To the editor:
Much has been said and written about current HB 1165, and last year’s HEA 1347, bills designed to prohibit municipally-owned utilities from holding landlords accountable for their tenants’ unpaid water, gas and/or electric utility bills. It’s time to set a few things straight about why it’s bad policy to protect one class of business owner from the debts incurred on their property, through the operation of their business, at the expense of all other municipal ratepayers.
Our municipal utility should have the flexibility to structure our billing in a way that works best for Greenwood residents. What works here may not work well in other parts of the state, and vice versa.
It is always our first choice and preference to seek payment from the property occupants. However, municipal utilities must have the option to hold property owners liable when their tenants refuse to pay. The services provided go to the property and the property owner should be ultimately responsible for such services.
It’s easy to say that there are other options for collecting bad debt from tenants who dodge their utility bills. The reality is that these debts are very difficult to collect. Landlords realize this as well, which is why they are hoping to pass this responsibility entirely onto the municipality and other ratepayers of the utility.
For the larger investor-owned utilities, it is less impactful to the individual ratepayer for bad debts to be absorbed across a larger customer base or written off as a loss on the financial statements. For a municipal utility, oftentimes an accumulation of bad debts must be spread across the ratepaying base, resulting in rate increases for everyone.
In Greenwood, we recovered $417,000 in unpaid bills during 2019. While this cannot be attributed only to those covered by HB 1165, it’s important to remember the only other mechanism to make up for the lost revenue is to raise rates on the rest of the ratepayers. Under HB 1165, landlords would be protected from bad debts that can accumulate for services provided to their properties when their tenants do not pay. We think this is unfair to the other ratepayers.
The vast majority of renters and landlords in Greenwood are good actors who pay their bills. Unfortunately, the General Assembly is poised to take a broad brush approach and punish the municipalities and ratepayers who are doing it right, to the benefit of certain business owners who don’t think they should be accountable for services provided to their properties and thus want to absolve themselves of this risk of doing business. I urge Hoosier lawmakers to oppose this bill and help municipal utilities, designed to consider the specific needs of their city or town, manage rates and hold property owners accountable when absolutely necessary.
If you would like to contact your legislator to share your opinion on HB 1165, visit http://iga.in.gov/legislative/find-legislators/.
Gregory Wright Jr.
Controller, City of Greenwood
