Sean C. Morgan
A Sweet Home couple objected last week to paying delinquent water bills left behind by former tenants, launching a discussion among them, the council and city staff on the subject.
Bruce Hobbs and Monica Sanders, who own multiple rental properties in the city, told the City Council that the practice is not right during the council’s regular meeting on Jan. 9. Two of their properties have existing liens for unpaid water bills left behind by tenants.
Under new water utility policies, approved Nov. 28, no future tenant or property owner will be able to open a new water utility account until past-due water bills associated with the property are paid, whether it is by the owner or a tenant.
Among other changes in water utility policies, no one may carry a balance from month to month. Until this month, the city allowed residents to carry up to an $80 balance without shutting off their water.
“I understand the city has a utility and needs to run it as a business and they need to recoup losses,” Bruce Hobbs said. “I understand that you have the legal ability – whoever owns the property – to go after them and collect the money from them, but I do feel that it’s unfair.
“The person who is using the water is the person who needs to pay for the water. I know that puts the burden of collection back on you guys, but it is a business. You’re forcing that burden back onto the homeowner.
“I can’t shut off that water. I can’t control how much water they use. That, unfortunately, is you guys. You can’t control how much they use, but you are the ones who have the power to shut it off. I am legally bound and cannot. So if I know they are being wasteful or I know they’re not going to pay you, there’s nothing I can do about it.
Hobbs said he’s accepted the fact that tenants can run up a water bill and skip town and the city will lien his property. It’s something he’s factored into the cost of operating a rental.
“It’s still not right,” Hobbs said. “Now the fact that you’re going to be able to keep the next tenant from being able to turn on water because someone else didn’t pay the water bill, I’m afraid that’s wrong. I feel that’s an abuse of power. That’s strong-arming. While you have the right and the legal ability to do it, it doesn’t make it right. Something to think about.”
Councilor James Goble asked if he had any suggestions.
“I don’t know how hobbled you are with collections,” Hobbs said. “That’s what most other businesses have to do. If someone starts a service, a cell phone, a credit card or whatever else, you end up going through the process of collections on the person who accrues the bill. How you guys choose to go about that, whether you want to farm that off to an outside collection agency or begin working on it in house.”
He noted that the city uses a collections agency to pursue delinquent Municipal Court payments. He also said he knows of two tenants who ran up large bills and reopened water accounts elsewhere in the city.
They may have the service in someone else’s name, said City Attorney Robert Snyder.
“We do follow state law and utilize that to put the lien on the property owner’s property,” said Finance Director Pat Gray. “We send out the letters twice a year saying you have these liens on your property. If you come see us, and if there’s any past due interest or late fees, we take that off when the property owner pays them.
“We do tag the accounts, so that a person does come in and we find that they are renting somewhere else, but like Robert said, usually they’re under somebody else’s name. We will not open an account, let them start service until (they’ve paid back money) and then we refund the property owner. We have sent refunds back, to property owners’ surprise.”
“You’re talking about a lot of money,” said Councilor Dave Trask, a retired telephone technician. “I don’t know what the answer to that is. When I was employed, that’s exactly what happened. They would get disconnected and then a week later you put the service back into that same house but it would be Joe Blow instead of Johnny Smith.”
“Which is why we now ask for a rental agreement,” Gray said. “We will not open an account without a rental agreement, with a list of persons on the agreement.”
“It’s a difficult one,” Trask said. “It’s hard.”
“It is hard, but I didn’t sign up for the water, so why am I responsible for paying for the water?” Monica Sanders asked. “And I can’t turn their water off. When their bill is two months late, I can’t turn it off. They’re using the water, and I don’t have the ability to turn it off – but yet I’m going to be charged for this water.”
“It’s also hard to take a utility deposit because I don’t control the utility,” Hobbs said. “Unless I pay for the water bill, then I can’t take a utility deposit.”
Many landlords simply include water bills in the rent, Gray said.
“I have a rental also, and that’s what I do,” said Councilor Bob Briana. “You have to be pretty careful about how many people are going to be living in the house, how many kids. Do they have dogs? Do they wash cars? And then you have to go accordingly. I haven’t raised my rates yet, but if you use too much water, you’ve got to raise the rent. You could catch up somewhat.”
It’s a deeper economic discussion, but “I’m amazed at the rental rates, where we’ve gotten,” Hobbs said. “I’m not ashamed to say it, I don’t charge enough. That’s my problem.”
The city policy just adds to it, he said. “If the phone company could do that to me or if I used my phone in your house, why don’t you have to pay my phone bill. I know it’s a burden on the city too, but at the same time, the city is the one that controls it, just like a power company or a phone bill.”
“I’ve got one renter that is fantastic, that pays her bill, but she’s going to have her water cut off because we’ve got another renter that has a $500-plus bill,” Sanders said. “You took the risk by taking the contract. You took the contract with that renter. I didn’t. You did. So you should go after that person, just like any other utility does.”
“You’re penalizing the next person down the line,” Hobbs said. “It strikes me as inherently wrong.”
Mayor Greg Mahler asked how other communities handle it.
Gray said they use similar policies.
“Remember, other communities didn’t used to allow blacks,” Hobbs said. “That doesn’t make it right. Just because (it’s) what other people do doesn’t make it right.”
“It is going to be a hot topic,” Goble said. “As a council, our stance, is it does suck for homeowners at this point. On the other side, we have to watch out for the city too. The way I view it is you rolled the dice and you risk when you have a renter and you have the ability to rent your home out to other people. The city shouldn’t have to take the liability of the risk of not being paid for the utilities.
“There is a push and pull on this, and I think as things keep going the way they are with our level of unpaid water bills that this is probably going to happen more often. If we have the time, maybe we should look at it and see if there’s anything we can or can’t do differently.”
“The way the new system is working, it should almost eliminate it,” Snyder said. “You can take your philosophy one way or the other, but why it’s reset is because if a bill is not paid, it’s taken care of right then and there, so you shouldn’t have this talk about liens. There should be very few liens in the future.”
“It’s because you’re forcing the landlord (to pay),” Hobbs said.
“I understand that’s your philosophy, but the point of it is, that’s how it works,” Snyder said.
“It’s obviously a topic of discussion,” Mahler said. ‘Right now, there’s not much we can do other than it’s a topic of discussion.”
Present at the meeting were councilors Briana, Susan Coleman, Lisa Gourley, Mahler, Trask, Goble and Diane Gerson.