By Dr. Rent
There will be political discussion in Madison this year, one that will probably not generate much press, but one that has landlord’s and municipal government’s closest attention, both parties waiting to weigh in.
The proposed new law has to do with municipal owned utilities. In the Wausau area, electric and natural gas service are provided by Wisconsin Public Service (WPS). However, the water and sewer service are provided by utilities created by the City. Wausau Water Works provides water to Wausau residents, Weston Utilities to those living in Weston, etc. In some communities (such as Shawano), the municipal utility also provides electrical service.
The city itself does not provide you with water, instead it is an agency owned and controlled by the city. It may look like this is just splitting hairs, but it is legally a fairly important split.
For the most part, these municipal utilities have to play by the same rules as private utilities such as WPS. They fall under the regulation of the Public Service Commission (for the most part, but there are some exceptions).
However, there is one tool that these utilities can use that companies like WPS can only dream about. If a bill goes unpaid, the utility can ask its owner (the city – otherwise known as Guido) to have the past due water bill added to the property tax roll of the property as a special assessment. That means that this past due utility bill will be a debt secured by the real estate that has priority over everything, including mortgages and civil judgments. Wow, what a tool! (I need a collection guy like Guido.)
You may be thinking… well that seems fair. They need to get their money. The problem with rental properties is that the property owner and the person who incurred the utility bill, not the same person. A tenant can run up a $300 water bill. Then leave without paying it, without leaving a forwarding address. The City will try to send a final bill to the tenant, but when it comes back, they just send a copy of the bill to the landlord. If, by late in the year, the bill has not been paid; there it is on the property tax bill.
The proposed law will not take away this power of using the tax rolls as collection. It will, instead, make the utility make a bona fide effort to collect the bill from the party who really owes it before using that tool.
The way the system is now… if bill is unpaid, BAM-TAX BILL. Why on earth should the utility make the responsible party pay if collection is that easy? The proposal would put on the requirement that bills can only be put on the tax roll if they are a civil judgment against the person whose bill it is.
Wausau Water Works would have to try and locate the person, take them to small claims court, and get a judgment. And maybe, in the process, actually collect some or all of the bill by making payment arrangements with the guilty party. This is what every other utility (such as WPS) has to do. If water utility has a judgment and isn’t getting paid, they will still have their secret weapon.
Will it create more work for the utility, possibly create lost revenues for bills they don’t obtain judgments on? Yes, it probably will. Will this create larger utility bills to recoup this cost? Yes, it probably will (however, since they can still collect from the tax bill, I doubt it would be a significant cost increase).
Most importantly though, this law now makes the situation more fair. Although land-owners will probably still end up paying most of these bills, at least the City had to make an honest effort to go after the responsible party.
P.S. Madison landlords are currently facing a challenge on the municipal level. The Sierra Club has approached the City Council, and they are seriously considering the proposal of requiring all lights in apartments either be Compact Fluorescents or LED’s.