Once again, the hardship of paying first, last, and current rent along with a $500 utility deposit is an overwhelming amount of money for any potential resident to bear. The “reward” of a partial return on deposits after 12 months, and again after 24 months SHOULD exist, rather than punish every new customer with the assumption that they will become delinquent in payments BEFORE that has ever been established as fact.
It would seem reasonable that deposit funds are to be held in trust for return to the customer at the termination of their utility service, or to be used for payment due at the termination of utility service. It would also seem reasonable and financially responsible that these funds would be held in an interest bearing account. As the ordinance is currently written, each new utility customer will contribute $500 to this account for a minimum of 12 months, $400 for a minimum of 24 months, and $300 indefinitely until the termination of their utility service, which could potentially last for several years. Depositing customers without 12 consecutive months of on-time payments will receive no return on their deposit while their initial $500 deposit remains in the account beyond the 12 month time period. The same circumstance will exist for depositing customers without 24 consecutive months of on-time payments leaving $400 in the account for an extended period of time before any return on their deposit is received.
For the City to gain this type of long term benefit from an interest bearing account established with funds being held in trust for utility customers, funds that actually do not belong to the City, does not seem to be fair-minded. The City has the ability to act in good faith by returning interest benefits to utility customers earned on THEIR money rather than use these deposit funds as a resource to generate income for the City’s financial gain. Serious consideration should be given to returning this interest income to those who have truly earned it through their good faith deposits. Distribution of interest monies generated by deposits could be paid annually during the winter months when utility service customers could benefit the most from a reduction in their utility bills.
Justification of the deposit increase by representing that unpaid utilities are easily collectible through the tax obligation of Home Owners and Landlords who do not file waivers with the City, and more difficult and costly to collect from potentially un-locatable utility customers with waivers on file is misleading. Regardless of the collection method used when necessary, there is time, paperwork, and manpower involved. Although initially collection on an existing tax obligation with the recovery of interest, penalties, and collection costs may appear to be guaranteed, that is not always true. In the case of the utility customer with a waiver, their non-payment is also collectable with interest, penalties, and collection costs. In addition, collection options have changed in recent years for creditors allowing them to easily file the paperwork necessary to collect from State Income Tax returns. It is reasonable to assume that individuals expecting a refund WILL file a return that is accessible for garnishment eliminating the necessity of any investment of time in locating these individuals. Many will also be collected from and easily located if only steps are taken in a timely manner rather than delayed for months before proceeding. In EACH case recovery of costs beyond the initial non-payment is possible. To give the impression that one is more costly than the other is simply untrue when costs involved are recoverable.
Without continuing the argument of WHY the potential risk for nonpayment has suddenly increased to necessitate a deposit amount that more than doubles the current deposit, it cannot be denied that the increase IS a substantial financial burden to anyone seeking utility service in this City. Again, with a $500 utility deposit on top of moving and potential rent obligations the financial burden becomes out of reach for many potential residents as well as current residents facing a move. When faced with this knowledge prospective residents will find it very easy to justify moving outside the City limits to avoid the financial burden that will be created here. Current and future residents will be driven out of town to seek housing in a more affordable area. Along with them will go potential income for the City’s businesses, enrollment for our schools, and general support for this Community that it desperately needs. Why not consider a plan to achieve the $500 deposit goal while making its collection less of a burden. For example, the current deposit amount could be increased to $250 with an additional $50 paid each month for the following 5 months. An initial deposit increase is collected to offset the ever growing cost of security to reduce the City’s financial risk. The 6-month payment plan allows the City to collect the full deposit amount proposed in a relatively short period of time, yet allows a situation that prevents at least some utility customers and potential residents from being turned away. In these difficult financial times it is simply impossible for many people including potential students for our local Community College to afford such a large out of pocket expense for a utility deposit.
It may be beneficial to take another look at the proposed Utility Ordinance Amendments before pushing through a plan that doesn’t appear to have taken all aspects of the situation into consideration. This is a significant increase warranting a considerable amount of thought before subjecting residents and this City to the long term consequences a hasty decision will cause. Do everyone involved a favor, take your time and contemplate all of the options BEFORE moving forward rather than AFTER IT IS TOO LATE.