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Reductions Coming for Cascade's Utility Deposits

Posted By IAMU, Thursday, July 21, 2016

From the Cedar Rapids Gazette

Changes are on the horizon for utility deposit rates in the Eastern Iowa city of Cascade.

Amid complaints that Cascade Municipal Utilities’ deposit rates are double what the state legally allows, the utility plans to reduce local rates to the state level.

But CMU officials say they aren’t legally bound by the state rules.

Geoffrey Zoller, a landlord in Cascade, a community of a little fewer than 2,200 residents west of Dubuque, said he’s been battling for years with the utility over deposit rates.

Zoller’s argument, which he said he first made in 2001, is that CMU’s policy — new customers without an adequate credit history must pay a deposit equal to the two highest utility bills at that address over the previous year — is not only too high, it’s against state rules.

State code enforced by the Iowa Utilities Board says customer deposits cannot exceed a single month’s bill.

“It’s been illegal for 15 years, as far as I can tell,” Zoller said.

CMU Manager Ron Benke contended that Zoller’s complaint needed to be requested as an agenda item on a meeting of the Cascade Municipal Utilities Board — which oversees the utility — before discussion could take place.

“I’m not saying he didn’t make a complaint, but he never brought it to the board as an agenda item,” Benke said.

Benke said CMU has roughly 1,100 customers, about 100 of which are depositors.

Benke said Cascade’s board at its August meeting will discuss and vote on a resolution that would reduce deposit rates from the two highest months’ payments to the single highest month.

A second change would shorten the time frame for deposit refund eligibility from five years to 12 months, Benke said.

Benke said the utilities board will determine if changes to deposits will retroactively affect customers or result in reimbursements.

Zoller, who owns a handful of apartment units and eight rental houses, said current deposits make it difficult to find tenants. He said deposits for his properties are as much as $450 for a two-bedroom apartment and nearly $1,200 for a five-bedroom house.

“Nobody can afford that,” he said.

Zoller took his complaints to the Iowa Utilities Board earlier this year. In response, CMU officials agreed to voluntarily amend their service rules to reflect state regulations, according to a document sent from CMU officials to the state utilities board.

In the document, CMU officials contend the local utility isn’t bound by state rules, citing home rule authority, but will make the change anyway to benefit to the community.

Regardless of CMU’s actions, Don Tormey, Iowa Utilities Board communications manager, said Zoller’s informal complaint is being investigated by staff.

While gas and electric deposits are governed by the three-member state board, Cascade Mayor Marcus Behnken said water deposits are handled by the City Council.

The council just weeks ago agreed to reduce new water deposits from $120 to $70, Behnken said.

Behnken said the city wants to find “a happy medium” on deposits that still holds tenants responsible, but doesn’t keep them from renting.

“It’s rather hard for owners of those properties to get renters when there’s so much of a burden. It’s not in the best interest of the community, either,” he said.

Tags:  Cascade  Legal  Utility Deposits 

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