City of Fate proposes ordinance for owner-named utility accounts amid rising unpaid bills

The Fate City Council meeting on November 11, 2024, focused on significant changes to the city's utility billing practices, particularly concerning rental properties. The council discussed a proposed ordinance that would require utility accounts for single-family rental properties to be placed in the owner's name rather than the tenant's. This change aims to address the financial burden on the city when utility bills go unpaid by tenants.

City officials explained that the current system, where utilities are billed to tenants, often leads to higher rates of unpaid bills and increased operational costs for the city. Statistics revealed that rental accounts are six times more likely to go to collections compared to owner-occupied accounts. Additionally, nearly 28% of rental accounts face disconnection within a year, compared to 9% for non-rental accounts. The city currently faces approximately $44,000 in bad debt from utility accounts, with about 85% attributed to rental properties.

The proposed ordinance would allow a 12-month transition period for property owners and tenants to adapt to the new requirements. During this time, existing accounts would need to be updated to reflect the owner's name. Council members expressed concerns about the implications for landlords, particularly regarding the potential for large utility bills if tenants fail to pay. Some members suggested that landlords might need to adjust rental agreements to incorporate utility costs.

The discussion also touched on the handling of utility deposits, with council members noting that a significant amount of money is tied up in deposits that residents may not be aware they can request back after 12 months of good standing. The council is considering ways to improve communication with residents about their deposits and the possibility of differentiating deposit amounts based on whether the account is for a rental or owner-occupied property.

Overall, the council's discussions indicate a shift towards holding property owners accountable for utility costs associated with their rental properties, aiming to alleviate the financial burden on the city and its residents. The council plans to revisit the ordinance in future meetings, allowing for further input and adjustments before implementation.