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HomeMy WebLinkAbout06-24-19 Utilities SpUTa g,� ., C .,,; .e YV� 18653 OFFICE OF THE CITY CLERK KAREEMAH FOWLER, CITY CLERK UTILITIES JUNE 24, 2019 4:25 P.M. Committee Members Present: Jake Teshka, Dr. Oliver Davis, Sharon L. McBride, Regina Williams-Preston Committee Members Absent: None Other Council Present: Tim Scott, Jo M. Broden, John Voorde, Karen White, Gavin Ferlic Other Council Absent: None Others Present: Graham Sparks, Bob Palmer, Ryan Wrobleski, Morgan Gonsoski, David Moses, Shanita Hunt Presenters: Eric Horvath, Kim Thompson Agenda: Update- Public Works Response to HB1347- Eric Horvath, Director of Public Works Committee Chair Jake Teshka called to order the Utilities Committee meeting at 4:25 p.m. He introduced members of the Committee and proceeded to give the floor to the presenters. Update- Public Works Response to HB1347- Eric Horvath, Director of Public Works Eric Horvath, Director of Public Works for the City of South Bend with offices located on the 13th floor of the County-City Building, stated, Thank you Councilmember Teshka and members of the Council. I'm here to talk to you about House Bill 1347 which did a couple of things. Specifically, I want to talk about the provisions that are relevant to the Water Department because I think that's what is most relevant to our Utilities Committee here.This House Bill did a couple different things. First(1st) and foremost, it established a Policy Review Committee to receive customer complaints and established a process through which those complaints would be handled. It also allowed the Attorney General's Office to provide mediation of unresolved disputes. That was a portion of the bill.Another portion of the bill was preventing local units from placing liens for unpaid water bills. That is what's relevant here. It prevents us from filing a lien on a property for an unpaid water bill. He continued, Furthermore, it also prevents local entities and other utilities from requiring that the owner pays the utility bills. This is for water, gas and electric only. If you have water, gas or electric service in the tenant's name, we cannotrequire the owner to pay those unpaid portions. This was in the last legislative session, so, we've been scrambling to try and figure out how to put together a program to handle this because currently, we do have a requirement that they are in the INTEGRITYI SERVICE' ACCESSIBILITY JENNIFER M.Corns N BIANCA L.TIRADO JOSEPH R.MOLNAR CHIEF DEPUTY/DIRECTOR OF OPERATIONS DEPUTY/DIRECTOR OF POLICY ORDINANCE VIOLATION CLERK EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 1227 W.Jefferson Blvd.I South Bend,Indiana 46601 I p 574.235.9221 I f 574.235.9173 I www.southbendin.gov CITY OF SOUTH BEND I OFFICE OF THE CLERK owner's name. So, we have changed that. That is going before the Board of Public Works on Tuesday morning. We hope to have those in place by July 1St. I think that answers the question brought forth by Mr. Murray Miller. By July 1St, we will have a new process in place. That will require the owner and tenant to make sure they get the information transferred to the tenant's name. To be clear,a lot of times people see their bill as their water bill.As you all know,there is a number of different things on there.There is trash, sewer, sewer and water insurance,and all these different parts to the bill and they all have different requirements. The water portion of the bill, we will not be able to place a lien on. We will have to try and recover any unpaid bills, if somebody leaves, from the tenant. Any other portions can still be recovered from the owner. We can still file liens on those components. He went on, In the case that the owner would like to pay the bill, they'll come in and we will put the bill in the tenant's name and they will start being billed for all of those services. Again, that is as of July 1St. The only case where we can't do that is the case where we've got something like a master meter where there is one (1)meter for, say, a large apartment complex. We would have no way of aggregating those services,so,that will have to remain in the owner's name. But,if they've got a separate meter and it's a landlord-tenant relationship, then they can have the tenant responsible for paying the bill and our rules and regulations will allow for that to happen. In addition, it will allow for us to follow up and try to recover costs from the tenant on the water side and on any other charges on that bill, we will still go through the process we do today if we get to that point. I'm happy to answer any questions but I have the Director and Assistant Director of Utilities here who are also happy to answer any questions. We are doing our best to try and put this together pretty quickly, using the existing Naviline Billing Software we have in place. As we move forward with our new billing system, which will be rolled out the spring of next year, it would become a little easier to do some of these things. In the meantime, we have a process in place that will be going to the Board of Public Works on Tuesday morning. Committee Chair Teshka opened the floor to questions from Committee and Council Members. Committeemember Dr. Oliver Davis asked,People's ability to get water is not based on their credit score, is that correct? Mr. Horvath replied, A deposit may be needed, dependent on credit worthiness. Committeemember Dr. Davis interjected, What would that deposit look like? Can you describe what happens when someone has bad or challenging credit? Kim Thompson, Assistant Utilities Director with offices located at 830 North Michigan Street, replied, Credit worthiness is based mostly on utility payment history. That is how we look at credit worthiness. If the person applying for service fails, they would have a two (2) month water and sewer deposit, the estimated cost of two (2)months of service. Committeemember Dr. Davis followed up, At that particular site? Ms. Thompson replied, It would be based on the meter size,yes, at that particular site. Yes, that is correct. EXCELLENCE ACCOUNTABILITY INNOVATION I INCLUSION EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TTD 574.235.5567 www.southbendin.gov 2 CITY OF SOUTH BEND OFFICE OF THE CLERK Committeemember Dr. Davis stated, Ok, so because everyone is different, if that site is basically a seventy-five-dollar($75) site or a fifty-dollar ($50) site then it's one hundred dollars ($100), or one hundred and fifty dollars ($150)? Ms. Thompson replied, Right. Only up to seventy dollars ($70) would be collected. The choice is then to pay the rest in eight(8) weeks of installments. But, yes, it would depend on the meter size at that particular site,so it could be somewhere between seventy to one hundred and twenty dollars ($70 - $120). Committeemember Dr. Davis then asked, And the deposit is only based on the water part, and not the trash part? Ms. Thompson replied, It is the entire utility payment. Mr. Horvath stated, It's not on somebody's credit rating from one(1) of the financial TransUnions or something like that. Committeemember Dr. Davis interjected, But it's based on their ability to pay their NIP SCO bill? Mr. Horvath replied, No,just the water and sewer bill. Ms. Thompson stated,That is what we look at,if someone has not been a customer,they can bring something showing they have payment history with another utility,but,if they've been a customer here, we would look at that history. Committeemember Dr. Davis followed up, So, if they are brand new? Ms. Thompson replied, They can demonstrate their credit history at a different utility. Committeemember Dr. Davis stated, I'm at peace. Thank you. Committeemember Regina Williams-Preston stated, You're getting a new billing software which sounds awesome. I had lots of concerns from constituents about when they get their water turned off, and maybe it's off for a couple months, then they go back to turn it back on, they have to pay the entire amount of the time when it was off. Can you clarify that for me? They were not getting water but then they have to pay for water they didn't get. Ms. Thompson replied, It is hard to speculate without having a particular situation in front of us. So, it is true that if someone is disconnected for non-payment, when they come to reestablish service, typically that's the next or even same day, they have to pay their entire pay due balance. From the time we disconnect service,they are about two (2)months behind. If you pay before you disconnect,then you just pay what you owe by that date. If you pay afterward,you pay your entire past due balance. Now, typically if someone was disconnected and they did not establish service within thirty (30) days, we would terminate their account and all charges would stop. The only time, and it's hard to answer without a specific pay stub, that a customer would continue being charged is if, perhaps, they turn their own water back on. If that happens, and there is significant usage and we find there has been theft, it could go on for a couple of months. We shouldn't have cases where people are being billed for months of service they didn't receive, and we are happy to EXCELLENCE ACCOUNTABILITY INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TTD 574.235.5567 www.southbendin.gov 3 CITY OF SOUTH BEND OFFICE OF THE CLERK look into any particular case if you have any questions. The new software will do that more automatically and it is going to be fantastic. If you didn't pay and you were disconnected, after about seven (7) to fourteen (14) days go by, your account would terminate, and a final bill would be sent out. Committeemember Williams-Preston followed up, That is why I was glad to hear about the new software. I called the water company and I don't remember who I talked to, but they were saying the billing system isn't set up to turn it off. In this particular case, someone didn't have water going to their house. They were using their neighbor's shower and everything else for like four (4) or five(5)months. Then they called, and they could never pay that past due balance. Ms. Thompson stated, It is the case that someone has to actually do it in the software. It has to be reviewed and turned off. You are right. Committeemember Williams-Preston followed up, I see. So, if they didn't know, it could have continued to bill? Ms. Thompson replied, It could. Also, if a customer had a leak, it could make it look like there is active service there. So, there are different scenarios that happen but if that person comes and asks about it, we would take a look into that. People can dispute that. Councilmember Jo M. Broden asked, On your deposit policy, am I correct that there will be a change as of July 1st? Could you please emphasize the change itself? Ms. Thompson replied, The change will be collecting the deposit before we start service. Right now, and for the past two (2)years, we have billed the deposit on the first(1St) or second (2°d)bill. What we've found is it dosen't make a very effective deposit if it is billed a few months after services are started. So, we do have cases where someone comes in, starts service, has service for two (2) months, they are disconnected, they didn't ever pay the deposit and so they leave with a few hundred dollars of debt that is never collected. So, that is a change. As a condition of starting service, at least the first (1St) seventy dollars ($70) of the deposit will be collected. The balance will then be billed. Councilmember Broden followed up, I'm curious of other cities and the impact of this legislation. Do other cities bundle charges for services, characteristically on the same bill? Mr. Horvath replied, It really depends on the area. There are a number of municipalities that have a private water company, so,they wouldn't have that. But, for those entities that have sewer,water and trash, it is most commonly all on one (1) bill because you are sending out one (1) bill. There are six (6) costs associated with billing that are reduced by putting those all on one(1). Councilmember Broden then asked, Do you anticipate any revenue impact from this measure in terms of collections?Previously,there was a land or home owner,now this is flipping to the tenant, at least on the water portion. Mr. Horvath replied, That was one(1) of our initial concerns, quite honestly. We were concerned that by having certain ones that weren't paid and were uncollectable, on a cost per service basis model, all of those costs get paid by the rate payers. So, what that does is that those folks paying EXCELLENCE ACCOUNTABILITY INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 1574.235.9173 TTD 574.235.5567 www.southbendin.gov 4 CI"1Y OF SOUTH BEND OFFICE OF THE CLERK on time are paying more because they are covering the bad debt of those that don't. We wanted to prevent that from happening as much as we could, but still live within the letter of the legislation. That is why we've gone to this tiered approach where we've got part of this that we will still lien, and then we've got deposits to cover part of this, as well. Hopefully, that mitigates some of that but that is one (1) of the things we will look at. Councilmember Broden stated, I think that would be interesting in terms of the context of other cities and if they are having difficulties. Sometimes, or even oftentimes I'd say, these things are passed downstate without the real impact known on the local level. Some of that collaborative impact from other cities, I think, will be important to inform this a year from now. Committee Chair Teshka stated, We talked about how it is incumbent upon the landowner and the tenant to get those services transferred. Are there any efforts to push out and get this information out? Are we going to be in touch with REIA? Press releases? How is all that going to be handled? Ms. Thompson replied,We do plan on putting it inside the water and utility bill. In fact,we've had several property managers who have come to speak with us. We do plan to push that out to the folks who already have come and asked about it. Then we will have KBAs on our 311 Portal that explain the requirements for starting. Committee Chair Teshka stated, I know I've heard from a lot of landlords myself. I know they were following this legislation pretty closely, so, I think a broad swath of them are up to date. But, for those that aren't, I wanted to see what that was. Mr. Horvath stated, Mr. Miller's second (2nd) question earlier this afternoon was if someone had a bill and they weren't using. That is true. On sewer, we do have a base charge. Rate structures are all different and you've got variable rate structures that are increasing or decreasing or set. The way we've got ours set up is our fixed charges, which we've got certain costs that are fixed such as the sewer, the ground, the bill, those are all costs that aren't variable. Then we've got variable costs like how much water you use and how much sewer we have to treat, because we have to do additional electricity for that and treatment chemicals, all that stuff. A lot of the times,those fixed costs are built into a base charge and that is pretty common in utilities. You'll see it with electric utilities as well. So, if you didn't use any electricity in a month, you'll still get a base charge. That is same with the sewer, you'll still get a base charge. You just won't have that additional use charge. So, you'll be billed at zero (0) consumption, but you'll still have a bill. We have a base charge but that also includes a minimum use. Councilmember Tim Scott stated, I would like to discuss this at a later time.There have been some concerns about that. I think we and the public need more education on that. Councilmember Broden stated, Councilmember Teshka touched on this but I would also like to support the need for a real robust public awareness. 311 is kind of passive. They call 311 when they have a problem, but I think this potentially could blindside a lot of people who are trying to charge residency or start a rental situation. I think this is significant and even though that seventy dollars($70) I commend you for massaging the actual collection stuff,but nonetheless, a seventy- dollar ($70) charge that you have to overcome in order to start service, that is not a small charge for individuals in our community. As long as it's out there and people are aware, a multi-pronged approach would be beneficial. I appreciate you reaching out to the landlord side, but frankly they EXCELLENCE ACCOUNTABILITY INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227 VV.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f574.235.9173 7TD 574.235.5567 www.southbendin.gov 5 •CITY OF SOUTH BEND OFFICE OF THE CLERK have been, in more likelihood, following this downstate because they have the benefit of associations that track this type of change. Joe Citizen is probably less likely to be aware of this. Mr. Horvath replied, I appreciate that, and we will work with our Marketing Director on that. I hear your concerns and I would also say there is a lot of misunderstanding of what this bill is and isn't. We've heard from a lot of landlords who are tracking it who are pretty sure this has to do with all sewer, water and everything. We have to make sure that information is out there so people know what it is and what it isn't. Committeemember Sharon L. McBride stated, Thank you for the work you've done. It has come a long way from last year's discussion to you guys working on it. Whatever you guys need as far as getting information out there, I'm willing to help in whatever manor or capacity. Whatever we need to do, I just want to say thank you for that. With no further business, Committee Chair Teshka adjourned the Utilities Committee meeting at 4:48 p.m. Res•ectfully Submitte• 0 IF ir - • . e Teshka, Committee Chair EXCELLENCE j ACCOUNTABILITY INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TTD 574.235.5567 www.southbendin.gov 6