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Item 05 Page 2 of 3 The Mounds View Vision A Thriving Desirable Community utility bills are due in mid-November. Rental license renewals are due November 30th. These dates create a short window between the date that 3rd quarter utility bills are issued, and the rental license deadline of November 30th. If an applicant submits early (e.g. October), the license cannot be approved until the 3rd quarter utility bill is paid in November. If a utility bill is delinquent, the City has the ability to certify it to the owner’s property taxes 2. In 2018, 25 of the 36 applicants (69%) whose license renewals were late, were due to unpaid utility bills. Question 2: If the City has assurance that delinquent utility bills will be paid through property tax assessments, is it necessary to require payment prior to issuing a rental license? Answer 2: (to be determined). The research thus far has not presented a pattern. There’s a least one city who requires utility bills to be paid prior to issuing any type of license or permit. Issue 3 Annual rental licenses renewals are due November 30th, and expire on December 31st. If unlicensed, beginning January 1st, the license fee is doubled.3 Additional penalties add $150 on February 1st, $300 on March 1st, and $450 on April 1st (compounded). Example: the license fee for one-unit is $100. If unpaid, the fee becomes $1,100 after April 1st. If our largest complex went through this (Scotland Green), their fees would go from $10,725 to $22,350 after April 1st. Question 3: Are the late penalties fair? This is a philosophical question of how high of a penalty is enough to deter owners from paying late. Answer 3: (to be determined). The research thus far has not presented a pattern. If a 10% late fee for utility bills resulted in 12% delinquency (2019), and a 100% late fee for rental licenses resulted in 16% delinquency (2019), then the __% late fee is not an effective deterrent. There are other causes & effects in our program that need to be explored. Strategic Plan Strategy/Goal: Operate under a balanced budget that meets the needs and goals of the community without the reliance upon the levy reduction fund and any LGA funds. Financial Impact: Undetermined. The intent of rental license fees is to reimburse the City’s cost of administering the rental program ($72,000 est). The City collected about $48,000 in 2019 4 and about $56,000 in 2018. Recommendation: Once Staff completes its research, a recommendation will be provided if any Ordinance amendments are necessary. Staff is also looking at how the Crime Free Multi-Family Housing 2 In 2018 and in 2019, 12% of utility bills were paid late. 3 For comparison, Mounds View charges a 10% late fee for unpaid public utility bills. A double fee is charged for construction started prior to a permit being issued (building, zoning, or public works related). 4 2019 License fees (rental license & rental conversion) were for 5 quarters ($60,701) due to changing the due date from September 30 to December 31. For simplicity, the text in this report took $60,701 divided by 15 months, or $48,560 for one year (2019).