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City water and sewer: Who gets the bill?

Diana Jorgenson
Portola Editor
2/24/2010

Uncollected water and sewer bills have been piling up at City Hall for the past few years to the tune of $32,861.

When a property owner defaults on a city-owed bill, the city can place a lien or an assessment on the tax roll to collect it. When a renter defaults, there is no recourse.

At the recommendation of its last auditor, city staff is reviewing changes in utility billing policies to require landlords and property owners to be ultimately responsible for the utility bills.

Leslie Tigan, administrative services manager, presented the most recent update on the progress of the policy review at the Feb. 10 city council meeting, discussions that began last December.

Tigan reported research of state statutes indicated that it is unclear whether the city has the authority to require the utility account be in the name of the property owner. However, it was clear that it did have the authority to require the property owner to act as guarantor for the account, to collect a deposit up to an amount to cover a year of service, and to place a lien or assessment on a property to cover the delinquent utility account amount.

Currently, the city requires multiple units providing water service to more than one customer under one water meter be billed to the property owner.

Single units, whether residential or commercial, can be billed to the property owner, the tenant or a property manager Tigan said.

The city currently collects a deposit amounting to two months' usage, unless a favorable credit report is obtained. The deposit is held for a year and then credited to the account if payment has been timely.

But because of the city's billing timelines and a series of shutoff notices, more than two months is usually owing by the time the renter has moved on.

Tigan presented two other options for consideration by the council. First, the city could solve the problem by hiring a collection agency. The downside to that solution was that the agency would keep a portion of the money and that the city would need to require Social Security numbers and store the information.

At the January city council meeting Tigan reported, "At this time staff has elected not to keep and store this type of information due to its sensitive nature and the risk associated with a breach of the information. If the city were to obtain and store Social Security numbers of the customers, the proper safeguards would need to be in place."

She also suggested the council might consider the status quo appropriate and continue its current practices, accepting outstanding bills as part of doing business.

In her most recent report at the February meeting, Tigan also relayed other statute information that would allow any tenant whose landlord had failed to pay the utility bill to pay the amount in arrears and then put the bill in his or her (the renter's) name. Should the council decide to change current city policy to require the landlord to assume ultimate responsibility for utility bills, the city would still comply with that code.

Tigan asked the council members to consider implementing policy changes that would require bills be addressed to property owners rather than renters, require landlord responsibility and to think about possible changes to the deposit amount, as well as considering how to implement such a change.

Council members had questions for Tigan and there was dialogue about other cities and their policies. Mayor John Larrieu felt the consensus of the council was to continue in the direction of requiring landlord responsibility and to continue to work on a final proposal, to be presented at a future meeting.
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