Council requires new residential utility accounts be in property owners’ names; aims to reduce bad debt

Fate City Council voted Jan. 27 to require that new residential utility accounts be opened in the property owner’s name rather than the tenant’s name. The ordinance, effective for new accounts beginning May 1, 2025, follows staff analysis showing that single‑family rental accounts were disproportionately likely to go to collections or generate disconnect work orders.

Why staff proposed the change: Utility billing staff presented data showing rental single‑family accounts are 5.6 times more likely to be sent to collections and 3.1 times more likely to generate a disconnect work order than owner‑occupied accounts. City staff also showed comparative results from another Texas city that enacted a similar rule in 2019: that city reported an approximate 80% reduction in collection cases and a 60% reduction in shut‑off work orders after the owner‑name requirement.

How it will be implemented: The council approved applying the requirement only to new accounts (so existing tenant accounts remain in the tenant’s name until turnover). Staff said they will mail and email affected property owners, publish FAQs on a dedicated webpage, and use existing rental‑license records to identify owners. If someone attempts to open an account and cannot prove ownership, the city will treat the property as a rental and require owner verification.

Tenant protections and concerns: Council members and staff discussed the rare scenario in which a tenant pays rent but the owner has not paid the utility bill; billing staff said policies and notice periods exist and that staff will prepare a written procedure for handling owner/tenant disputes before the effective date.

Vote and next steps: The ordinance passed (recorded vote: 6 in favor, 1 opposed). Staff will implement outreach and return to council with the written disconnection/tenant‑owner handling procedure before May 1, 2025.