1 STAFF REPORT
DATE
: January 31, 2023
TO: Ju
stin Hess, City Manager
FR
OM: Dawn Roth Lindell, General Manager, Burbank Water and Power VIA: Sean Aquino, Assistant General Manager, Customer Service Operations
BY: Arineh Sarkissian, Manager, Customer Service Operations SUBJECT: Approval to Re-Establish Power Disconnections and Late Fees for Residential Customers
RECOMMENDATION
Approve Burbank Water and P ower (BWP) to resume power shut offs and late fees for city utilities for residential customers effective A pril 3, 2023.
BACKGROUND
The COVID-1 9 pa ndemic (pandemic) had a significant impact on the local econom y.
Since the initial shelter-i n-place order was issued on M arch 19, 2020, the city has been proactively assisting customers during these unprecedented times, including:
• Suspending late fees and disconnections for delinquent accounts as of April 21, 2020.
• Distributing COVID-19 information about resources and services available from various federal, state, and local agencies.
• $1,219,821.73 of State funds were applied to 2,030 residential customers from the California Arrearage Payment Program (CAPP) for electric arrears for the period of March 4, 2020, to June 15, 2021.
• $ 287,949.72 of State funds were applied to 618 residential customers from the California Water and Wastewater Arrearage Payment Program (CWWAPP) for potable water arrears for the period of March 4, 2020, to June 15, 2021.
• $ 237,146.98 of State funds were applied to 1,376 residential customers from CWWAPP for sewer arrears for the period of March 4, 2020, to June 15, 2021.
• $637,838.06 of State funds were applied to 1,393 active residential customers from 2022 California Arrearage Payment Program (CAPP 2.0) for electric arrears for the period of March 4, 2020, to December 31, 2021.
WATER AND
POWER
Arineh Sarkissian
Sean Aquino
2 • BWP e stablished and implement ed a COVID -19 Job Loss Bill Credit Program (JLBCP), utilizing BWP public benefit funds . Approximately $725,000 was distributed to 3,096 residential customer utility bills. • BWP established and implemented the Burbank Utili ty Service Subsidy (BUSS) Program which provides approximately a 12% discount on the electric portion of the utility bill. This program has assisted 539 customers, totaling approximately $23,000 and is funded via BWP public benefit funds.
Of the customers who are receiving this assistance, 75 have outstanding balances over 61 days, which is 14% of BUSS customers.
• The Lifeline Program provides up to a 40% reduction in customer utility bills via public benefit funds for low -income customers and of t he 1,780 customers on the program, 71 customers have outstanding balances over 61 days, which is 4% of Lifeline customers.
• BWP established and implemented a Low-income Residential Assistance Program (LIRAP). A total of $140,140.59 was distributed to 2,043 customer utility bills, via BWP public benefit funds.
• BWP distributed $45,454.10 of Project Share funds to 7,981 residential customers. These funds were collected by BWP via donations from BWP customers.
• Providing payment arrangements and efficiency servic es to help customers manage costs.
• As of December 12, 2022, staff has established 251 payment arrangements for customers in arrears, reducing total arrears by $616,104.00.
The City of Burbank has assisted residential customers by applying over $3.3 million in financial credits since March 2020. Of the $3.3 million, $2,382,756.49 were from state funds and $934,822.69 from public benefit funds. In addition, electric and water rate increases were suspended in fiscal year (FY) 2020/21 in response to the pandemic. BWP has been monitoring the trends of delinquent accounts tracked in the accounts receivables.
As of December 26, 2022, the total amount past due by residential customers is just over $6 million and continues to grow. Prior to the suspension of disconnections for non- payment in April 2020, accounts that have arrears beyond 61 days would be eligible for disconnection. Currently, the 61-90 day arrears is $834,669 and the 91 plus days arrears is $4,295,910, totaling $5,130.579. 3,557 residential customers have arrears over 61 days. The following table provides the total residential arrears as of December 26, 2022:
Residential Arrears
31-60 61-90 91+ Total Arrears
Single-Family $509,442 $377,622 $1,917,596 $2,804,661 Multi-Family $511,618 $457,047 $2,378,314 $3,346,979 Total Residential $1,021,060 $834,669 $4,295,910 $6,151,640
3 This debt has exponentially increased compared to pre-p andemic figures of approximately $900,000 dollars for all commodities on BWP bills which includes electric, water, fiber, and public works services such as sewer and garbage. $650,000 of the $900,000 pre-pandemic debt total was specific to electric, water and fiber optic serv ice arrears. Currently, residential debt represents about 88% of total arrears at BWP, of which 30% are single-family residents and 70% are multi-family residents.
Total commercial arrears now totals $689,758. The following table provides the total commercial arrears as of December 26, 2022:
DISCUSSION
On October 27, 2020, Council authorized BWP to restart disconnections of medium, large, and extra-large commercial customers effective December 1, 2020. BWP act ively reached out to these customers to make payment arrangements and offer assistance. As a result, we saw a 74% reduction in arrears by approximately $2.4 million for this customer group, from a total past due of $3,252,486 in December 2020 down to $851, 365 in February 2021. When CAPP was announced by the State and funds were distributed to customers in March 2021 the program required a 90- day delay in restarting disconnections from the date customers received CAPP funding, which was until May 2022. Once the 90-day protection was lifted in May, BWP returned to normal operations for outstanding arrears for medium, large, and extra- large customers on July 6, 2022 .
Since resuming normal operations, arrears for these customer classes have dropped by an additional 57% from $767,035 in May 2022 to $328,534 in December 2022.
On August 23, 2022, Council authorized BWP to restart disconnections of small commercial customers effective September 1, 2022. BWP actively reached out to these customers to make payment arrangements and offer assistance. As a result, we have seen a significant reduction of 52% in arrears by approximately $386, 872 for this customer group from $748,146 in August 2022 to $361,244 in December 2022.
In late June 2022, BWP received notification that the legislature and Governor Newsom had approved a new round of funding for unpaid electric bills resulting from the pandemic for active residential customers, called 2022 CAPP. 2022 CAPP extends the pandemic relief period from June 16, 2021, through December 31, 2021. On October 25, 2022, BWP applied for the 2022 CAPP program. BWP received funding from the State for this program.
On December 28, 2022, BWP applied the state funding of $637,838.06 to 1,393 customer accounts. These customers will have a 90-day protection from being disconnected. Since the 90-day protection period ends on March 28, 2023, BWP is requesting authorization to resume disconnections for residential customers on April 3, 2023. Customers will begin Commercial Arrears
31-60 61-90 91+ Total Arrears
Small $130,295 $50,866 $180,063 $361,224
Medium/Large/X-Large $280,664 $11,745 $36,125 $328,534 Total Commercial $410,959 $62,611 $216,188 $689,758
4 to receive urgent notices in early March advising them of the potential disconnection of services if they do not make payment arrangements or submit payments before April 3, 2023.
BWP also reached out to neighboring publicly -owned utilities to learn how other community-owned utilities were addressing reducing residential arrears and their plans for resuming normal operations. The following table illustrates the ir status and future plans:
Neighboring Utility Targeted return to normal operations Anaheim Restarted commercial disconnections in June 2022 and will restart residential disconnections in March, 2023
Azusa Restarted all disconnections on November 3, 2020
Glendale Restarting both commercial and residential disconnections on January 9, 2023
Imperial Irrigation
District (IID)
Restarted residential disconnections in April, 2021
LADWP Restarting commercial disconnections in January 2023 Pasadena Planning to restart disconnections in April 2023.
Prior to restarting shutoffs for residential customers, staff will continue its outreach to establish payment arrangements and to offer any available federal, state, or BWP assistance via social media campaigns including direct emails, text messages and phone calls.
With the 90-day protection from 2022 CAPP expiring on March 28, 2023, w e anticipate returning to our normal process of disconnections for outstanding arrears over 61 days for residential customers by April 3, 2023.
Staff will continue to monitor opportunities to provide assistance and identify resources to help customers reduce their past due balances without interrupting their services. This will help collect arrears which will reduce the financial burden shared with other Burbank ratepayers.
ENVIRONMENTAL REVIEW
This activity has no potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, and as such, is not a “project” subject to the requirements of the California Environmental Quality Act (CEQA) 14 Cal. Code Regs § 15378.
FISCAL IMPACT
As of December 26, 2023, the total utility specific residential arrears is $4,394,716; $3,594,854 in electric arrears and $799,862 in water arrears. These totals are equivalent to a one- time 2% electric rate increase and a 2% water rate increase for all BWP customers. Re-establishing power disconnections for residential customers will r educe financial exposure to losses and cost-shifting to all customers through a rate increase.
4 to receive urgent notices in early March advising them of the potential disconnection of services if they do not make payment arrangements or submit payments before April 3, 2023.
BWP also reached out to neighboring publicly -owned utilities to learn how other community-owned utilities were addressing reducing residential arrears and their plans for resuming normal operations. The following table illustrates the ir status and future plans:
Neighboring Utility Targeted return to normal operations Anaheim Restarted commercial disconnections in June 2022 and will restart residential disconnections in March, 2023
Azusa Restarted all disconnections on November 3, 2020
Glendale Restarting both commercial and residential disconnections on January 9, 2023
Imperial Irrigation
District (IID)
Restarted residential disconnections in April, 2021
LADWP Restarting commercial disconnections in January 2023 Pasadena Planning to restart disconnections in April 2023.
Prior to restarting shutoffs for residential customers, staff will continue its outreach to establish payment arrangements and to offer any available federal, state, or BWP assistance via social media campaigns including direct emails, text messages and phone calls.
With the 90-day protection from 2022 CAPP expiring on March 28, 2023, w e anticipate returning to our normal process of disconnections for outstanding arrears over 61 days for residential customers by April 3, 2023.
Staff will continue to monitor opportunities to provide assistance and identify resources to help customers reduce their past due balances without interrupting their services. This will help collect arrears which will reduce the financial burden shared with other Burbank ratepayers.
ENVIRONMENTAL REVIEW
This activity has no potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, and as such, is not a “project” subject to the requirements of the California Environmental Quality Act (CEQA) 14 Cal. Code Regs § 15378.
FISCAL IMPACT
As of December 26, 2022, the total utility specific residential arrears is $4,394,716; $3,594,854 in electric arrears and $799,862 in water arrears. These totals are equivalent to a one- time 2% electric rate increase and a 2% water rate increase for all BWP customers. Re-establishing power disconnections for residential customers will r educe financial exposure to losses and cost-shifting to all customers through a rate increase.
5 CONCLUSION
Staff requests that the Council terminate the action suspending power shut-offs and late fees for city utili ties, and re- establish late fees and power shut -offs for residential customers effective April 3, 2023.
ATTACHMENT
None.