Affordable housing advocates push Johnson County cities to forgive utility bills to ease residents' COVID-19 financial pressures

Three area organizations are calling for Iowa City and the other municipalities to forgive utility bills for households feeling the greatest financial pressures of the economy's downturn amid the pandemic.

On Tuesday evening, Johnson County was on Day 45 of its response to the coronavirus outbreak. While officials at the county's Emergency Management Agency say their efforts to support local hospitals are going well, there are many residents who, after a month and a half of layoffs, furloughs and low customer counts, are experiencing financial pressure.

Unemployment claims climbed in the week ending in April 11. Residents in Iowa made an additional 46,356 new claims for a four-week total of 207,468. As loan payments become due, rent checks need writing and pantry stocks run low, households only experience greater strain.

The Johnson County Affordable Housing Coalition, the Center for Worker Justice of Eastern Iowa and the Iowa City Federation of Labor penned a letter calling for Iowa City, Coralville and North Liberty to forgive water, sewer and refuse bills for households where one or more adults are unemployed.

► More:The latest on the coronavirus outbreak in Iowa

► More:Before economic shutdown, Iowa's unemployment rate had begun to increase, new report shows

Iowa City has already put the kibosh on late fees for utilities, and it's no longer cutting off service over a lack of payment. Still, there will come a day when that utility bill will be due.

The groups' letter argues that, while cities cannot mandate rent relief or rent control, they can reduce total housing costs by forgiving utility bills, which, as they note, is often the single largest expense for households. The hope is that, by absorbing this cost, the city adds flexibility to households to spend limited income on other goods and services. In addition, it would provide aid to community members lacking documentation for other programs like unemployment benefits or rental assistance.

Given the latitude Iowa City has shown in the fees and enforcement of utility bills, Affordable Housing Coalition's Sara Barron argued this was a bill the city clearly had control over. While she said the Coalition would like to see a dramatic increase in tenant-based rental assistance, the proposal was a short-term means of lowering the financial pressure on households immediately.

"Forgiving a utility bill is a really straightforward way to offer help to families that doesn't involve a long application process," Barron said. "It's something that can be a direct contribution from city governments."

Iowa City Manager Geoff Fruin said that, while the short-term impact of utility assistance is compelling, he said the city is experiencing significant changes to its revenue streams, too — changes that, without careful attention, could cause problems in the long run.

While the city is currently not experiencing large drops in revenue, Fruin said that it tends to lag. For example, the city gets the proceeds from motor fuel and hotel/motel tax; while that revenue is expected to decline sharply, he said that contraction hasn't hit the city yet. Property taxes, the largest source of revenue for the city, could take 18 to 36 months before the city begins to feel the impacts of greater vacancy rates and any changes in property values.

"We don’t know even in the short term what the full financial impacts of COVID-19 will be. We need to protect reserves to maintain our key services and operations," Fruin said. "If this situation continues for several months, our reserves may be depleted significantly."

Seventy-four percent of Iowa City's expenses, he said, are personnel. Cutting that budget is difficult without cutting staff and, subsequently, services.

Fruin said city staff are preparing an analysis of how the city could approach getting relief to households. Both he and Barron told the Press-Citizen that there are many devices that could be used to provide this relief.

"A utility relief program may be one way, but there could be other ways for the city to do that, as well," Fruin said. "The work we have to do is explain why one program may have advantages over another."

"Now is not the time for business as usual," Barron said. "I think everyone understands that. As we have discussions around how the city responds, it's our responsibility to center the economically vulnerable households in those discussions. ... We believe the city wants to offer assistance to households, and we want to partner with them to offer that."

Votes from Iowa City Council

Prairie restoration acceleration – Council approved a $244,019 contract with Applied Ecological Services, Inc. to restore 86 acres of prairie on 18 city-owned sites.

Year delay on new radon requirements – Council approved a one-year delay on new radon testing and mitigation requirements for single-family and duplex units passed earlier this year.

Transit funding application – Council approved an application from the Metropolitan Planning Organization of Johnson County for nearly $25 million in state and federal transit project funding.

2020 water pavement patching – Council approved the $150,000 cost and project manual to patch the years approximately 60 water main breaks.

Lower Muscatine Area Storm Sewer Project – Council approved the $1.2 million cost and project manual to install storm sewers on Deforest and Ginter avenues and reconstruct street pavement on Deforest Avenue from Sycamore to Franklin streets.

Sale of 1232 Sandusky Drive – Council approved the sale of 1232 Sandusky Drive for $115,000 to an income-eligible household.

2020's general obligation bonds – Council approved the advertisement for sale of $12.1 million in general obligation bonds. The sale date for these bonds will be May 5.

Harrison Street Parking Garage – Council approved putting $2 million more toward Capital One for the purchase of the Harrison Street Parking Garage. The city currently lacks $9.4 million on its purchasing agreement dated April 2017. In addition, council approved city staff to negotiate the term of the contract for payment in full before the due date should it save the city in interest payments and Capital One agree.

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Zachary Oren Smith writes about government, growth and development for the Press-Citizen. Reach him at zsmith@press-citizen.com or 319 -339-7354, and follow him on Twitter via @zacharyos.