One of the things the city is not thinking about is the negative effect on the community if they increase the utility deposits to $500.
If a landlord has new tenants, who want to move in, chances are good that they will not be able to afford first and last months' rent, security deposit and the utility deposit.
The city is requesting a $500,000 grant for more downtown apartments. In their application and press release, they stated that these apartments are needed for low-income people and college students. Does anyone really believe that low-income residents and college students can afford a $500 security deposit?
Last month, the City of Dowagiac had 80 electric shutoffs. If these people are forced to pay between $250-$450 more, plus their past due electric bill, do you think they will pay the bill or move to another community?
Let's say that just 25% of these families decide to move and not pay the increase in their deposit; that would be 20 families moving. If each family had just one child in Dowagiac schools, that would mean that the school would lose 20 students. 20 students at $7000 a student would be a huge loss for Dowagiac Schools, and this is just ONE MONTH
Think about it and call you councilman.
Friday, May 7, 2010
Two Million Dollar Payoff Is Why Dowagiac Michigan Needs $500 Deposit
We have called over ten cities that run their own utilities. None of them go after the landlord for tenants' utility bills. The largest deposit we found was $175.00. To give you an example, the City of Niles charges a deposit of $100.00. If a customer gets disconnected, prior to their service being restored, they have to pay an additional $100.00.
When we asked these cities what they do with customers who move and don't pay their bills, all said they go after collections from the tenant.
The city of Dowagiac has said that it takes too much time to try to track down a tenant, and they would need additional staff to do that. Other utilities say the easiest way to collect is to get a judgment and get their money from state income taxes.
The other way they all cover bills that go unpaid, is they figure it into the cost they charge their utility customers. Dowagiac doesn't have the ability to raise the rate to cover their losses. This is because we are being forced to pay the highest electric rate in the area to pay off the two million dollar mistake made by the city when they bought out the electric contract.
This issue about raising the deposit has NOTHING to do with people leaving and not paying their bills and has everything to do with paying off the two million dollar mistake made by our elected officials. If we weren't paying off the contract, the city could cover their losses, like all other city utilities do--with a small utility increase. But, because of this mistake, the city wants renters to pay for THEIR mistake.
What good will it do for the city to be able to put a lien on foreclosed property when the house may sit vacant for years before they get the money?
The councilmen need to consider the utility contract payoff before voting on this increase. It isn't the renters' fault the city made bad choices, but the renters are being given the bill.
When we asked these cities what they do with customers who move and don't pay their bills, all said they go after collections from the tenant.
The city of Dowagiac has said that it takes too much time to try to track down a tenant, and they would need additional staff to do that. Other utilities say the easiest way to collect is to get a judgment and get their money from state income taxes.
The other way they all cover bills that go unpaid, is they figure it into the cost they charge their utility customers. Dowagiac doesn't have the ability to raise the rate to cover their losses. This is because we are being forced to pay the highest electric rate in the area to pay off the two million dollar mistake made by the city when they bought out the electric contract.
This issue about raising the deposit has NOTHING to do with people leaving and not paying their bills and has everything to do with paying off the two million dollar mistake made by our elected officials. If we weren't paying off the contract, the city could cover their losses, like all other city utilities do--with a small utility increase. But, because of this mistake, the city wants renters to pay for THEIR mistake.
What good will it do for the city to be able to put a lien on foreclosed property when the house may sit vacant for years before they get the money?
The councilmen need to consider the utility contract payoff before voting on this increase. It isn't the renters' fault the city made bad choices, but the renters are being given the bill.
Wednesday, May 5, 2010
Why is Dowagiac Raising Their Utility Deposits to $500.00
We have called over ten cities that run their own utilities. None of them go after the landlord for tenants' utility bills. The largest deposit we found was $175.00. To give you an example, the City of Niles charges a deposit of $100.00. If a customer gets disconnected, prior to their service being restored, they have to pay an additional $100.00.
When we asked these cities what they do with customers who move and don't pay their bills, all said they go after collections from the tenant.
The city of Dowagiac has said that it takes too much time to try to track down a tenant, and they would need additional staff to do that. Other utilities say the easiest way to collect is to get a judgment and get their money from state income taxes.
The other way they all cover bills that go unpaid, is they figure it into the cost they charge their utility customers. Dowagiac doesn't have the ability to raise the rate to cover their losses. This is because we are being forced to pay the highest electric rate in the area to pay off the two million dollar mistake made by the city when they bought out the electric contract.
This issue about raising the deposit has NOTHING to do with people leaving and not paying their bills and has everything to do with paying off the two million dollar mistake made by our elected officials. If we weren't paying off the contract, the city could cover their losses, like all other city utilities do--with a small utility increase. But, because of this mistake, the city wants renters to pay for THEIR mistake.
Another question that needs to be answered, is just how many of these unpaid utility bills are from foreclosed homes and not renters? What good will it do for the city to be able to put a lien on foreclosed property when the house may sit vacant for years before they get the money?
The councilmen need to consider the utility contract payoff before voting on this increase. It isn't the renters' fault the city made bad choices, but the renters are being given the bill.
Howard Hall
When we asked these cities what they do with customers who move and don't pay their bills, all said they go after collections from the tenant.
The city of Dowagiac has said that it takes too much time to try to track down a tenant, and they would need additional staff to do that. Other utilities say the easiest way to collect is to get a judgment and get their money from state income taxes.
The other way they all cover bills that go unpaid, is they figure it into the cost they charge their utility customers. Dowagiac doesn't have the ability to raise the rate to cover their losses. This is because we are being forced to pay the highest electric rate in the area to pay off the two million dollar mistake made by the city when they bought out the electric contract.
This issue about raising the deposit has NOTHING to do with people leaving and not paying their bills and has everything to do with paying off the two million dollar mistake made by our elected officials. If we weren't paying off the contract, the city could cover their losses, like all other city utilities do--with a small utility increase. But, because of this mistake, the city wants renters to pay for THEIR mistake.
Another question that needs to be answered, is just how many of these unpaid utility bills are from foreclosed homes and not renters? What good will it do for the city to be able to put a lien on foreclosed property when the house may sit vacant for years before they get the money?
The councilmen need to consider the utility contract payoff before voting on this increase. It isn't the renters' fault the city made bad choices, but the renters are being given the bill.
Howard Hall
Friday, April 30, 2010
Dowagiac Michigan Government Singles Out Low Income Renters
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.
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.
Tuesday, April 27, 2010
Dowagiac Mayor Pro-Tem Loses Control
Tonight's Council meeting was one of the most open meetings I have seen in Dowagiac for many years. The city should be proud for allowing residents to have dialogue at the meeting.
Residents should be proud of Mr. Burling, Ms. Hunt and Mr. Oliver for requesting changes to the electric deposit policy prior to the next meeting.
During the meeting, Mr. Laylin said that it may be possible that if this deposit doesn't pass, the utility rates may have to be doubled to cover costs. This is one of the most inaccurate comments I have ever heard. According to the City, this would only affect about 20 residents, which is a very low estimate. For Mr. Laylin to attempt to scare residents to accept this unfair policy, as it stand now, by saying rates would be doubled, is nothing more than a scare tactic and totally incorrect. Residents deserve to have somebody run the meeting who has correct and accurate information, not someone who makes up figures in the middle of the meeting that are not correct.
The explanation given for this increase was so confusing that a person in attendance had to interrupt Council a couple of times to try to figure out what was being presented.
Here is an odd fact about the new deposit: If you only have electric, your deposit will be $225.00. If you only have water, the deposit is $80.00, but if you have both, the deposit will be $500.00. The numbers just don't add up, of course. It would be better to go in and have the electric put in your name, then go back and have the water put in your name later for a deposit of $80.00. If you could do it this way you could save almost $200.00.
At the end of the meeting, during councilmans' comments, Mr. Dodd asked when the deposits would be returned. He was told they'd be returned when the customer moves and their bill is paid in full. What I can't understand is why the question was even asked. Each councilman is given a Friday packet with all the information needed to vote on each week's agenda items. Why would a councilman ask that question if they read the information in their packet? The answer was clearly stated in their paperwork.
The most disturbing event happened after the meeting when Mr, Laylin asked me if I thought I was being represented well by my councilman. I asked him why did he think that was an issue. Mr. Laylin stated that one of my councilpersons (Lori Hunt) seems to miss a lot of meetings. I told Mr. Laylin that I was well represented tonight by Ms. Hunt. Why would the Acting Mayor ask a resident if they are happy with their councilperson, and say that they seem to miss a lot of meetings?
All of the residents of the first ward should be proud of Ms. Hunt tonight for asking for changes to be made in the utility deposit prior to voting for it.
I feel that it was very unprofessional for a councilman to ask a resident if they feel they are being represented well and bring up the subject of Ms. Hunt missing meetings. Ms. Hunt is taking classes full time and raising a family, and I am sure there are times that she cannot attend.
If Mr. Laylin seems to think that Ms. Hunt is missing too many meetings, that is something that should be discussed between the Council and Ms. Hunt, instead the subject was brought up to a resident and in front of residents that attended the meeting.
Once again thank you to the the councilmembers who took a stand and requested changes in this deposit issue instead of just voting it in at the next meeting. Be sure to thank Ms. Hunt, Mr. Burling and Mr. Oliver.
Residents should be proud of Mr. Burling, Ms. Hunt and Mr. Oliver for requesting changes to the electric deposit policy prior to the next meeting.
During the meeting, Mr. Laylin said that it may be possible that if this deposit doesn't pass, the utility rates may have to be doubled to cover costs. This is one of the most inaccurate comments I have ever heard. According to the City, this would only affect about 20 residents, which is a very low estimate. For Mr. Laylin to attempt to scare residents to accept this unfair policy, as it stand now, by saying rates would be doubled, is nothing more than a scare tactic and totally incorrect. Residents deserve to have somebody run the meeting who has correct and accurate information, not someone who makes up figures in the middle of the meeting that are not correct.
The explanation given for this increase was so confusing that a person in attendance had to interrupt Council a couple of times to try to figure out what was being presented.
Here is an odd fact about the new deposit: If you only have electric, your deposit will be $225.00. If you only have water, the deposit is $80.00, but if you have both, the deposit will be $500.00. The numbers just don't add up, of course. It would be better to go in and have the electric put in your name, then go back and have the water put in your name later for a deposit of $80.00. If you could do it this way you could save almost $200.00.
At the end of the meeting, during councilmans' comments, Mr. Dodd asked when the deposits would be returned. He was told they'd be returned when the customer moves and their bill is paid in full. What I can't understand is why the question was even asked. Each councilman is given a Friday packet with all the information needed to vote on each week's agenda items. Why would a councilman ask that question if they read the information in their packet? The answer was clearly stated in their paperwork.
The most disturbing event happened after the meeting when Mr, Laylin asked me if I thought I was being represented well by my councilman. I asked him why did he think that was an issue. Mr. Laylin stated that one of my councilpersons (Lori Hunt) seems to miss a lot of meetings. I told Mr. Laylin that I was well represented tonight by Ms. Hunt. Why would the Acting Mayor ask a resident if they are happy with their councilperson, and say that they seem to miss a lot of meetings?
All of the residents of the first ward should be proud of Ms. Hunt tonight for asking for changes to be made in the utility deposit prior to voting for it.
I feel that it was very unprofessional for a councilman to ask a resident if they feel they are being represented well and bring up the subject of Ms. Hunt missing meetings. Ms. Hunt is taking classes full time and raising a family, and I am sure there are times that she cannot attend.
If Mr. Laylin seems to think that Ms. Hunt is missing too many meetings, that is something that should be discussed between the Council and Ms. Hunt, instead the subject was brought up to a resident and in front of residents that attended the meeting.
Once again thank you to the the councilmembers who took a stand and requested changes in this deposit issue instead of just voting it in at the next meeting. Be sure to thank Ms. Hunt, Mr. Burling and Mr. Oliver.
Sunday, April 25, 2010
Dowagiac Michigan to have one of the highest utility deposits in the nation
One of our readers had a good idea, if you go to the citys webage for the electric board you will see that the board has the following responsibalities. The Electric Facilities Board is a five-member advisory board to the City Council. The
Board advises Council on matters relating to the operation and maintenance of the electric
utility. If this information is correct this increase should have first went through this board. If you look at the members you will see once again we have a city board that isn't completly filled. Here is another clear example of the city not following the rules by not going through the electric board. I told Councilman Oliver the other day, the city needs to disband all of the city boards. If it was up to the city they would not even have councilpersons.
Make sure to go to our home page and call your councilperson and tell them to VOTE NO on this increase.
Board advises Council on matters relating to the operation and maintenance of the electric
utility. If this information is correct this increase should have first went through this board. If you look at the members you will see once again we have a city board that isn't completly filled. Here is another clear example of the city not following the rules by not going through the electric board. I told Councilman Oliver the other day, the city needs to disband all of the city boards. If it was up to the city they would not even have councilpersons.
Make sure to go to our home page and call your councilperson and tell them to VOTE NO on this increase.
Dowagiac City Council to raise utility deposits to $500.00
Did you know we have an Electric Facilities Board? We Have. Also their is still open Vacancy's on the board. How often is this board used? They are appointed to give recommendations to the city. When is the last time you heard anything from them. You haven't. Maybe you need to go to Dowagiac's web site and look the three up and ask them if they recommended this electric rate issue. Or maybe the mayor and city manager and councilman forgot about them..
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