1 STAFF REPORT
DAT
E: June 21, 2022
T
O: Justin Hess, City Manager
F
ROM: Dawn Roth Lindell, General Manager, Burbank Water and Power BY: Jeannine Edwards, Assistant General Manager, Sustainability, Marketing, and Strategy
S
UBJECT: Approval to Utilize $1.1 Million of Unused Public Benefits Funds for the Burbank Utility Service Subsidy (BUSS) Program, a new Income Qualified Residential Assistance Program for Utility Service Customers RE
COMMENDATION
Approve Burbank Water and Power to utilize $1.1M of unused public benefits funds for the Burbank Utility Service Subsidy (BUSS) Program, a new income -qualified residential assistance program for utility service customers (Attachment 1); and authorize the BWP General Manager or her designee to administer and implement the program.
BACKG
ROUND
On May 17, 2022, City Council approved a 6% increase in electric rates and a 9% increase in water rates for municipal service customers to ensure Burbank Water and Power (BWP) can make necessary infrastructure improvement s and meet sustainability mandates. To ensure these utility rate increases do not cause an undue burden on low- income households, BWP seeks to expand financial assistance programs to support more individuals and families by utilizing unspent public benefit funds.
I
n September of 2020, City Council approved the use of $2 million of public benefits funds to assist the Burbank community impacted by the COVID-19 Pandemic (Pandemic). At the time, unemployment spiked to unprecedented levels in Los Angeles County ; as high as 19% in May 2020. BWP responded with a job-loss program allowing anyone who lost a job to be eligible for bill payment assistance. By July 2021, BWP had made significant progress in assisting unemployed residents; however, some low-income residents were still struggling to manage their municipal services bills. At that time, $1.3 million of funds were repurposed for the new Low-Income Rate Assistance Program , which provided assistance based on expanded income eligibility.
I
n parallel to these effort s, BWP assisted the community by suspending late fees and disconnections for delinquent accounts, providing payment arrangements of up to 24 months, working with the Community Development Department in their small business
WATER AND
POWER
2 assistance program, and applying to the State of California, on behalf of our customers, for past due bill forgiveness based on customer debt incurred between March 4, 2020, to June 15, 2021. To date, $3, 265,700 has been provided to BWP customers , including approximately $900,000 from the p ublic benefits fund and $2.4 million from the State of California. In addition to this, BWP has applied for the second round of s tate funding to help customers pay past-due utility bills. This debt forgiveness will be for customer debt incurred between June 16, 2021 - December 31, 2021; if approved, this will provide another $2 million for our customers.
To date, BWP has ensured that $3 million in funds be used to help customers pay their past-due bills. The potential of an additional $2 million would bring the total to $5 million of direct customer support. With the additional assistance from the State and with unemployment rates coming down to 6%,1 staff recommends creating a new program to provide a monthly discount to customers at or below 60% of Burbank’s median income.
The traditional BWP low-income programs are targeted to ensure Burbank’s most vulnerable populations, who are least able to improve their financial circumstances , are protected from an undue financial burden. This includes households who have a disabled or senior household member and are at 50% or below the Los Angeles County median income level . The Lifeline Rate Assistance program provides a discount on electric service of approximately 40% (depending on usage) and exempts the customer from the 7% utility use tax. For households who have an individual utilizing life support equipment, the Life Support Rate exempts a customer from the 7% utility use tax. Both programs are outlined in the table below.
Table 1: Current BWP Rate Assistance Programs
BWP Program Benefit Income
Qualification
(family of 4)2
Other
Requirements
Funding Source
Lifeline Rate
Assistance
• ~40% discount on
electric service
• No 7% UUT
$59,100 62+ or disabled
household
member
Public Benefits
Fund
Life Support
Rate
• No 7% UUT None In-home use of
life-support
equipment
Public Benefits
Fund
These programs currently assist over 2,200 customers and are funded by the state- mandated public benefits fund
3, which is restricted for use to support electric low-income programs, cost-effective energy efficiency and conservation activities, public interest research and development, and development of renewable resources technology.
BWP electric rates have consistently been the lowest in the area. Burbank’s average monthly consumption for a single -family home in 2021 was 710 kWh. For this level of consumption, the average per-kWh rate after July 1
st will be $0.20/kWh, compared to
Glendale at $0.23/kWh, Pasadena at $0.24/kWh, and Los Angeles Department of Water
1 April 2022, California Employment Development Department 2 Set at 50% of the Los Angeles County median household income 3 Senate Bill No.1194,
https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=199920000SB1194 3 and Power (LADWP) at $0.26/kWh. All customers benefit from low utility rates, however, with recent economic impacts from the Pandemic and inflation rates 4 at over 8%, many households in Burbank find themselves struggling to make ends meet. This was especially evident when BWP launched the one-time low-income programs during the Pandemic. T he COVID -19 Job Loss Bill Credit Program supported over 6,000 households, and the Low -Income Rate Assistance Program provided support to over 2,000 customers (see table below).
Table 2: 2020 – 2022 BWP COVID-19 Assistance Programs
These one-time programs launched between November 2020 and January 2022 demonstrated that there is a large pool of customers struggling to make ends meet. BWP agrees with City Council and BWP Board guidance that there is a need to expand assistance and continue to provide support to the Burbank community, particularly considering the most recently approved water and electric rate increases.
DISCUSSION
BWP is proposing a new income qualified rate assistance program , the Burbank Utility Service Subsidy (BUSS), which would assist customers to offset the upcoming BWP rate increase. The average monthly BWP utility bill rate increase is about $14 per month for single-family customers and $8 per month for multi-family customers.
Income Qualification
The BUSS program would provide a 12% discount on electric services 5 to households at
or below 60% of Burbank’s median income level. The income qualification levels as shown on Table 3 are consistent with those of the Burbank Parks & Recreation’s Program Activity and Service Subsidy (PASS) program. A 12% electric services monthly discount is estimated to provide an $8 monthly discount for multi -family customers and a $1 4 monthly discount for single- family customers. This discount would save customers approximately $94 - $173 per year.
4 https://www.bls.gov/cpi/, 12-mont h percentage change, Consumer Price Index, selected categories, April 2022.
5 Public Benefits program funding is restricted to the electric portion of a utility bill for low-income programs and cannot be applied to water.
4 T
able 3: Income Qualification Levels for Assistance Programs E
stimated Participation
BWP does not track household income, however, using other demographic data staff estimates anywhere from 2,500 – 5,000 customers may apply for the discount . At the lowest participation levels, the cost of the program would be $292,873 and the program would be funded for just under four years. However, if we have high participation, up to 5,000 households, we would fund the program for just under two years. BWP expects participation to be anywhere within this range.
T
able 4: 2,500 BUSS Program Participation & $293K Annual Cost T
able 5: 5,000 BUSS Program Participation & $586K Annual Cost Customers may apply for this program in the BWP lobby starting July 1, 2022. To streamline the application process, a resident may show BWP that they recently qualified for the PASS program to immediately qualify for the BUSS pr ogram. BWP is also working closely with other community partners to streamline the application process.
FISCAL IMPACT
There is no f iscal i mpact to implement the B USS pr ogram. BWP i s r equesting the authorization to utilize the $1.1 million of pr eviously approved and unspent COVID -19 ratepayer assistance program funded by the state-mandated public benefits fund.
Household
Size
LIFELINE NEW!
BUSS Program
1 $41,400 $69,580
2 $47,300 $76,538
3 $53,200 $84,191
4 $59,100 $92,610
5 $63,850 $101,871
6 $68,600 $112,059
7 $73,300 $123,265
8 $78,050 $135,591
Average Increase In
BWP Utility Costs
Average
Electric Bill
12% discount Estimated
Participation
Annual Cost
of Subsidy
Multi Family 7.73$ 65.08$ 7.81$ 1,762 165,145$ Single Family 13.52$
120.24$
14.43$ 738 127,728$
2,500 $ 292,873 Total
Average Increase In
BWP Utility Costs
Average
Electric Bill
12% discount Estimated
Participation
Annual Cost
of Subsidy
Multi Family 7.73$ 65. 08$ 7.81$ 3,525 330,291$ Single Family 13.52$
120.24$
14.43$ 1,475 255,456$
5,000 $ 585,747 Total
5 CONCLUSION
Staff recommends that the City Council a pprove Burbank Water and Power to utilize $1.1M of unused public benefits fund for the new income-qualified residential assistance program, BUSS, for utility service customers and authorize the BWP General Manager or her designee to administer and implement the program.
ATTACHMENTS
Attachment 1 – Proposed Low Income Residential Assistance Program