CASPER — Despite some anger and frustration from local landlords, the City Council is moving forward again with an ordinance change that will make those landlords responsible for the delinquent utility bills of their tenants.
Most on the council gave a thumbs up Jan. 2 to the first reading of a city plan to amend the utility ordinance to notify landlords when a tenant misses a utility payment, but also make them ultimately responsible for paying them if tenants don’t.
A week later after hearing some angry backlash from area landlords, the council tabled the issue, but the on-and-off proposal is on again after the council this week announced a second reading of the ordinance will happen during its regular meeting at 6 p.m. Tuesday at the Lyric Theater.
"I guess I am in favor of going ahead and making the landlord responsible,” said Mayor Steve Cathey during the Jan. 2 work session. “It is their business, their property, they are choosing to rent it, they are choosing who they are leasing to, and potentially it’s up to them to be running the credit checks.”
City Councilman Ray Pacheco urged the council to maintain stewardship of taxpayer money and make a politically tough decision to hold landlords responsible and not make residents who pay their utility bills responsible for those who do not.
“I have heard from landlords from both sides; some who are very supportive of us, understanding our predicament and some that are very angry,” he said. “So, we don’t get in these city council seats to make easy decisions. I think it comes down to the business.”
Number Of Unpaid Bills
City staff have shared that the city usually has to eat $700,000 to $800,000 in unpaid utility bills a year.
City Accounts Receivable Supervisor Brandy Coyle has said the city turns unpaid bills over to a collection agency. The agency tries to collect payment over a five-year period. If bills remain uncollected during that time, it becomes necessary for the city to write off the expense.
For fiscal year 2023, the city turned 2,877 accounts over to the Collections Center of Wyoming to try and collect $681,888 over the next five years. The city pays 24% commission to the agency.
The city this week issued a news release advising residents about Tuesday’s second reading and also issued a fact sheet meant to help landlords better understand the changes.
Under the proposed ordinance:
Landlords will have access to accounts to determine if they are delinquent.
Landlords will receive delinquency notices, something that does not happen now.
Landlords may request shutoff of services if an account is delinquent, something they cannot do now.
New tenants will be refused services until delinquent bills are collected. That is a change from current practice that allows services for new residents even though past tenant bills are unpaid.
City Attorney Eric Nelson told the council that a Wyoming Supreme Court decision in a similar situation involving Thermopolis makes it clear the city has authority to hold landowners responsible for unpaid utilities.
“It is legal and within the rights of the municipality,” he said.
Landlords in Casper who talked with Cowboy State Daily remain wary of the proposal.
Sharon Hubbard of Garden Gate Real Estate, which provides property management for 35-40 property owners, said that the city’s landlords “are just up in arms.”
“If the guy before you stiffs the water department for $200 or whatever, and the owner has to pay it … it just increases rent,” she said. “The better solution I would say would be (for the city) to choose a higher deposit and be more strict with shutoffs.”
Hubbard said property owners believe ultimately it will be tenants who will suffer.
“It’s another expense, just like property taxes going up or whatever, and that is reflected in what the rent rates are,” she said. “When gas is going up next month, that is going to be reflected in rental rates, and the rental market is very tight as it is right now.”
Hubbard said most multi-dwelling units she is familiar with already have utilities being paid by landlords. She said the big shift will come with rental homes and mobile homes that are not based in a mobile home park.
Landlord Glen Taylor, who once had 30 properties and now has 10 in the city, said he has problems with the proposal.
“Let’s pretend I am leasing a vehicle, which I am,” he said. “If I don’t pay for the gas in it, will Nissan Motors be responsible for that gas bill? It’s really no different.”
Taylor said he believes most landlords will need to start collecting a utility deposit along with a property damage deposit. He also advocates that the city collect a larger deposit and not put the burden on landlords.
“If they don’t, then landlords are going to have to, and they are going to do exactly what they don’t want to do. They are always whining about the low-income housing and all they’re going to do is exacerbate the problem.”
Elderly and low-income residents will be those most impacted by the change, Taylor said.
“They are going to have to come up with a bigger deposit, and a lot of times the difference between being able to rent a house or rent an apartment or rent any kind of a living facility has to do with the up-front deposit costs, and it’s not just going to be conducive to helping,” he said.
City Staff Recommendation
During a recent City Council work session, the city’s Financial Services Director Jill Johnson and Accounts Receivable Supervisor Brandy Coyle recommended the council continue its current deposit policy. The policy returns deposits after 12 months of good payment history. If a payment is missed, for example, after six months of on-time payments, the deposit is held for another 12 months.
Johnson told the council that Cheyenne and Laramie are the only two municipalities they know of in the state that do not put tenant names on utilities. The owners pay the bills.
“What is the downside in having the property owners named?” asked Councilwoman Jai-Ayla Sutherland.
“There is no downside. They are already taking care of their property,” Johnson said. “They are already doing all of the things that the regular utility account owner would be doing. They did not express any kind of downside. In fact the upside is the lack of collections.”
City Councilman Kyle Gamroth said he appreciated the city’s predicament with collections, but that he has not heard complaints from other city utilities ratepayers, only from landlords. He argued that other entities such as Walmart and other businesses also face losses, but factor those into their business model.
“Maybe some of my colleagues are having different conversations than I am. But I have not had anybody reach out to me frustrated, shaking their heads really upset about the fact that they are having to pay a slightly higher utility rate to cover the shortfall,” he said. “However, we have heard dozens and dozens of people state their opposition to this.
“I totally understand the merits of it, but I am going to continue to insist at this time that we uphold the status quo myself.”
Casper City Manager Carter Napier advocated that he would rather the council go to the Cheyenne and Laramie model if they did not want to accept city staff’s recommendation.
At the end, the majority gave the original proposed ordinance changes the thumbs up for a second reading next week.
“The majority of council doesn’t have any amendments,” Cathey said. “We will un-table it at the next meeting.”
Dale Killingbeck can be reached at firstname.lastname@example.org.