Mayor

Donald Lyons and City Manager Kevin Anderson met for the better part of an hour and a half Tuesday night at Chestnut Towers with the Cass County Rental Association.

Many of about 20 landlords in attendance still feel frustrated at being stuck with unpaid utility bills from former tenants going back to 2007, as state law permits the city, which in its own fairness defense could have gone back farther.

Each side gave the other a respectful hearing and listened politely to each other’s points, since property tax bills will be coming around again in April, with landlords thanking the local government officials for attending their meeting and frequent critic Bill Lorenz came to their defense.

“We, as a utility company, really don’t get to choose who our customers are,” Anderson said. “You’re the ones who are choosing who our customers will be. When you rent to them, you have now selected them to be our customers. The only way we can reject them is if they owe us a bill — even if I have personal knowledge from being down to the convenience store and I see their check up there stamped with ‘don’t accept money from these folks again,’ I can’t say no.”

Potential utility customers must satisfy three criteria, Anderson said — paying any outstanding bills, posting the deposit and showing an appropriate lease for permission to live there.

Any judgment the city makes beyond that “starts to get into discriminatory practices,” Anderson said.

“There are very limited things we can do. I can’t ask if they have a job or not. And think about it from a practical standpoint. If you’ve gone through and done your due diligence and want to put a person in there and we say, ‘No, we’ve done our own check,’ I think we’re going to be having this kind of conversation pretty heavy.”

Anderson let landlords know of all the information that is available to them on the city’s Web site.

“We post agenda packets with minutes from the previous meeting, the agenda and background information that goes to the council. If there’s an ordinance, it’s in there with a cover memo from staff with details. No, it doesn’t ‘stick out’ as a new ordinance by itself (labeled) ‘here’s one landlords might want to pay attention to.’ From our standpoint, we could put ‘ordinances under consideration’ and ‘ordinances adopted in the last six months,’ or something like that.”

It was suggested tucking such notices in utility bills with the City Notes newsletter, but not all Dowagiac landlords live in the city and receive such bills.

“In defense of the city,” Lorenz said, prompting his neighbor, Anderson, to clutch his chest, “The Dowagiac Daily News covered this ordinance fairly extensively and it was pretty well explained. If you read the paper it was all in there. The one point that wasn’t covered that caught Vicky (James, who manages a 66-apartment complex) was that a lot of these bills would be retroactive. But as far as the city explaining what they’re doing, I think they’re doing about as well as can be expected. Landlords who live out of town particularly have a hard time with new ordinances.”

“I don’t have a problem with the new ordinance,” a woman said. “I have a problem with paying for someone else’s debt. I paid for my college loans. I didn’t expect my neighbor to pay for my loans.”

“The problem you’re running into is state law,” Lorenz said. “I understand exactly what you’re thinking, that the city contracts with a tenant for electric service. If that contract goes down the tubes, it ought to be the city’s responsibility to go after the tenant and collect their money. State law allows them to short-circuit that whole process and just dump it on the landlord. Is it fair? No.”

“Just because it’s the law doesn’t mean it’s the right thing to do,” she said.

“That’s a different issue,” Lorenz replied.

Anderson said, “Between 2001 and 2006, there was about a quarter million in bad debts that accrued that never went to special assessment. If you look at city audits, it shows up as write-offs for uncollectible bad debt, $217,000. We turned all of that over in late 2006 to collection agencies. From 2006 to 2011, the sum total collected isn’t very much. I’m sure I’m preaching to the choir when I say once it’s gone it’s gone and very hard to chase. That money’s shown as a reduction in assets.”

“The problem is the fairness of it,” James said. “The buck was passed from you guys to us without any notice or communication. We appreciate you coming and we need to work on this from here on out. It really hit my budget hard. The city can make us do so many things, I guess we’re going to have to pay more attention.”

“We only went back to ’07,” Lyons reminded. “We’re walking away from four years prior to that and almost a quarter of a million of dollars that legally we could have put on your taxes.”

The exchange began with a mayoral disclaimer, Lyons telling President Roger Leach, a Penn Township trustee, that since the city received no concerns beforehand, “we’re at a little bit of a disadvantage. We’ll do our best to answer your questions, but we have nothing prepared. Second, we won’t do anything to set policy without involving City Council. We can only talk conceptually and give your our opinions.”

Anderson explained the affidavits by which a landlord can absolve themselves of any responsibility for a tenant accruing past-due accounts.

“Michigan law is very clear for public utilities,” he said. “It gives public utilities the opportunity to place past-due utility bills as a special assessment on the properties at any given place during the year. It’s a standard in state law that has been adopted by City Council. There are several steps if a landlord wants to absolve themselves of that responsibility. They need to come in and sign an affidavit, swearing under oath that this person is a tenant of theirs and they need to provide evidence of that. From the day that’s signed and we’ve got a lease in place, anything that becomes past due will be solely the responsibility of the tenant. We tried to be fair to landlords as well as other utility-paying individuals in the community, so we also dealt with deposits and collection policies and we’re showing good signs of stronger collections. We’re monitoring these new policies this winter and we’re encouraged by the results. Two months into the season where we can’t shut tenants off, we only have outstanding $4,447. That’s pretty good shape, of which $756 we will not be able to collect from special assessments because of affidavits. Much better shape than we’ve been in the past,” considering Dowagiac bills some $620,000.