Newberry to refund $40,000 in commercial, residential utility deposits

 

NEWBERRY – In a move that Newberry City Manager Mike New says is, “By far the most aggressive business and customer friendly utility deposit requirement that I have observed,” the Newberry Commission unanimously voted to approve the return of more than $40,000 in utility deposits to Newberry residential and commercial utility customers.

Ordinance 04-15 was approved on June 22, making Newberry the only municipality in Alachua County to take a chance on both its residential and commercial utility customers by rewarding those with at least one year of perfect payment history a credit of their initial deposits in an upcoming billing cycle.

While several municipalities in Alachua County do offer waivers or refunds of residential deposits based on payment history and credit rating, all but Newberry now hold commercial utility deposits until a business closes an account.

Last year, Mike Layman, owner of The Gourmet Rodent in Newberry requested the city waive his utility deposit of more than $24,000 as he assumed ownership of the company from previous owners who already had a utilities account with Newberry. The city couldn’t transfer the account, so Layman was told he had to open a new one. The reptile breeding facility expanded over decades to more than 10,000 square feet and its utility bill had increased to an average of about $12,000 per month.

  Newberry’s policy for establishing a commercial account requires that a deposit of double the average monthly utility bill be held in a non-interest bearing account. Now, if Layman’s company has paid on time for twelve consecutive months, his initial deposit will be applied to his utility account during the hottest months of  summer when most utility bills are at their peak due to non-stop air conditioning.

“Our City Commission is very committed to developing the right economic climate in Newberry,” New said. “Industry experts would advise our City to go the other direction with utility deposits. Our City Commission understands the risks associated with this policy and decided this calculated risk was worthwhile. It is impressive legislation.”

New, who served as utilities director for the city of Alachua was hired as city manager of Newberry last year. He said he has worked in the utility business for more than 28 years. He spent 17 years with Gainesville Regional Utilities, 10 years with the City of Alachua and 1 year in Newberry.

Local businesses are glad to hear the news.

Chris Mack, owner of Pawn Pro located at 25040 W. Newberry Rd. cools and lights up 9,000 square feet of retail space each month, and his utility bill ranges from $900 to $1,300 a month.

“That’s awesome,” he said about the commission’s decision. “It’s a great idea. If I get it (the deposit) in the summertime, it’s a huge deal. It’s one of my biggest bills of the year, I certainly won’t argue with it.”

Mack, who moved his store three years ago from Alachua to Newberry, said he is impressed with the new ordinance.

He said when businesses are just starting out, it’s hard to come up with a large commercial utility deposit when you’re not open and generating revenue.

“Everything helps,” he said about the upcoming refund that the city expects to be credited to commercial and residential accounts in the next billing cycle.

Commissioner Jason McGehee owns a business in Newberry and said he and the commission know they are taking a risk, but they think the 1,800 residential utility customers and 200 commercial utility account holders will appreciate getting the money back, and it will, in turn, help the community.

“We said we were going to try to be more pro-business,” McGehee said. “The money was sitting in an account and, we know we are taking a risk by doing so, [refunding deposits], but I think it’s a calculated risk.

“We looked at the number of write offs we’ve had, and we thought it was in the best interest of our businesses and residents to give them their money back.

“If you’ve proven you can pay your bill for a year on time, then you deserve your money back.”

McGehee said the accounts will be monitored and they city can revert back if a customer starts missing payments.

The ordinance gives discretion to the city’s billing department to collect a deposit if a customer defaults on payments in the future.

There’s a lot of ordinances we have that we are slowly chipping away at and cleaning up,” he added.

“The next one we have, will be the sign ordinance.”

 Mayor Bill Conrad said the commission looked closely at default accounts before making a decision.

“Our write offs for utility deposits have been less than one percent,” Conrad said.

“We felt like we could return some of the money to the customers as a show of appreciation.”

“We can’t do anything with that money, so we’re going to go ahead and get that back to them.”