President Jones The final, final consideration tonight is 8.4, an Ordinance amending municipal code Chapter 13.02 "Municipal Utility Rates and Charges" to specify that a landlord is responsible for unpaid tenant city utility bills. Mr. McInnis, I believe Logan McInnis is here from staff, did you have any additional information to add to the presentation?
Logan McInnis No I don't, thanks.
President Jones Okay, thank you. Any questions from Council on this item? Okay seeing no raised hands, I will look for a motion from Ms. Becerra, Public Works.
Alderperson Becerra Thank you. This is the second and final reading and I move that we adopt an ordinance amending Missoula Municipal Code Chapter 13.02 entitled “Municipal Utility Rates and Charges” to repeal 13.02.090 and establish 13.02.091 to specify the responsibility of the property owner for a tenant’s unpaid City of Missoula utility bills. And may I speak to that motion please?
President Jones Let me call for public comment first and then we'll come right back to you. Is there any public comment on this motion that is in order? I'm not seeing any raised hands, I'll just double check. Okay seeing no public comment, Ms. Becerra.
Alderperson Becerra Thank you. I just wanted to express my support for this motion. I believe that during the pandemic, the city stopped shutting off customers who were past due on their accounts. I believe that this is a, a fair alternative to that way of recuperating costs and I want to thank Logan for giving us all the information, as to how other communities deal with recuperating costs. Thanks.
President Jones Thank you. Mr. Contos.
Alderperson Contos Yes, after looking at this, I feel like there needs to be some other options rather than putting this back on the homeowner. I'm not quite sure what the thinking is but if you use water, you should pay for it and if you can't pay for it, it probably needs to be turned off. I think a lot of times people think because someone owns a home that they're wealthy and that they can handle all the responsibilities, not quite true. It's like when someone doesn't pay their rent, the mortgage still needs to be paid and that falls back on the homeowner. Also, I just don't feel like this is a Montana value; this is a hard-working state, and we work hard for what we get. So, to pass this on to the homeowner; it's not fair. Thanks.
President Jones Ms. Vasecka.
Alderperson Vasecka Thanks. I have a question and then a comment, and sorry for the late ask of this, but if it's in your lease that you are responsible for the utilities, what then you don't pay that, will it still be the responsible of the homeowner even if it is in the lease and could that be litigated against? I don't know who that question is for.
President Jones Mr. McInnis or Mr. Nugent if either one of you can answer that?
Logan McInnis Feels like a legal question to me.
President Jones Jim? Mr. Nugent, if you're able to….did you hear the question? We can't hear you; you're muted still Jim.
Jim Nugent All right, found my microphone. What was the question again?
President Jones Could you rephrase it?
Alderperson Vasecka Yes. So, if in the lease agreement between the tenant and the homeowner, if the tenant is responsible for the utility payments and then the tenant does not pay it and then the city comes to the homeowner make them responsible for it, can, is that a possible litigation issue or would the city not be able to come after the homeowner in that case? Just a little confused about that.
Jim Nugent The way the Montana State Law is set up with respect to delinquent sanitary sewer, delinquent water bills, etc. is that it can become a lien against the real property. So, it has to be the property owner that has to be responsible ultimately in order for the city to be able to assert its lien. The city is not a party to that lease agreement between the tenant and the property owner. So, the city isn't bound by what they might come up with, the structure amongst themselves as a way of shall we say paying the, the bill, but ultimately, the city has the right to put the lien on the property that is receiving the services. So, the property receiving the services is ultimately going to be responsible pursuant to the statutory scheme that allows for the lien to be asserted on to the property. It's then up to the landlord and their tenant to work out how they're going to pay if the landlord's able to collect from the tenant but in part it's intended so that the city doesn't get left holding the bag when the landlord and tenant don't reach resolution amongst themselves. Thus, the bottom line is, is the lien goes against the property, the property owner and the city has a statutory right to assert that.
Alderperson Vasecka Thank you. May I have a followup?
President Jones Go ahead.
Alderperson Vasecka Okay, thank you so much for that explanation Jim and I think that if there is already something in Montana law that states this, I don't think that the city should go to the…. I, I think that this resolution and change in ordinance is, I think kind of going deeper into the, the agreement between the tenant and the landlord, sorry I said that terribly, but yeah I'm really uncomfortable with this and my colleague John said it a lot more eloquently. So, I, I'm not going to be in support of this tonight.
President Jones Thanks. And to just follow up with the question Jim, on that issue. Will the landlords in a contractual relationship with the tenants, so they have things like a security deposit, and I assume that that's the tool that they would make themselves whole with if the tenant isn't paying this and the city is trying to get the bill paid by attaching a lien? Is that right?
Jim Nugent That's correct. If there's enough money left in the security deposit to put towards the water bill. I think it could also be enlightening or helpful to have Logan explain the administrative aspects of trying to collect these water bills so that the city isn't left holding the bag and giving free water to a bunch of properties, but yes Gwen, you're, you're correct with respect to that segment or aspect of it.
President Jones Thanks. Did you want to add to that Logan?
Logan McInnis Nothing really comes to mind. I mean certainly there are challenges with you know with the process of shutting off water. You know, we've got hundreds if not thousands of curb boxes in town that don't work and so it's a pretty idle threat to say we're gonna shut your water off and we can't physically do it without you know having to tear up the street to replace their curb box. So, I mean there are complications with shutting water off other than you know in addition to the concern about taking away people's water service. You know, in terms of the process for collecting, I think we've you know it's outlined in state law, and we'll follow it in terms of the legal notice, and you know give the property owners time to resolve this. And you know, it, the way it really works, you know they have at least 30 days but as I understand it from talking to Judy Anderson, our kind of expert on past wastewater liens you know it. You know the final list is developed in mid-September and then the liens would be filed around October 1st, so you know they really have two to two and a half months to you know get the account taken care of.
President Jones Great, thanks. Okay, next in line, I have Ms. West.
Alderperson West I also wanted to say thank you for this really in-depth email that you sent out following our committee discussion. I thought it was very informative and I especially appreciate the discussion of what other Missoula communities are, not Missoula communities, Montana communities are doing around the state to I guess recover utility, utility bills that are owed to them. I wanted to just quickly point out that three quarters of the delinquent accounts are owner occupied. I thought that was interesting and that just a tenant of the past due account or just a quarter of the past due accounts are those bills, I guess accrued by tenants, and I am in support of this. I think state law enables us to do this, but this defines what the process is locally and when to you know maybe contact owners and I think that this allows folks to set up payment plans and be proactive, to avoid that worst case scenario at a time that it hasn't become an insurmountable problem. And it also maybe will let landlords know when there's a tenant that's maybe behind at a time that it can be reconciled because $200.00 is something, you know it's, it's a smaller amount of money that maybe can be you know scheduled out over the next year to get caught up on without really you know like doubling somebody's bill. And maybe a landlord isn't aware that a tenant is struggling and that is also a proactive conversation because maybe they're paying the rent, but not paying the water bill and that you know, you don't know what you don't know. So, yeah I'm in support of this and I think it's a very reasonable process.
President Jones Thank you. Ms. Jordan.
Alderperson Kristen Jordan Thank you. I actually see this as another kind of extension of affordable housing. I think that it was really interesting to see that a majority of the outstanding balances were from homeowners and to me that speaks volumes to the affordability of living in your home once you own it and I think if we're really dedicated to providing affordable housing, we do need to make sure that homeowners can afford to stay in their house. And I suspect that the folks who are not paying their water bills are folks who are choosing instead to buy food or fuel, the kind of things that you need straight away whereas the water bill is something that you can put off until you can't. And I think that this is clearly a, a driver to affordability and I won't be supporting it tonight and I'd love to look for alternatives only because I think that when we talk about affordable housing, we need to make sure that people who do own their own homes can afford to stay in their homes. And I mentioned last week that you know water is, drinking water is a human right and there are other ways I think that we can find in our budget to help folks with these water bills and perpetuate an affordable housing concept. I, I want us to think outside of the box when it comes to affordable housing and make sure that folks can afford their bills once they actually are able to afford a home. Thank you.
President Jones Thank you. Mr. Hess.
Alderperson Hess Thanks. I appreciate the comments around affordable housing and how bill's, utility bills in particular relate to that, and I would love to have a, a conversation about that. I think that this is a good thing to do tonight, with a follow-up adjustment for potentially expanding assistance programs. I, I have had a $200.00 past due water bill and it's because I am forgetful and, and disorganized, and that's from a position of privilege and I recognize that and I know that there's a lot of people who, for whom that is a different situation, but we need to fully understand why it is that there's delinquency and we need to tailor assistance so that it matches, so that people who need assistance are receiving assistance. So, I'm in favor of looking at it. I'm also in favor of passing this tonight and I think that those are I think those are complementary actions. I also just want to highlight that this is a local, this is the City Council setting policy for a publicly owned water utility and just some years ago, we would have, you know people in the audience would have had to go to Helena and practically file a legal brief with the public service commission in order to, in order to talk about our local utility. So, I'm, regardless of the outcome, I'm just really glad that we're able to have the discussion at the local level with public and with public comment and I think it's a really good thing about our public ownership of our, of our system.
President Jones Thank you. Ms. Vasecka.
Alderperson Vasecka Thanks. Logan, I remember that we talked about this on Wednesday, but with regards to sending it to collections against the tenant, the collection agency takes about 50, is that correct? Do I remember that correctly?
Logan McInnis That's correct. Yep.
Alderperson Vasecka Okay, thank you.
President Jones Okay, seeing no other hands raised, I will just briefly comment. I wanted to follow up on what Mr. Hess referenced regarding the fact that this is now a municipality owned water utility instead of privately owned, and up until a mere handful of years ago, when it was privately owned and was owned by hedge funds that were flipping it to yet other hedge funds, the business plan for the most, the last hedge fund that was open that owned it was to raise rates every year in order to do well by their shareholders, which that's their mission. I get that, but in terms of keeping water rates at a reasonable level our water acquisition litigation and eminent domain case was about the best thing we could have done. So, in the big picture, that's very, very good for our, our residents. Okay, I see no other hands raised for comment and we've called for public comment, so we will have a roll call vote.
President Jones Thank you. That concludes our final consideration hearings.