City debates changes to landlord-tenant utility billing

The City of Columbia Falls is reviewing its utility billing for the first time in ten years, with a proposition requiring bills be in the property owner’s name. This would be a shift for some rental properties that allow tenants to receive and pay their own water and sewer bills. 

City staff in the billing and water departments requested the change, which was voted down when it was proposed in 2014. The main reasoning for a change is that duplicate billing must go to the tenant — who is signed up to receive the bill, and the landlord — who is ultimately responsible for its payment if and when delinquent bills arise. 

This tends to happen when there is a shift of residency, which City Manager Susan Nicosia pointed out happens more frequently now than it did in the past. The extra paperwork when tenants are moving in and out or have unpaid bills is a strain on both the billing department, which has one person to handle said paperwork, and the water department, which currently only has one of two positions filled to issue warnings and shut water on and off. 

There has also been an increase of 150 known rental properties since 2014, bringing the present total to 380. Last go around, half of the unpaid accounts were tenants. 

One hundred and sixteen utility accounts have a landlord agreement with the city, where the landowner allows the city to collect a $250 deposit from the tenant in case of delinquent payments. 

“We become the middle man, we become the collections agency for the landlord,” Nicosia said at the council’s Feb. 20 meeting. 

“We’ve been doing the landlord’s work, correct? But we’ve never really increased the water bills to cover the time that it takes,” council member Mike Shepard added. 

The city currently charges $5 for a warning door hanger, with a $25 utility shut off fee to follow. The fees used to be higher, $20 and $50 respectively. Delinquent payments are not reported to creditors. 

Statute allows collection on delinquent utilities through the tax process, though Columbia Falls has never practiced this. “If the statute allows it and we chose that direction, it would have to be attached to the property and the assessment number for it to be applicable to the taxes,” council member Robinson said. 

Nicosia noted that in her research, she found that similarly-sized cities do not bill the tenant. It has proved to be both a financial and staffing burden for the city. 

The possibility of rate-coding, or charging different amounts based on residence type or occupation, was deemed problematic by Nicosia. 

So, the proposed shift would simply bill the landowner directly for utilities, which they could then pass on to their tenants to pay. The city would also remove language in Title 13 allowing for the $250 deposit. 

Public comment was largely by landlords in opposition to the change, though there were some outliers. 

“Water is a business that’s providing a service, and billing and collecting payment for that service is all part of doing business,” said Tracy Zeiss, who represented several area landlords. Similar comments added that other utility companies have no problem billing tenants. 

Some landlords expressed that their preferred practice would be to wrap estimated utility costs into rent, with padding for overtures. 

“We talk about, in the news, the problem with affordable housing. I know if I was to choose to rent my house out… I would not even bat an eye and jack that deposit up to protect myself,” Matt Hutchinson said. 

Paula Johnson-Gilchrist, who owns five rental properties in C-Falls, noted that the other option — landlords forwarding bills on to the tenant — could make the whole process longer and add expenses to the land owner. 

“We are able to help keep our rents affordable because we do our own bookkeeping, we do our own receivables, maintenance, we do all of that,” she explained. She suggested, as an alternative, a duplicate billing fee that would help cover the city’s burden. 

“Add it on the bill, we’ll gladly pay it. Is there some compromise that can be made to the existing system rather than just throw it out and say it doesn’t work?” she said. 

Landlord Cindy Shaw said, “I agree that the city should not be collecting deposits on behalf of an owner, for a tenant. It just makes no sense. But I do think my renters should receive their water and sewer bills directly.”

Owners reiterated throughout public comment that tenants receiving their bills directly promoted accountability. Mayor Don Barnhart asked about water conservation, and suggested that tenants could become irresponsible if they never saw their bills. 

Nicosia pointed out that high usage is tracked by the city and reported to both the landlord and the tenant. 

Megan Tabor, who owns six Columbia Falls properties, asked if new technology could aid the city in streamlining their billing. 

“As our communities grow and our towns grow, we also have to adapt, and maybe instead of looking at putting more work onto the landlord so that your office isn’t struggling… technology has really changed in the last decade. If we can change and we can learn how to do things differently, maybe we don’t have to fight about who does the work, maybe we can get work done a better way,” she said. 

Steve Haymond, for one, spoke positively on the change. As a landlord, he found that e-billing could allow him to quickly forward bills to his tenants, where they could then pay the city directly. Seeing the tenant’s bills also allowed him to determine if there was preventable overuse, such as a leaking pipe that could be fixed.

Nicosia was encouraged by the public comment, something the city didn’t see much of in 2014. “I am confident that city staff and the attorney can address a lot of the public comment, and then an ordinance can be brought at the March 4 meeting that would address some of those issues.” Nicosia said. 

Robinson put forward the motion to develop an ordinance, which would be open to public comment and have two readings. Shepard seconded, which led to a hesitant council discussion. Consensus seemed to be that more discussion was needed, but could be accomplished while moving forward. The motion passed, with council member Kelly King the only nay.