Staff Report Item 8
To: Ava Community Energy Authority
From: Chris Davis, Customer Operations Manager
Subject: Seeking feedback on Draft Unclaimed Funds Policy Date: March 12, 2025
__________________________________________________________________ Summary
Staff is requesting feedback on the Draft Unclaimed Funds Policy. “Unclaimed funds” is a term used to describe money that an entity has attempted to pay, or refund to a customer, but the customer has not yet received, or claimed, typically unclaimed due to an uncashed check. Ava sends checks to customers to compensate for Net Energy Metering over-generation and occasionally to fix a billing issue that has been identified after the customer has closed their account.
The Draft Policy described in this Staff Report outlines the process Ava will undergo to notify customers that they are owed money from Ava, and the steps they may take to receive due payment.
Financial Impact
Unclaimed funds reside on Ava’s balance sheet as a liability. As of August 2024, Ava’s liability includes $2,218,1802 owed to 6,970 customers. Clearing these funds will reduce Ava’s liability.
Staff does not anticipate any additional fiscal impact to implementing this process. Any funds that expire and are no longer owed to the customer will return to Ava’s budget.
Analysis and Context
California’s Unclaimed Property Law requires financial institutions, insurance companies, corporations, businesses, and certain other entities to report and submit their customers’ property to the State Controller’s Office when there has been no activity for a period of time (generally three years).
The statutes of the Unclaimed Property Law provide a list of exemptions. Exemptions include (1) Any property in the official custody of a municipal utility district, and (2) Any property in the official custody of a local agency if such property may be transferred to the general fund of such agency under the provisions of Sections 50050-50053 of the Government Code. Ava falls under exemption 2 of the Code, so unclaimed funds may be removed from Ava’s liability and returned to the budget. The amount of funds expected to return to Ava’s budget is minimal compared to overall annual operating income and expenses.
To provide the best customer experience, staff will make additional attempts to contact the customer prior to the 36-month (3 year) deadline.
Current Process
Following a Net Energy Metering true-up, or a billing issue that results in a credit on a closed account, staff currently takes the following actions:
1. Ava issues a check to the mailing address on file, including a cover letter that indicates that the check will expire after 90 days and a method of contacting Ava to receive an updated check,
2. After 90 days, the checks expire and become void,
3. The customer may contact Ava to request a new check,
4. The customer must confirm their mailing address or provide an updated mailing address, after which,
5. Ava will send the customer a new check with a 90-day expiration date,
Proposed Process Updates
The Customer Operations team would like to continue the process as outlined above, and in addition; compile a list of all customers who have unclaimed funds to list them on our website and attempt to contact the customer via email.
At least annually, Ava will remove customers with unclaimed funds over 36 months and their associated funds from both the website and the liability section of the Ava balance sheet.
After 36 months (3 years)
The funds will become property of Ava and, per the statute referenced above, will be transferred back to Ava’s general funds.
Attachments
DRAFT Unclaimed Funds Policy
Power Point
Draft Unclaimed Funds Policy
Policy Number: TBD
Approval Date: TBD
Agenda Item: TBD
Approved by Resolution: TBD
Following a Net Energy Metering true-up, or a billing issue that results in a credit on a closed account, staff will take the following actions:
1. Ava issues a check to the mailing address on file, including a cover letter that indicates that the check will expire after 90 days and a method of contacting Ava to receive an updated check,
2. After 90 days, the checks expire and become void,
3. The customer may contact Ava to request a new check,
4. The customer must confirm their mailing address or provide an updated mailing address, after which,
5. Ava will send the customer a new check with a 90-day expiration date.
6. Ava will, at least annually, compile a list of all customers who have unclaimed funds, attempt to contact via email, and list them on our website,
7. Ava will remove customers with unclaimed funds over 36 months and their associated funds from both the website and the liability section of the Ava balance sheet.
After 36 months (3 years)
The funds will become property of Ava and, per the State statute, will be transferred back to Ava’s general funds.
Unclaimed Funds Policy
Chris Davis | March 12, 2025
Summary
Staff is requesting feedback on an Unclaimed Funds Policy Unclaimed funds is a term used to describe money that an entity has attempted to pay, or refund to a customer, but the customer has not yet received, or claimed, typically unclaimed due to an uncashed check. Examples: Net Energy Metering over-generation credits & billing issues for closed accounts
Ava sends checks to customers to compensate for Net Energy Metering over-generation and occasionally to fix a billing issue that has been identified after the customer has closed their account.
2 Financial Impact
Current Liability:
$2,218,180 owed to 6,970 customers (as of August 2024)
Impact:
• Reduction in Ava’s liability by clearing unclaimed funds • Minimal fiscal impact on operations as funds expire and return to Ava's budget 3 Legal Context
California’s Unclaimed Property Law:
• Requires entities to report unclaimed funds to the State Controller after 3 years of inactivity.
Exemptions:
(2) Any property in the official custody of a local agency if such property may be transferred to the general fund of such agency under the provisions of Sections 50050-50053 of the Government Code.
• Ava qualifies under exemption 2 (local agency property) to return funds to its budget after 36 months.
4 Current Process
Current Process:
Following a Net Energy Metering true-up, or a billing issue that results in a credit on a closed account, staff will take the following actions:
• Ava issues a check to the mailing address on file, including a cover letter that indicates that the check will expire after 90 days and a method of contacting Ava to receive an updated check.
• After 90 days, the checks are stale and void,
• The customer may contact Ava to request a new check,
▪ The customer must confirm their mailing address or provide an updated mailing address, and then
• Ava sends the customer a new check with a 90 day expiration date. 5 Proposed Process Updates
Continue the process as outlined on the previous slide, then:
• Ava will, at least annually, compile a list of all customers who have unclaimed funds and list them on our website.
• After the website is updated, Ava will also attempt to contact the customer via email.
After 36-Months:
• Funds are transferred back to Ava’s general fund.
• Funds are removed from Ava’s liability.
• The customer is removed from the list of unclaimed funds. 6 Benefits of Proposed Updates
Improved Transparency:
• Customers can easily find and claim unclaimed funds.
Streamlined Process:
• Reduced administrative burden for Ava with clearer guidelines for handling unclaimed funds.
Alignment with State Law:
• Customers may be familiar with the law; Ava’s policy follows the first 36-month requirements of California’s Unclaimed Property Law
7 Conclusion
Summary:
• Proposed updates to the Unclaimed Funds Policy will reduce liability and improve customer experience.
Next Steps:
• Requesting feedback from stakeholders to finalize the policy. 8