By Katie Dahlstrom
Herald Staff Writer
Clinton officials plan to use a measure previously thought to be administratively unfeasible to combat the burdensome amount of delinquent sewer bills.
The measure — a sewer and solid waste deposit that would be required of renters — was discussed by the City Council during a special Committee of the Whole work session Thursday.
City Finance Director Jessica Kinser proposed implementing a rental deposit of $100 or less depending on a customer’s average 90-day use.
The deposit had been discussed by Internal Operations Committee members earlier this year as the city was developing a red flag policy.
That policy, which was approved, allows the city to collect social security numbers from renters in order to collect delinquent bills through Iowa's income offset program.
The city used to be able to place a lien on a landlord's property for a tenant’s unpaid utility bills, but a state law that went into effect in July prohibits the city from continuing this practice as long as the landlord completes the proper paperwork. During those earlier discussions it was stated by Kinser and City Attorney Jeff Farwell that the city did not have proper staffing levels to collect and track deposits.
At-large councilman John Rowland, who is also on the IOC, pointed this out during Thursday's meeting.
“We were told then that the staff couldn't do it because it was too cumbersome and they didn't have the manpower,” Rowland said. “I'm stunned by the turnaround here.”
Kinser admitted the previous statements that the city could not handle the deposit method were wrong.
The city modeled the rental deposit proposal after a system that is being implemented by Bettendorf, one of the other Iowa cities that does not own its own water.
Because the city cannot shut off the water if bills are delinquent, officials are proposing a rental inspection serve as an extra layer beyond the deposit.
If the landlord completes the paperwork in order to be lien exempt per the law, a rental inspection would triggered. This would be performed at the landlord’s expense: $37.50 or $18.75 if there are no issues or followup is not required. The landlord could waive this inspection if within two weeks of being given notice by the city, the city receives the application and deposit from the renter.
If the application and deposit are not given to the city by the time of the rental inspection, the property could lose its status as a registered rental. If the property is not a registered rental, the city could use the lien process to collect unpaid bills.
In the event that a renter has filled out an application, submitted a deposit to the city and has a delinquent bill, the deposit will be used to cover those costs. If the deposit does not cover a delinquent bill, the city will use the renter’s social security number to collect through the state’s income offset program. Further, if the income offset program does not help, the bill will be sent to a collections agency. The specifics on how a delinquent bill would be handled by the finance office are still being worked out, Kinser said.
This new process would require the addition of a permanent part-time rental inspector who would be paid out of the sewer fund and housed in the Building and Neighborhood Services department. Kinser estimates this will cost the city between $16,332 and $19,356 a year, plus a one-time cost of $6,3000 for a vehicle and computer.
According to BNS Official Mike Harmon, the city currently has the tools to revoke a certificate of occupancy on a rental if the sewer bills have not been paid.
In fact, the city in 2009 denied a liquor license renewal for Scrub Pub because it had more than $40,000 in unpaid sewer bills.
Ward 4 Councilman Paul Gassman questioned why this hasn't been used on another property that has more than $350,000 in unpaid sewer bills. While not referred to by name during the discussion, it was recently uncovered that a bank was pursuing foreclosure on the Miller Ridge apartment complex due to unpaid debts including more than $350,000 in unpaid sewer bills and inspection fees.
According to Harmon, although one of the conditions of the compliance certificate is that it can be removed if there are unpaid bills, inspectors have never looked into whether bills are paid before performing a rental inspection.
"Until we had the issue with the large complex it was never a part of our administrative process," Harmon said "Was it an oversight? Probably."
He said it will be part of the “administrative process” the department uses during inspections going forward.
The Committee of the Whole moved this item forward with Gassman and Ward 1 councilwoman Maggie Klaes casting the dissenting votes.