With nearly $500,000 in default accounts on the books, the city of Redmond is considering changing its utility billing policies for what would be the second time in five years.

“The current policy really affects our staff workload,” said Interim City Manager Sharon Harris. “For a week every month, we have to pull staff from other departments. They’re handling an average of 600 accounts the week before shutoff notices.”

Several utility billing issues have plagued Redmond for years: deciding who is ultimately responsible for city utilities delivered to rental homes, whether to collect a deposit, how much of a deposit, and who to go after for unpaid bills. The current policy sets up accounts in the names of tenants and requires deposits in only some cases.

According to Harris, in 2001 the city council requested a stop to the collection of deposits, thinking that it discouraged renters from living in Redmond. By 2005 the city was collecting deposits from tenants with poor payment histories and had changed its policy of not notifying landlords when tenant’s accounts were past due. In 2007, after petitioning by property owners, the city added a landlord/tenant agreement to the mix, so landlords could have more control over which tenants were allowed on accounts. And in 2012, again after requests by owners of rentals, the city added a deposit policy that allowed landlords to require tenants pay a $300 utility deposit.

In order to decrease their workload, city staff have requested the council’s permission to revert to the policy that’s been on city code books all along: “The property owner is responsible for all charges prescribed in this chapter,” gradually phasing all rental accounts into landlord-only billing.

But after three representatives from local property management companies attended a recent meeting to voice objections, the City Council asked staff to delay the request and keep working on solutions.

“Tenants should be responsible for the water they use,” said Kevin Restine of Plus Property Management. He listed several concerns, including encouraging careless water usage, discouraging investors from buying rentals in Redmond, and making it harder to find renters able to pay increasingly large deposits or rents.

Terry Flora-Turner of High Desert Property Management said she was shocked at what the city deemed a solution to the problem, speculating that a change might prompt owners to raise rents as much as $100 a month.

“There’s a reason other Central Oregon cities aren’t doing this,” she said.

The city of Bend doesn’t have a set policy as to whether tenants or landlords are billed for city services, according to Christine Trask, lead utility billing clerk. “They have to pick one or the other and we have an agreement to be signed,” she said. A $125 deposit is required from any new account holder, either tenant or landlord.

In Prineville, while accounts can be in either the tenant or landlord’s name, the property owner is ultimately responsible for all debts, said Rhona Barney, utility billing supervisor. Most property owners prefer utilities to be billed to tenants, she said, but they do receive a copy of shut-off warning notices for delinquent accounts. Deposits of $100 for sewer and $40 for water are collected from the account holder, she added.

Mike Hoover with Windermere Real Estate told the councilors and staff, “This is not our problem; you need to solve your own collection issues.” He suggested that how the city sent late due notices and enforced payment was the root of the problem.

Local business owner Ed Petersen, who protested Redmond’s $300 optional deposit during his 2012 campaign for city council, suggested the problem really began when the city eliminated mandatory deposits in 2001. “I’m okay with mandatory deposits on new accounts, but it should be for everyone, including homeowners, and it should be lower.”

Petersen also suggested that landlords might have contributed to the problem with frequent requests for policy changes.

“They buy property as an investment. When you do that, you take a risk that you have to be responsible for,” he said. “I have a business but the city isn’t helping me with my debts. Landlords can’t have it both ways.”

The city’s current policy of billing tenants puts city staff in an unwinnable position of mediating between landlord and renter, Harris told the council. The key week with late notices and shut-offs is hard on staff, she said, with emotional appeals and a heavy volume of phone calls and walk-in clients.

In an email interview after the meeting, Flora-Turner said that her concern is not just for property owners but for tenants priced out of rentals.

“I really see this more as a collection problem for city,” she said.

A subsequent meeting for property owners/manager and city staff after the council meeting had a low turnout, Flora-Turner said, frustrating efforts to get a consensus on the best solution.

Restine, president of the Central Oregon Rental Owners Association, said that his organization is making an effort to reach out to property owners to poll opinions about the changes Redmond is considering.

As for why Redmond seems to have so many delinquent accounts, he points to what he terms the lack of vetting of account holders. “Even the power company requires a deposit for anyone without a previous account or with bad credit,” he said.

By the numbers

Redmond households receiving city utilities: 8,160

Redmond residential rentals: 3,590

70 percent of shutoffs are from rentals

$470,000 in defaulted utility bills

Source: City of Redmond