PUBLIC NOTICE: UTILITY BILLING ANNOUNCEMENT

PUBLIC NOTICE: Utility Billing Announcement

Much like many of the clean-ups and updates we have completed over the last few years we decided that Utility Billing was next in line last September. Much of the thought process which went into this decision was based on our recent rate studies and the additional studies underway. Staff worked on this process as we had time and we quickly found out the clean-up and update was more of an investigation, repair and upgrade.

The lien component seems to have taken the forefront of the issue because of property owners making appearances at Council meetings is only a small part of what we have been trying to repair. In reality, the landlord/tenant issue involved a total of 261 properties. Not necessarily the widespread issue the article in the Pioneer makes it out to be.

We found a number of issues needing to be cleaned up and we are continuing to move forward. Change from how an agency has conducted business can lead to a period of learning for the City, property owners and rate payers.

The City of Molalla has about 3,000 water/sewer accounts. Some of these accounts are individual and some are master meters with multiple users, like apartments. Each account receives a bill for service rendered. As you all know, a portion of each bill is calculated with a base rate and a portion is calculated on usage. A very high percentage of these accounts pay on time and in full. The cost of accounts that do not pay or pay on time is spread out over the entire user base. In other words, we all pay for those who don’t.  

We identified that a component of our utility billing software was turned off that would tell us when an account had been illegally turned on when the City locked the meter. We found six (6) of these accounts through our investigation. The newspaper stated that there were “hundreds”.  These are accounts that could have been processed as theft of service through Municipal Court but we allowed the account holder to pay past due bills and we moved on. All accounts except one have been cleared.  

We found our Storm Drain Utility had not been billed according to the 1999 adopted methodology or accurate. Some in the community will find their bills have gone up and some will find their bills have gone down. Bottom line is the community should not be subsidizing certain user types which is exactly what was happening.

Finally, there is the landlord/tenant issue that seems to have taken over the process. When we began the process of the Utility Audit, we sent out notices to customers stating that we were doing an audit and they should examine their bills.

There are 261 properties that over a ten-year period had outstanding utility bills (we knew this prior to audit). The total amount is $57,548.23 and equals about 1.54% of our annual utility billings. The point here is the vast majority of the landlords or property managers call the City at move in or move out to verify the renter paid their utility bills. They may take the cost out of a deposit or bill the renter personally. The landlords caught in this issue are the minority and not a citywide problem. 

Generally, we have not had problems because a vast majority of our property accounts pay their utility bills. We know in some cases the tenant that does not pay the utility bill may have also left the property in a less than desirable way so we have been willing to use collections as a way to collect. Some have paid.

A problem has risen when we notify the landlord that they can call the collection agency to discuss fees and interest. The City has notified property owners that they can negotiate with the Collection Agency but many do not. Some owners have chosen to do this but others have not. We have talked with the Collection Agency and they are more than willing to release some of the very old property debts back to the City minus interest and fees. None of these collection accounts are in the name of the owner unless the owner is the one with the unpaid bill. What we are left with is the unpaid utility bills.

What I want to be clear about is many landlords knew there were unpaid utility bills. The Pioneer Article even discusses that portion of the issue. However, there are always exceptions to this rule and one or more have voiced their concerns. We clearly hear this and have implemented a new application policy to remove these kinds of issues going forward. We should have communicated better with the landlords.

Additionally, the landlord/tenant issue discussed in the Pioneer article mixes issues that have nothing to do with each other. The City has no knowledge of a new renter or land sale unless we are contacted. 

The process we have instituted for rental properties is the owner or authorized property manager must also sign the service application. This process will clean up the property owner notification and make sure the community is paid for services rendered.

Notices have gone out notifying customers to please take a look at their bills and to be aware of potential changes to their service accounts. Additional notices will also be provided in July regarding this process. Account users may also come by City Hall as well.

This process is not without its heartache and will take some time. Please remember it is not the City’s or City Staff’s fault when individuals do not pay their water/sewer bills. It is users, property owners, and landlord’s responsibilities to ensure that bills for city services are paid in full and on time.   

Dan Huff

City Manager

City of Molalla