OSCEOLA, Ark. (KAIT) - Due to the financial hardship caused by COVID-19, electric companies across the country have suspended shut-offs due to bill non-payment.
Over in Osceola, those non-payments are putting in jeopardy whether or not the city can pay for the electricity to the town.
Mayor Sally Wilson said Osceola Light and Power buys their electricity from the Mississippi County Electric Cooperative, who, in turn, buys their electricity from the Arkansas Electric Cooperative.
Wilson said electricity is bought a month in advance because the money is collected from the city’s customers in the previous month.
With people not paying their bills because they know it will not be shut off, or if they cannot afford it right now, that puts a strain on the city buying electricity for the next month.
She said if the trend continues, the funding may not be there for the city to buy the electricity, but there is a safety net in place.
“Luckily, here in Osceola, we have a little bit of a reserve set aside that we can dip into,” Wilson said. “So that can help us a little bit, but it’s going to run out in time if things don’t change.”
She said she hopes there is enough money in the reserve to last six months, but admitted that if people do not pay their bills, it could last for a shorter amount of time.
There is also a bond, Wilson said, that would pay for a month of electricity.
Wilson hopes further relief bills passed by the United States Congress will help cities.
There is also additional funding in the LIHEAP program due to COVID-19, but officials do not know the criteria for people to apply and how much money was awarded to the program.
To cut costs, Wilson said big purchases have stopped.
“It has to be an extreme purchase before we’re making purchases right now,” Wilson said.
The city also considered temporary layoffs but decided not to go that route.
“Instead, we have gone with the program for the short-term compensation, or the work-share,” Wilson said.
It is something that employees started this week.
Wilson said that way, employees can keep their jobs and work a reduced number of hours and get paid by the city. Then those employees can apply for unemployment to help recuperate the rest of their salary.
Those employees would also receive the pandemic unemployment compensation as well.
Wilson said that police and fire department employees are not part of the group working reduced hours.