Norwich — The City Council on Monday opted to offer property taxpayers and Norwich Public Utilities ratepayers a low interest rate on any delinquent bills, one of two relief options Gov. Ned Lamont called for in an executive order.

The governor ordered cities and towns to offer either full tax payment deferrals for 90 days or reduce the interest rate on delinquent taxes and municipal utility bills from the usual annual rate of 18% to no more than 3%. Property taxes for the next fiscal year are due July 1, with delinquent interest charges starting Aug. 1. The tax payment deferral would have made bills due by Oct. 1 before interest could be charged.

City officials said a 90-day deferral would be unrealistic financially for both the city and NPU, potentially reducing NPU’s cash reserve by 47%, NPU General Manager Chris LaRose told the City Council on Monday. Council President Pro Tempore Mark Bettencourt said the 90-day tax deferral could force the city to borrow money to ensure cash flow.

City Comptroller Josh Pothier said he could find no record of the city ever seeking tax anticipation notes — a loan paid off by future tax revenue — to cover operating expenses.

LaRose said the 90-day deferral could hurt ratepayers, because, unlike property taxes, customers pay utility bills every month. A 90-day deferral would leave customers with large bills due Oct. 1 at the full 18% interest. NPU has stopped utility shutoffs for delinquent bills and encourages customers to work out payment plans.

“We’re doing our best to minimize the impact as much as we can,” LaRose told the City Council. “And we’re working with our largest customers to pay what they can.”

c.bessette@theday.com