ORDINANCE 609

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1803-1

ORDINANCE 609

AN ORDINANCE AMENDING CHAPTER 13.28,

UTILITY BILLING PROCEDURES

BE IT ORDAINED BY THE BOARD OF TRUSTEES OF THE TOWN OF OAK CREEK

Section 1. Amend. Sections 13.28.020 Owner Liability - Lien and 13.28.030 Delinquent Charge - Placement on Tax Rolls shall be amended to read as follows:

13.28.020

Owner liability-Lien.

The owner or owners of any property or premises served by the electric, water and sewer utilities shall be held personally liable for any and all charges imposed under the provisions of Chapters 13.04, 13.12, 13.20 and 13.24 from the time such shall become due. Charges for electric, sewer and water service shall become and remain a lien upon any such property or premises served thereby until such charges shall be paid, and such charges may be collected from any owner or owners pursuant to Section 13.28.030. Any such lien shall attach to any lot or lots, building or buildings, comprising the property or premises served by said electric, sewer and water systems, and shall extend to the whole of such building or buildings, lot or lots on the premises thereby served. (Ord. 365 § 3, 1982)

13.28.030

Delinquent charge-Placement on tax rolls.

In addition to or alternatively to the foregoing, in the event that such electric, water and sewer charges shall not be paid when due, the town clerk may certify such delinquent charges to the county treasurer to be, by the latter, placed upon the tax rolls for the current year, to be collected in the same manner as other taxes are collected, with ten percent of the amount of such delinquency added thereto to defray the cost of collection, and all laws of the state of Colorado for the assessment and collection of general taxes and the enforcement of liens therefore, including the laws for the sale of property for delinquent taxes and the redemption of the same, shall apply. (Ord. 365 § 3, 1982)

Section 2. Severability. If any part or parts, sentence, clause or phrase of this Ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining portion of this Ordinance.

Section 3. Effective Date. This Ordinance shall take effect in accordance with the manner prescribed by law.

INTRODUCED, READ, ADOPTED and ordered published as provided by law by the Board of trustees for the Town of Oak Creek at its regular meeting held on the 24th day of March, 2011.

/s/: Nikki Knoebel

By: Nikki Knoebel

Mayor

ATTEST:

/s/: Karen Halterman

By: Karen Halterman

Town Clerk

Published in The Steamboat Pilot & Today

Publication Date: March 27, 2011

10257138

Published in The Steamboat Pilot & Today Publication Date: March 27, 2011

Comments

Scott Wedel 3 years, 4 months ago

Everyone in Oak Creek should read this ordinance and consider it's effect.

It is not merely using liens to collect a property owner's unpaid electricity bill.

It is a radical change to the landlord and tenant relationship because now the property owner is ultimately responsible for the tenant's electricity bill. Thus, what was once a private business relationship between the Town and the tenant is now the urgent business of the landlord.

Now the landlord needs to know the tenant's monthly bill, whether it was paid and how much deposit the Town currently holds for the tenant's electrical service.

It also fundamentally destroys tenant's rights during the eviction process. If the landlord is responsible for the electrical bill then the landlord has to be able to terminate electrical service (pull the meter). Thus, tenants could decide to wait for the eviction court date, but do so without electricity. How is the Town supposed to distinguish between a responsible landlord disconnecting service before tenants run up a big bills vs an irresponsible landlord that disconnects service to remove a tenant without going through the legal process?

A quick survey of other municipal utilities finds no other municipalities that potentially lien the property owner for a tenant's electrical bill. This is explicitly forbidden in PUC customer regulations, but municipal utilities are exempt from PUC regulations.

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Scott Wedel 3 years, 4 months ago

This is a terrible way to run the electricity enterprise (Town owned business). A well run business would first ask the question why the electricity deposit policy is failing to prevent losses. It would also recognize that the PUC was able to adopt customer protection regulations which apply to over 80% of Colorado's residents which has allowed private sector (Xcel) and customer owned (such as YVEA) electricity utilities to operate successfully. The PUC regulations allow a utility to collect a deposit that based upon historical and projected usage to cover the amount before the utility disconnects service. So the amount of deposit varies upon the utility's billing and disconnect policy.

Thus, if the issue is very high usage customers running up bills far greater than their deposit, then PUC recognizes the solution is for the utility to increase that customer's deposit to cover their bill. Thus, it would have been an understandable and normal change to Town policies to increase the deposit for high usage customers.

But moving to allow liens on the property for a tenant's electricity bill adds far more costs and risks to landlords which will then affect tenants than any amount of additional revenue that will be collected.

Just think of the total mess this is for the owner's of the trailer parks. Their resident's rent is not much more than potentially the electricity bill for a mobile home. So that landlord has to be extremely concerned that a tenant that moves out is going to leave a huge electricity bill.

It also puts the landlord in the awkward situation of not wanting the Town to work with a tenant with accepting a deposit over time or averaging utility bills or any of the other Town services with customers. What was the Town being helping a resident is now transferring liabilities to the property owner.

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Scott Wedel 3 years, 4 months ago

If I had known this was what was to be considered then I would have been there. The agenda item suggested to me that it was to not allow property owners to escape charges that person ran up while residing in the property. That could make some sense because maybe the Town gave the property owner a break on the deposit or maybe the Town was running into an issue with the banks or such skipping out on bills for all of the foreclosed properties around Town.

But potentially placing a lien against the property and hence making the property owner responsible for the bills is a radical change of policy that is most certainly not a common practice in Colorado and may be unique to Town of Oak Creek.

I verified with two Town Board members that the intent of the ordinance is as it is written - to make property owners ultimately responsible for paying electricity bills the tenants failed to pay.

It is a radical change in policy to make electricity bills the responsibility of the property owner. Yes, water and sewer bills are currently the responsibility of the property owner which is why the Town bills the property owner for water and sewer. In fact, the Town will refuse to bill a tenant for water and sewer. The Town will only send a water and sewer bill to the legal property owner according to Routt County official records. Thus, the Town recognizes that water and sewer bills are fundamentally different than electricity bills.

The fundamental difference is that water and sewer bills are a fixed amount. The property owner knows the amount that will be owed. A tenant cannot run up a huge water and sewer bill. The bill is even the same if the property is occupied or vacant. It is a fixed cost. An electrical bill can range from a huge amount to a tiny amount. Thus, the Town has historically billed the occupant for the occupant's electrical use. If the Town Board wants to pretend there is no fundamental difference between water/sewer and electrical bills then obviously the Town would stop billing occupants for electrical use and ONLY bill the property owner.

It is not a good business practice to ignore industry standards and find special customer unfriendly practices.

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Scott Wedel 3 years, 4 months ago

If the Oak Creek electricity enterprise is worried about failing to fully collect revenues then maybe they should look at all of their customers which they do not bill.

The electricity utility does not bill for electrical service provided to Town Hall, Town Museum, Decker Park, hockey rink, Public Works buildings, or water dept buildings. These buildings are also not charged for water or sewer. The sewer dept does pay for electricity because it's building is in YVEA territory.

Municipal water and sewer utilities in Hayden, Steamboat, Meeker, Craig, Ouray, Denver, Colorado Springs (literally every place I checked) charge government owned buildings the same as privately owned buildings. It makes simple good business sense to charge for services, especially services which could vary tremendously by how the building is operated. If a town building is not being charged for electricity then there is no incentive for the town to conserve electrical usage.

It is apparently a policy unique to Oak Creek to provide free utilities to town owned businesses. This is known to be many thousands of dollars of free service that the residents of Oak Creek have to make up in their utility bills.

Nor does the electricity enterprise charge the town's general fund for street lights. Colorado Springs, among others, has a municipal electricity and they all charge the government for street lights. Certainly, YVEA, Xcel and all non-municipal electricity utilities charge local governments for the electricity and servicing of street lights. It makes simple sense If street lights are free to the local government then they will be wasteful in where they are installed. There are street lamps in Oak Creek where the glass is painted black because neighbors did not want the light.

Public Works employees bill the electricity enterprising for their time servicing street lights so the amount the electricity enterprise should bill for street lights is directly comparable to what YVEA or Colorado Springs electricity enterprise charge government per street light. The amount is about $20 per street light depending on the wattage of the bulb and servicing issues. That is about $2,000 per month of free service the electricity enterprise is being forced to absorb.

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Scott Wedel 3 years, 4 months ago

There are also questionable items being billed to the electricity enterprise. The electricity enterprise is pay a substantial amount of the Town's road grader expense. It is being billed as if snow removal and road grading is using the road grader only three times as much as it is being used for electricity enterprise.

Nor does the electricity enterprise get normal time accounting listing the hours on what projects for labor provided by Public Works employees, none of which are certified linesmen or electricians. They are given periodic statements of total hours spent and reimburse Public Works without question as there is no data to question other than the total hours. No business would accept a bill from a major supplier that is just a total due without listing how much time was spent on what projects.

The good news for the electricity enterprise is that even as the official population of the Town has declined by 10% over the past year, electricity usage is up about 20%. Presumably, the commercial and residential personal use growing of mmj is increasing the overall electrical usage even as the number of residents decreases. The electricity enterprise has substantial revenues. If it were operated like a business that collected revenues for services provided and scrutinized their expenses then it would be doing well.

Unfortunately, it is being operated as a charity to benefit the Town government's general fund.

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Scott Wedel 3 years, 4 months ago

BTW, the Town has every right and reasons to support the Historical Society in the Old Town Hall. The issue is not that the Town is providing support to the Historical Society but in how it is being provided.

Instead of contributing a budgeted amount from the General Fund which is the normal way for government to support an organization, the Town government has instructed all of the utility enterprises including the electricity enterprise to not bill this customer regardless of the amount.

This method of supporting an organization via not billing for utility service appears to be unique to the Town of Oak Creek.

Likewise, the Town has chosen to support the Routt County Senior Housing by not billing for water and sewer for vacant apartments.

The answer to the question of why Oak Creek utilities are so expensive is answered by looking at how the enterprises are managed. The enterprises are not managed as businesses collecting revenues for services provided and controlling expenses, but are being operated as a source of revenues to supplement the general fund and as a catch basin to pay as many Town expenses as possible.

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Scott Wedel 3 years, 4 months ago

Also, I have been contacted by a person whom would like to move his business to Oak Creek. The best spot because it is small, unused and already has 3 phase power would be to close in one of the bays at the car wash.

The car wash is simply not a viable business in a Town that small with utility costs that high on a highway with that little traffic (according to CDOT, vehicle trips is comparable to that of Maybell) serviced by a Town dirt street that is currently several inches of muck.

One might think a Town in such desperate financial situation would welcome a new business. The more people working in Oak Creek means more people likely to eat lunch and support local restaurants and so on.

Reality is that the Town government has informed me that I have to wait until April 20th for a pre-application hearing. It could then be considered at the May 18th planning board meeting.

Of the local governments, it is only Oak Creek which has land use which requires every new business moving to Town to go through planning. All other local towns have zoning which allow certain uses in certain districts as an use by right. So the other governments in the area would all allow a business to move into a commercial area with a mere notification and the following of building codes.

It is Oak Creek which is unique and requires more than a two month process to allow a new business to move into the town.

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ftpheide 3 years, 4 months ago

If the car wash isn't a viable business in Oak Creek why did you purchase it? Did you forget to request a "profit and loss" from the Seller?

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Scott Wedel 3 years, 4 months ago

Ftp, I considered the price at the time for 5 commercial lots to be a good deal. Oh well. At least it was bought by selling a far more overpriced property.

At some point a local government has to be concerned about it's tax base. It is not enough to want lots of retail to move to town. At some point the long process of getting a new business approved matters. At some point, having local businesses with local employment is needed to have local consumers able to patronage local retail stores matters.

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ftpheide 3 years, 4 months ago

Oak Creek needs a car wash. It's to bad that the person that bought the existing one had no intention of continuing the car wash operation. The over priced property you sold to purchase the 5 lots in Oak Creek did it generate monthly income?

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Scott Wedel 3 years, 3 months ago

Ftp, Presumably, it is also too bad the gas station lacks an attendant. It is also too bad that Chelsea's closed. It is too bad that Oak Creek lacks a hardware store. It is too bad that it lacks a Mugshot. It is too bad that the beautiful Dovetail building sits largely unused.

I have offered any number of South Routt locals, including some with expertise in operating a car wash the opportunity to run the car wash and collect all revenues for zero rent, just to cover the utilities. Everyone has said it is not worth it. One did enough of an analysis to put out the obscenely high cost of water and sewer per expected car wash. To which I noted yes, there is even a water meter that records the minimal water usage when open, but the Town won't read it. That yes, I have pointed out the extremely high water and sewer bills despite the minimal water usage to the Town Board on several occasions and they just don't care. I even tried taking the Town to court where the Town's lawyer acknowledged the car wash uses little water, less water than the average residential customer, and is charged several times more than residential customers, but that the Town operated utility has the right to charge whatever customer whatever amount and the judge agreed.

So I have tried to get the car wash opened. I have tried to correct a major issue of operating the car wash, the excessively high water and sewer bills. The access to the car wash being a dirt road with substantial among of muck is also an issue.

Anyone that does not believe me is welcome to take me up on the offer and operate the car wash and pay the utility bills.

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ftpheide 3 years, 3 months ago

You had to know their was a dirt road leading to the car wash before you purchased it. The P&L would have shown you all the expenses involved in the operation of this car wash. Did you think draging the Town Board to court would scare them into lowering your overhead? It sounds like you made a bad investment and your taking every opportunity to "bad mouth" the town of Oak Creek. Your negative comments affect the economy of the town. Your harming yourself as a Oak Creek property owner!

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mtroach 3 years, 3 months ago

"Your negative comments affect the economy of the town. Your harming yourself as a Oak Creek property owner!"

I think that's the point. A slap in the face to wake up OC leadership into action.

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Scott Wedel 3 years, 3 months ago

Well, the concrete actions of the Town Board passing Ordinance 609 will be far more harmful to the economy of the town and property owners than any comments by anyone.

Just because the town government cannot effectively administer a deposit and disconnect policy for the electricity enterprise does not make it the responsibility of the property owners.

If they want to do it like water and sewer then there is no deposit or disconnects. Service is always available and billed to the property owner.

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