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RESOLUTION TO ACCEPT AND APPROPRIATE FUNDING FROM THE CALIFORNIA EXTENDED WATER AND WASTEWATER ARREARAGE PAYMENT PROGRAM, APPROVE THE ALLOCATION OF FUNDS AND APPROVE A WAIVER OF ELIGIBLE CUSTOMER LATE FEES
recommended action
RECOMMENDATION
It is recommended that the City Council adopt a resolution to:
1. Accept and appropriate funds from the California Extended Water and Wastewater Arrearage Payment Program in an amount up to $2,362,493.06.
2. Approve the allocation of funds in accordance with all Extended Water and Wastewater Arrearage Payment Program requirements.
3. Approve a waiver of customer late payment fees eligible under the Extended Water and Wastewater Arrearage Payment Program.
It is also recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of this resolution.
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Summary
On July 10, 2023, Governor Newsom signed a budget trailer bill to expand the Water and Wastewater Arrearages Program. The State Water Resources Control Board (State Board) has initiated the new California Extended Water and Wastewater Arrearage Payment Program (Extended Program). This Extended Program has revised the eligibility requirements to provide additional financial relief for residential and commercial water and wastewater customer accounts that experienced financial hardship due to the COVID-19 pandemic.
In December 2023, the City of Stockton Municipal Utilities Department (MUD) applied to receive additional funding from the Extended Program to credit eligible past-due water and wastewater utility bills. To qualify, the past-due water and wastewater utility bills must have accrued during the COVID-19 pandemic relief period established by the State Board between June 16, 2021, and December 31, 2022. Eligible residential and commercial customers do not need to apply for Extended Program funds. The funds will be applied as a credit to the water and wastewater utility bills of qualifying accounts.
Staff recommends the City Council adopt a resolution to authorize the acceptance, appropriation, and allocation of funding from the California Extended Water and Wastewater Arrearage Payment Program to credit eligible past-due water and wastewater utility bills in an amount up to $2,362,493.06 and approve a waiver of customer late payment fees eligible under this program.
DISCUSSION
Background
In July 2021, the Governor signed Assembly Bill 148, allocating $985 million in Federal ARPA funds to the Water and Wastewater Arrearage Payment Program administered by the State Board. The MUD applied for the Program to credit eligible past-due water and wastewater utility bills. A total of $2,253,527.34 and $1,623,889.31 was received and applied to 11,742 wastewater and 4,357 water customer accounts, respectively.
On July 10, 2023, Governor Newsom signed a budget trailer bill expanding the Arrearages Program. This new Extended Water and Wastewater Arrearage Payment Program expanded the COVID-19 Relief Period to December 31, 2022, with the State Legislature allocating the remaining $600 million in federal funding to this Extended Program. The Extended Program will provide community water and wastewater utilities the opportunity to apply for funds to credit past-due residential and commercial water and wastewater accounts.
Funds are intended to support Stockton residents and commercial businesses that experienced financial hardship due to the COVID-19 pandemic. The California Health and Safety Code defines “past-due bills” as customer water and wastewater utility bills unpaid for 60 days or more. The MUD has reviewed utility billing records to determine eligible accounts in accordance with the Extended Program guidelines. The Extended Program requires the City to allocate payments as bill credits to eligible customers to help address past-due bills accrued during the new funding period between June 16, 2021, and December 31, 2022.
Present Situation
In December 2023, the MUD and Administrative Services Department (ASD) applied for a total of $2,362,493.06 in Extended Program funding. This included 7,804 residential ($2,196,986.45) and 210 commercial ($96,696.13) accounts (including $68,810.48 in administrative costs) eligible to receive credit for past-due water and wastewater utility charges accrued during the bill relief period.
Upon approval by the City Council, the ASD will issue a credit to eligible accounts for past-due water and wastewater bills accrued between June 16, 2021, and December 31, 2022. If the water and wastewater bill has already been paid under the Rental Assistance Program, any duplication of credit will be mitigated when applying the credit manually. Credit will only be applied to match the remaining arrearage balance due to each account. Eligible residential and commercial accounts, including active and inactive accounts, and accounts that have payment plans or payment arrangements will be credited automatically. The City must remit any funds not credited to customers back to the State Water Board within six months of receiving payment.
In accordance with Extended Program guidelines, eligible customers will be mailed a Notice of Credit to Water and Wastewater Bill (Notice) that includes the following:
1. The amount credited to their water and/or wastewater utility account,
2. Information about the Extended Program funding sources,
3. Instructions to contact the City with questions, to set up a payment plan, or to appeal or contest utility bill charges, and
4. A notification that customers with remaining balances after credit has been applied have 30 days from the date of the Notice to enroll in a payment plan.
The Notice must include other available or future financial assistance programs to help pay utility bills accrued outside the Extended Program bill relief period.
Extended Program funds will cover all eligible water and wastewater bill debt accrued during the new pandemic relief period. Eligible residential and commercial customers do not need to apply for funding. Qualifying accounts will receive a credit applied to the utility bill. The Extended Program also requires the City to waive all late fees for qualifying water and wastewater arrearages.
It is recommended that the City Council adopt a resolution to authorize the acceptance, appropriation, and allocation of funding in an amount up to $2,362,493.06 from the California Extended Water and Wastewater Arrearage Payment Program and approve a waiver of customer late payment fees eligible under the program.
FINANCIAL SUMMARY
The City may expend up to three (3) percent ($68,810.48) for administrative costs incurred to apply or comply with program requirements. System costs to apply for funds and comply with program requirements must be documented and reported to the State Board.
The allocation of the California Extended Water and Wastewater Arrearage Payment Program funds in an amount up to $2,362,493.06 will be appropriated in the Water (0000-000-430101-600-603-00-65-000-000) and Wastewater (0000-000-430101-610-613-00-65-000-000) Utility Federal Grant account.
The estimated unpaid late payment fees and penalties eligible for the Extended Program is anticipated to be under $250,000 and can be sustained by the Water Fund and the Wastewater Fund.
There is no financial impact to the General Fund, or any other unrestricted funds, from this action.