SHELBY – Three ordinances concerning the security deposit fees for utilities passed in Shelby City Council on Monday, doubling the deposit fee for some future customers.
For residents in the city of Shelby wishing to bundle water, sewage and electric services through Shelby Municipal Utilities, each service will now require a $100 security deposit. This brings the total security deposit for all three services to $300.
If residents wish to request water services only, or sewage services only, a deposit of $150 will be required for the respective services individually. A deposit of $200 will be required for residents requesting electric services only.
This is a change from current Shelby Municipal Utilities policy that requires a $150 deposit for water, sewage and electric services individually, as well as a $150 deposit for all three services bundled. This increases the bundle charge by 50 percent, from a $150 deposit for all three services to a $300 deposit for all three services.
Three separate ordinances addressing each utility service – water, sewage and electric – were all officially passed by a 4-1 vote during Shelby City Council on Monday night. The dissenting vote came from Councilman Charlie Roub, despite Roub voting for the ordinances during their past two readings.
“I think we’re better off taking a look at the policies regarding connection and disconnection, and maybe taking a look at how we’re doing our collections rather than inconveniencing people or making it impossible for them to obtain utilities,” Roub said.
“Most of the people paying deposits are renters, and a lot of those folks are just starting out. Why in the world are we throwing rocks in the road to slow them down when they’re trying to improve their lives?”
Members of council acknowledged Roub’s concern of affordability for Shelby Utilities customers, but pointed out the city’s incredible loss in money from utilities customers defaulting on payments. According to Director of Utilities John Ensman, in 2015 alone there was more than $50,000 in outstanding debt owed to the city; hundreds of thousands of dollars is owed over the past decade.
“The Utilities office has exhausted the forms of how we collect these delinquencies,” Ensman said. “We’ve used an outside firm, which cost us. We’ve used our current law director and overwhelmed him with hundreds of delinquencies. From the utilities side I would seek direction from council, what are we supposed to do?”
Law Director Gordon Eyster confirmed that a collection firm out of Cleveland was used by the city to attempt to collect the delinquent payments, and essentially nothing was done. In more than five years the collection rate was zero, and the firm did not sue a single customer in the city of Shelby.
“Through this council’s action, we took it upon ourselves to bring legal action against every defaulting customer in the city of Shelby that owed more than $75,” Eyster said. “I took on 200 to 300 cases in the last several years, which is where this legislation stems from. It just doesn’t cut it where we’re at.”
Councilman Nathan Martin pointed out the increase in utility security deposits has been discussed at length in the Utilities and Streets Committee, which Martin chairs. He again brought up the outstanding debt that is owed to the city of Shelby in utility payments.
“The folks that are the biggest offenders are the transient community, and they tend to jump between multiple locations causing a burden on the city to where a lot of folks who do the right thing and pay their bills on time are indeed footing the bill for these folks,” Martin said. “There has to be some point that we’re able to collect on that.”
Other members of council echoed that unpaid utility bills shouldn’t fall on the shoulders of diligent utility customers. Rather, as Councilman Garland Gates bluntly stated, doing nothing is not an option.
“Doing nothing, I think, insults our customers who do regularly pay their bills in full every month,” Gates said. “We don’t want to dis-incentivize people from paying their bills.
“This is a fact-based decision,” he continued. “Here are the hard numbers we got from the utilities office that justifies these three pieces of legislation.”
Before the final vote, Roub clarified that he realizes there is a problem regarding utilities collections from delinquent customers. However, he reiterated his belief that the problem lies in the policy.
“I’m simply stating that I don’t think that doubling the deposits is the way to handle it,” Roub said. “I think it would be better handled by changing the policies within the utilities department as to what point disconnections should be made. Doubling the deposits I don’t think is going to make a big difference.”
