AGENDA MEMORANDUM

Meeting Date:           May 14, 2007

From: Bill Pfeilsticker, Finance Director                                                                                                                                          

Subject:                      Ordinance amending 22-181 providing for waivers of utility deposits for vacant non-residential accounts to real estate brokers/agents.

Staff Recommendation:

Staff recommends adoption of the ordinance amending 22-181 as presented.

Analysis:

Currently, Section 22-181 Code of Ordinances requires cash deposits, bonds, or bank letters of credit for all electric, gas, water and internet utility accounts. The amount of deposit for commercial, residential, and municipal accounts (non-residential accounts) is equal to two and one half (2 ½) times the estimated monthly average utility bill.  

When non-residential buildings are vacated, it is common that all utility services are terminated by the occupant, who may not be the owner of the building. For real estate agents to properly show the property to potential tenants and for the sake of safety and convenience in doing so, it is often necessary to clean and properly light the premises. In some instances, air conditioning is required to control humidity in the vacant building. Because the owner must pay utility bills even though there is no rent revenue, the requirement to pay large utility deposits creates an unreasonable hardship.

Because the vacant building is not being used for its intended purpose and there is no history of utility bills for the building while vacant, it is difficult to estimate the monthly utility costs to establish a deposit amount. Deposits can be several thousand dollars.

The proposed amendment to the ordinance waives the deposits required under Section 22-181(2) for only non-residential accounts on vacant property which is for sale or lease, provided that a licensed real estate agent/broker makes written application to the City and thereby agrees to be personally responsible for all monthly utility fees and charges until the account is transferred to a new owner/tenant.  The waiver shall not exceed six monthly utility billing cycles without an extension approved by the City.  If the agent/broker fails to make payment when due, no deposit waivers will be issued to that agent/broker in the future.

Options:

1.  Approve the Ordinance to amend Section 22-181 as presented; or,

2.  Such alternative action as the Commission may deem appropriate

Fiscal Impact:

There is no fiscal impact to the City if this Ordinance is adopted. All deposits are returned to the customer or applied to unpaid utility bills.

Submission Date and Time:    5/11/2007 1:48 PM____

Department: ______________________ Prepared by:  ______________________                      Attachments:         Yes____   No ______ Advertised:   ____Not Required ______ Dates:   __________________________                      Attorney Review :       Yes___  No ____ _________________________________            Revised 6/10/04

Reviewed by: Dept. Head ________ Finance  Dept. ______wp____________                                    Deputy C.M. ___________________                                          Submitted by: City Manager ___________________

Account No. _________________ Project No. ___________________ WF No. ______________________ Budget  ______________________ Available _____________________