In a move that’s expected to anger local landlords, the city is planning to eliminate a policy that allows city utility accounts to be listed in the name of a renter and not the property owner.
The city is losing between $40,000 and $60,000 a year with more than 90 per cent of that attributed to tenant accounts. Council wants to offload that risk onto landlords.
“I’m absolutely OK with the landlord having risk. They took risk to get the property and they should maintain the risk with utilities,” said Mayor Nolan Crouse, who owns rental properties throughout Western Canada.
He said taxpayers who pay their bills shouldn’t be subsidizing those who don’t.
Council, meeting as the standing committee on finance, voted unanimously to pursue the change. This means the issue will come forward as a recommendation to regular council at a future meeting. There will be a public hearing to gather feedback prior to a council vote, Crouse said.
If passed, the new policy would apply to any new landlord-tenant relationships but wouldn’t affect existing rental agreements, he said.
The change came after Crouse requested a report on how much the city spends on write-offs each year.
The city processes an average of 350 shut-off notices each month, which involves a time-consuming process of placing phone calls and sending notices, said finance director Gene Peskens. The result is that public works shuts off the water at an average of 25 properties each month. This leads to more administrative headaches, Peskens said.
“There’s a lot of stress associated with those accounts, a lot of complaints and also a lot of turnover,” he said.
If utility bills are in property owners’ names these write-offs would be transferred to the property taxes, Peskens said.
“Why should the city bear the business risk?” he wondered. “Why should the risk not be with the landlord?”
Crouse estimates there are 1,500 to 2,000 rental properties in the city, which means a lot of potentially disgruntled landlords when word of the policy change gets out. City administration warned council to be ready.
“We are tempering our recommendation knowing full well that we will be lobbied extremely hard by the landlord group,” said chief financial officer Dean Screpnek.
Even though it’s guaranteed to generate opposition, the recommendation is the right one because it will increase efficiency and reduce the level of bad debts, he said.
All of council supported the move. Coun. Malcolm Parker hoped the city can make the change with a “minimal amount of flak.”
“I think this is a change that we should really look at,” he said.
