OCEAN SPRINGS, MS – Ocean Springs residents who miss their monthly water bill deadline are being hit with a 15% late fee and, in many cases, an additional $40 “service fee” — despite the fact that neither charge appears in the city’s adopted utility ordinance.
Residents who pay after a certain time are added to a disconnect list. Being added to the list results in a mandatory $40 fee, regardless of whether services are actually disconnected.
City officials describe these charges as “policy,” but under Mississippi law, only the Board of Aldermen has the legal authority to approve utility fees. The city’s current fee schedule, adopted by formal resolution in October 2024, contains no reference to either the 15% penalty or the $40 administrative fee.
The practice may be resulting in tens of thousands in monthly fees that lack clear legal authorization – and could expose the city to significant legal scrutiny or liability.
What the Ordinance Says
According to the official document titled “City of Ocean Springs Adopted Fee Schedule”, the only water department penalties for late payments are:
- $20 Disconnect Fee – charged if service is physically turned off,
- $20 Reconnection Fee – charged when service is restored,
There is no mention of a 15% late fee.
There is no mention of a $40 charge for being placed on a cutoff list.
By law, that means the city is not authorized to collect either fee.
What the City’s Website Says Instead
The city’s Water Department policy page includes the following statement:
“Any payments made after 5 pm the day before the cutoff will be subject to a $40 service fee and will still be cut off. The balance on the day of the cutoff has to be paid in full to be reconnected… A 15% late fee will be applied on the 16th.”
The text is difficult to interpret and appears internally inconsistent. It suggests if a resident pays in full after 5pm the day before cutoffs are scheduled, they will still be assessed a $40 penalty and their water could still be cut off the following day – even with a zero balance.
Documented cases show the $40 service fee was forced to be paid even in circumstances where the full bill was paid and no cut off took place.
Staff Confirm: Fee Is for ‘Being on the List’
In a call with a city billing supervisor, a resident who paid their water bill on the morning of the cutoff date — before service was disconnected — was still required to pay a $40 “lock-out” fee. When asked what the fee was for, the staffer confirmed:
“We charge everybody $40 that is on our cutoff list.”
She explained that the fee is automatically added when cutoff lists are generated — regardless of whether service is ever interrupted. When the resident pointed out that the city’s adopted fee schedule only authorizes a $20 fee when service is actually disconnected and a $20 reconnect fee when service is actually reconnected, the supervisor acknowledged the discrepancy.
“I’ll have to pull [the policy] up and send it to you,” she said.
Later, the city emailed a link to the Water Department policy webpage, which states the $40 fee applies to any account paid after 5 p.m. on the day before cutoff. No explanation or citation was given to show how the charge is authorized under city law. The supervisor did not respond to a reply asking for those details.
Only the Board Can Approve Fees
Legal experts say the city’s practice of enforcing “policy” fees without Board approval violates Mississippi law. Under Miss. Code Ann. § 21-27-23(e), municipalities may only collect utility fees that are:
- Formally “fixed” by ordinance or resolution,
- Approved in open session by the governing body (the Board of Aldermen), and
- Published or made available to the public.
Anything less is unlawful.
Simply posting a rule online — or following a department habit — does not create legal authority to collect money from residents.
Statutory Conflict and Legal Concerns
Attorneys GC Wire reached out to also warn the charges may violate the Mississippi Consumer Protection Act, which prohibits:
- “Unfair or deceptive trade practices,” including
- Charging fees that are not clearly disclosed or not legally authorized.
If the city has been charging these fees for years without proper board adoption, it could face class-action litigation, refund demands, or oversight from state officials.
The city’s website states that approximately 7,800 meters are read monthly. Based on industry averages, anywhere from 10% to 20% of accounts may incur late fees each month.
That means as many as 1,500 residents could be paying:
- A 15% late fee, and/or
- A $40 “service fee” even when services are not disconnected
Monthly revenue from these unauthorized charges could exceed $25,000, with annual totals in the hundreds of thousands — all based on internal policies never approved by the Board of Aldermen.
No Response from Officials
GC Wire requested documentation showing where the 15% late fee and $40 service fee were formally adopted. As of press time, no such ordinance or resolution has been provided, and city officials have not responded to follow-up inquiries. If such Board approval exists, the city has yet to produce it.
Mississippi law is clear: municipalities cannot charge fees that have not been lawfully adopted. Ocean Springs’ use of internal policies in place of board-approved ordinances may raise concerns about transparency and accountability — it may also violate state law, expose the city to legal liability, and entitle residents to refunds for charges they were never legally obligated to pay.
(EDITOR’S NOTE: This issue came to GC Wire’s attention after I — admittedly — forgot to pay my water bill on time and was charged a $40 service fee, even though my water service was never disconnected. That experience prompted further investigation, which revealed that both the $40 service fee and the 15% late penalty is not legally authorized under the city’s adopted fee schedule ordinance.
GC Wire remains open to publishing any documentation that shows the 15% late fee or $40 service fee were formally adopted by ordinance or resolution, as required by Mississippi law. City officials are invited to provide such records or clarification for inclusion in a follow-up report.)
Well done sir! 👏👏