By Katelyn Sattler
A bill winding its way through the Ohio Statehouse would require public utilities (water, sewer, electricity, gas, and refuse) to shift the costs from landlords to municipalities.
Ohio House Bill 93, “Regards limits on recovery and lien imposition by municipalities,” was introduced on March 7. The bill’s sponsors, state representatives Mark Johnson (R-Chillicothe) and Riordan McClain (R-Upper Sandusky), have been contacted by constituents who have had their tenants’ unpaid utility bills attached to their property tax total, which is allowed in Ohio law.
This bill aims to correct this by removing the option to place a property tax lien due to services not contracted by the property owner. The property owner could only be held liable for the amount that, when unpaid, would result in a municipal utility services provider terminating that service. The sponsors want to make sure that tenants are held responsible for their delinquent payments.
Obetz City Administrator Rod Davisson, representing the Ohio Municipal League and the approximately 1,100 municipalities in Ohio, gave opponent testimony to the bill on June 13. Davisson empathized with the landlords and gave an example of a landlord in Obetz during COVID (when billing was stretched out to 120 days) that was left with a bill of $2,000. However, that landlord ultimately had to pay the bill because, “We (Obetz) run electricity, gas, and particularly water and sewer, on a thin margin. There’s no profit in it. We make just enough money to be able to pay to run the utility and then occasionally upgrade the system. There’s not a lot of leeway in there to take big losses as a municipality.”
Davisson said the way Obetz cured the problem was to create a double billing system.
“We bill the landlord and tenant at the same time so that landlords have the opportunity to see whether or not their tenants got behind on the utility payments,” said Davisson. “The landlords have contracts with the tenants that we don’t have and they can evict their tenants for non-payment of these types of utilities. Cities and villages really don’t have that kind of power. We just turn off the water and we don’t turn it back on until someone pays the amount of money that we need. Some of our landlords also take the approach that they just bill the utilities with the rent.”
Davisson believes HB 93 infringes on a municipality’s Home Rule authority.
“And also, the municipalities have pretty broad power when it comes to utilities under Article 18, Section Four|Acquisition of public utility; contract for service; condemnation (of the Ohio Constitution),” said Davisson.
State Representative Jennifer Gross (R-West Chester) asked Davisson how the bill interferes with existing service contracts between municipalities and landlords, introducing a degree of uncertainty and potential instability and municipalities might refuse to provide services.
Davisson said, “You generally don’t make laws that interfere with contracts. We understand from the constitution that there are 1,100 municipalities in the State of Ohio, and you probably have 1,100 different versions of how this goes. Because they have Home Rule, because they have the constitutional authority to create their own utilities, they’re really unregulated for the most part. And so they each have their own way of doing things. And some of them have contracts with the homeowners, some of them have contracts with the tenants. We all do it differently. And so when we try to pass the law that affects all 1,100 of them, it’s hard to predict which ones of those we will create an impairment of their contract with. Some it may not, some it may, but there are 1,100 choices out there to try to figure it out.”
HB 93 is still in the House State and Local Government Committee.
For information on HB 93, go to https://www.legislature.ohio.gov/legislation/135/hb93/status, or go to https://www.legislature.ohio.gov to sign up to track the bill.
To watch Davisson’s testimony, go to https://ohiochannel.org/video/ohio-house-state-and-local-government-committee-6-13-2023.