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Lockbox not a lock in Bethlehem

Receiver of taxes speaks against automated payment collection

— 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.

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