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APPROVE A WAIVER OF CUSTOMER CREDITS UNDER THE STATE WATER RESOURCES CONTROL BOARD WATER AND WASTEWATER ARREARAGE PAYMENT PROGRAM
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RECOMMENDATION
It is recommended that the City Council adopt a resolution approving a waiver of customer credits applied under the State Water Resource Control Board Water and Wastewater Arrearage Payment Program.
It is also recommended that the City Council authorize the City Manager to take appropriate and necessary actions to carry out the purpose and intent of this resolution.
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Summary
The City of Stockton participated in the State Water Resources Control Board Water and Wastewater Arrearage Payment Program (Program) that provided financial relief to water and wastewater customers experiencing financial hardship due to the COVID-19 pandemic. Funds received from the State were applied to customers’ past-due amounts using the Program criteria. Changes to the Program administration made by the State impacted customers previously found eligible for the Program. As a result, the City was required to return funds received for those customers who had paid part or all of their past due amount between the time the accounts in arrears were reported to the Program and when the City received funds. A total of $56,277.72 was returned for water customers and $221,471.86 for wastewater customers. There was sufficient revenue in each utility to cover the cost of repayment to the State.
If approved by the Council, this action will waive customers' responsibility in the City’s water and wastewater service areas to repay the amount credited to their account before the Program administrator clarified the eligibility criteria for applying the Program funds.
DISCUSSION
Background
The California State Water Resources Control Board (State Board) administered the California Water and Wastewater Arrearage Payment Program (Program). The Program offered funds from the Federal American Rescue Plan Act (ARPA) to provide financial relief for water and wastewater customers experiencing financial hardship due to the COVID-19 pandemic. To qualify, the past-due utility bills must have accrued during the COVID-19 pandemic relief period established by the State Board and between March 4, 2020, and June 15, 2021. Program funds received from the State were applied as a credit to the water or wastewater utility bill of eligible accounts.
The City of Stockton Municipal Utilities Department (MUD) applied for the Program to credit eligible past-due water and wastewater utility bills. A total of $2,253,527.34 was received and applied to over 11,700 wastewater customer accounts. Likewise, the City received $1,623,889.31 and applied credits to 4,400 water customer accounts.
Present Situation
The Program instructions required a credit be applied to any water or wastewater account that qualified under the Program criteria and had accrued past due amounts during the eligibility period of March 4, 2020 through June 15, 2021. The Program administrator did not account for eligible customers making either full or partial payments between the time the accounts in arrears were reported to the Program and when funds were paid to the City. The Program administrator determined that customers who had accrued a past-due amount during the eligibility period could not receive Program funds if they had already made payment to reduce their past-due amount. This direction from the Program administrator came after Program funds had already been applied to customer accounts. The City was required to report the number of accounts that had reduced or eliminated their past-due bill and refund the total amount to the State.
Staff recommends the City Council approve waiving the responsibility of customers in the City water and wastewater service areas to repay the amount credited to their account before the Program administrator clarified their eligibility criteria.
FINANCIAL SUMMARY
The City returned funds to the State in the amount of $56,277.72 for water and $221,471.86 for wastewater. There is sufficient revenue in each utility in “Other Revenue” to cover the cost of repayment to the State. Both the Water and Wastewater rate studies identify Other Revenue separately from Rate Revenue and include sources such as interest income, penalty fees, and violations. As this income source is separate from Rate Revenue, the ratepayers are not funding the repayment to the State.
This action has no impact on the General Fund or any other unrestricted fund.