

Now, some residents who are out of town call before the bill is due and make a payment by giving credit information over the phone.

That information must be approved by Rost or City Clerk Jonita Copeland.

Each month there are about 450 residents who utilize the direct deposit payment method, or who pay with a debit or credit card.

If residents who travel utilize the direct deposit payment method, they may not be charged a late fee if they are out of town, officials said.