Piedmont Council considers doubling utility deposits
by Laura Gaddy
May 28, 2013 | 5226 views |  0 comments | 18 18 recommendations | email to a friend | print
A Piedmont utility worker cuts off the power to a residency because of the tenants being behind on their utility payment. Photo by Courtney Davies
A Piedmont utility worker cuts off the power to a residency because of the tenants being behind on their utility payment. Photo by Courtney Davies
The Piedmont City Council may decide next week whether it will more than double the deposits it requires from utility customers who rent their homes.

The proposal aims to reduce the money the city loses each year from renters who move without paying their last bills for gas, water or electricity offered by the city. Last year Piedmont utility customers shorted the city by $150,000 by failing to pay bills, according to utility supervisor Casey Ponder. Much of that debt — 93 percent — was incurred by renters who never paid their final bills, Ponder said.

Some city officials say by increasing the utility hook-up fees to $565 from $250, the city will be able to reduce the amount it loses from customers who don’t pay. Other leaders question whether $565 is too much money for a utility deposit, which would cover the deposits for gas, water, electric, sewer and garbage services.

“I’m still trying to learn more but I don’t think I’m going to be in favor of that,” Councilman Bill Baker said.

The matter was expected to come up for a vote at the last council meeting, but city leaders said the item was tabled because Ponder was unable to attend the meeting. Now the item is set to be discussed, and possibly voted on, Tuesday.

Officials from other cities’ utilities said that while both homeowners and renters fail to pay their bills from time to time, renters are more likely than homeowners to skip out.

“It probably is because it’s a little more tempting if you do rent as opposed to own,” said Scott Sligh, electric superintendent in Fairhope.

Municipal electric superintendents and supervisors said homeowners have a harder time escaping payment because they’re easier to locate. Renters, however, have less to lose because they can leave without paying the last month’s power bill with little consequence.

After they leave, the utility bills become the city’s burden. The renter is, in many cases, able to move to a new home and establish utilities in a family member’s name.

“We have a lot of people that move around,” said John Locke, the revenue officer in Alexander City. “They run a bill up in someone’s name and then they run to another house and they run it up in another person’s name.”

Earlier this year Piedmont officials began considering a move that would require tenants to list their utilities in their landlord’s names.

The topic has struck a nerve with landlords, who have worried aloud about how the proposed change might affect their bottom lines. That provision was removed from a list of changes being considered by the council.

“We were scared because our livelihood depends on the decisions that are coming up on this landlord deal,” said Robby Schoonhoven, a Piedmont landlord.

Other Alabama cities use or are considering a variety of methods to protect their bottom lines from customers who miss bill payments. Those methods include employing collection agencies, setting utility deposits according to customer’s credit ratings, raising reconnection fees and requiring customers to pay for service in advance.

City leaders said Piedmont once used a collection agency, but the contract with the agency was terminated after the arrangement failed to collect enough money. Ponder said his suggestion to check customer’s credit scores wasn’t adopted. He added that the city is considering requiring customers who have failed to pay their bills in the past to pay in advance.

Ponder said to implement a pre-pay system, the city would have to replace meters located at homes of residents who have a history of non-payment. That could cost too much, he said, to make the system practical for Piedmont.

If the city is able to move forward with the pre-pay system, he said about 500 residents would likely be affected by the change.

The City Council’s next meeting will be held Tuesday at 6 p.m. in the council chambers at 312 North Center Ave.

Staff writer Laura Gaddy: 256-235-3544. On Twitter @LJohnson_Star.

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