Michael Perlstein, Special Projects Manager
Water and Wastewater Customer
Assistance Policies
April 11, 2023
History
2012: “Every human being has the right to safe, clean, affordable, and accessible water.”
California Assembly Bill 685
2020: Commission approves policy stating that "...water is a human right, and [to] prioritize equitable policies accordingly...”
SFPUC Resolution 20-0149
COVID Declared Emergency 2020-2023
• Moratorium on shutoffs, liens, fines and fees; four extensions • Streamlined application process and increased income eligibility for Customer Assistance Program
July 1, 2023
• Residential moratorium on shutoffs, liens, fines and fees expires • Any changes to Water/Wastewater rates go into effect
2 Low-Income Customer Assistance
Over two years of research and analysis, including
• Cross-Agency working groups
• Consultant-supported analysis
• Customer rates survey
• Monitoring of COVID-era programs and policies
• Discount pilot programs
• Qualitative customer feedback
3 Overview of Water/Wastewater
Customer Assistance Policies
Expand low-income customer discounts
Eliminate residential late fees
Exempt low-income customers from shutoff
or liens (minimum 1 year trial)
$8,000,000 annually to support discounts
4 Area Median Income (AMI)
Designations
% of AMI 1 person household
annual income HUD Designation
0% - 15% $0 - $14,550 Acutely low-income
16% - 30% $14,551 - $29,100 Extremely low-
income
31% - 50% $29,101 - $48,500 Very low-income
51% - 80% $48,501 - $77,600 Low-income
5 Low-Income Customer Discounts
6 Very low-
income
31% - 50% AMI
Up to $48,500/ yr.
1pp household
0% - 200%
FPL
Up to $27,180/ yr.
1pp household
Low-Income Customer Discounts
7 Extremely
low-income
0% - 30% AMI
Up to $29,100/ yr.
1pp household
Very low-
income
31% - 50% AMI
Up to $48,500/ yr.
1pp household
0% - 200%
FPL
Up to $27,180/ yr.
1pp household
Low-Income Customer Discounts
8 40%
discount
Extremely
low-income
0% - 30% AMI
Up to $29,100/ yr.
1pp household
25%
discount
Very low-
income
31% - 50% AMI
Up to $48,500/ yr.
1pp household
25%
discount
0% - 200%
FPL
Up to $27,180/ yr.
1pp household
Shutoff and Lien Exemption Policy
1. <=50% of AMI and enrolled in the Customer Assistance Program • Exemption effective July 1, 2023
Shutoff and Lien Exemption Policy
1. <=50% of AMI and enrolled in the Customer Assistance Program • Exemption effective July 1, 2023
2. <=50% of AMI and NOT enrolled in the Customer Assistance Program
• SFPUC staff are developing processes to effectively administer this program, including the collection and protection of personally identifiable information, and engagement with customers to inform them of the exemption and verify eligibility
Shutoff and Lien Exemption Policy
1. <=50% of AMI and enrolled in the Customer Assistance Program • Exemption effective July 1, 2023
2. <=50% of AMI and NOT enrolled in the Customer Assistance Program
• SFPUC staff are developing processes to effectively administer this program, including the collection and protection of personally identifiable information, and engagement with customers to inform them of the exemption and verify eligibility
3. 51% - 80% AMI and experiencing extenuating circumstances • SFPUC staff are additionally developing extenuating circumstance criteria Policy will be a minimum one year trial, and exempt customers will be expected to maintain good faith engagement with SFPUC's Customer Services.
Policy Summary
Discount
Late
Payment
Charge
Exempt
Shutoff/Lien
Exempt
Extremely
low-income
0% - 30%
40%
Yes
Yes
Very low-
income
31% - 50%
25%
Yes
Yes
Low-income
51% - 80%
-
Yes
Yes, with
extenuating
circumstance
>80%
-
Yes
-
12 Next Steps
July 1
• New discount structure takes effect
• Late payment charges remain ‘off’ for single-family residential accounts • Customer Assistance Program customers exempt from shutoff/lien with engagement with SFPUC's Customer Services; SFPUC staff continue to develop processes and criteria for full policy implementation At minimum one year after full policy is implemented
• Return to Commission with recommendation to continue or modify exemption program
13 14
THANK YOU
AGENDA ITEM
Public Utilities Commission
City and County of San Francisco
DEPARTMENT Business Services AGENDA NO. 7
MEETING DATE April 11, 2023
APPROVAL:
COMMISSION
SECRETARY Donna Hood
Updates to Low -Income Customer Assistance Program D iscounts, Late Payment Charges, and Shutoff and Lien Policy for Single-Family Residential Customers: Regular Calendar Project Manager: Deidre Andrus, Michael Perlstein
Summary of
Proposed
Commission
Action:
Authorize the General Manager to (1) implement program changes to the San Francisco Public Utilities Commission’s (SFPUC) Water and Wastewater Customer Assistance Program (CAP ); (2) suspend the SFPUC’s late payment charge policy for single -family residential customers; and (3) implement an updated policy for shutoffs and liens for single-family residential customers , with delegated authority to the General Manager to determine the eligibility and engagement criteria for this policy.
Background: Alignment with Existing Policies
In July 2004, by Resolution No. 04- 0094, as part of a rates package, this Commission implemented the Customer Assistance Program (CAP), offering a 15 percent discount on sewer charges for qualifying low - income residential single -family customers. One of the goals in establishing the CAP was to better adhere to the San Francisco Charter, Article VIIIB, Section 8B.125(5), which requires that the Commission consider low -income customers and evaluate providing assistance to those customers when establishing rates, fees, and charges. In July 2005, by Resolution No. 05- 0045, the Commis
sion modified the CAP by
increasing the discount on sewer charges to 35 percent and adding a 15 percent discount on water charges for qualifying low -income residential single-family customers.
On May 26, 2020, by Resolution No. 20- 0099, the Commission authorized the Temporary Emergency Customer Assistance Program for COVID-19 Relief (E-CAP) for residential and commercial customers. E- CAP provided the same levels of discounts as the CAP (i.e., 15 percent discount on water charges, 35 percent discount on sewer charges), but was available to any single -family residential customer
with household
income below 200% of the Area Median Income who had experienced a loss of income due to COVID-19 or stay-at-home orders.
Approve Extension for Shutoff, Liens, and Fines Moratoria Commission Meeting Date: April 11, 2023
2 On August 25, 2020, by Resolution No. 20 -0185, this Commission extended the E-CAP through December 31, 2020. On December 8, 2020, by Resolution No. 20- 0238, this Commission extended the E -CAP through June 30, 2021. On April 27, 2021, by Resolution No. 21- 0063, this Commission extended the E-CAP through March 31, 2022.
On February 22, 2022, by Resolution 22- 0044, the Commission authorized the General Manager to modify the Customer Assistance Program in order to incorporate practices from E-CAP. As a result of that Resolution, the CAP currently offers qualifying customers a 25 percent discount on water and sewer charges.
On July 28, 2020, by Resolution No. 20- 0162, this Commission authorized the General Manager to temporarily suspend the rules governing (1) the discontinuation or shut -off of water service for City retail customers for non -payment of water and/or sewer bills and (2) imposition of late payment penalties or fees for delinquent water and/or sewer bills. On December 8, 2020, by Resolution No. 20- 0238, this Commission authorized extension of the Shutoffs, Liens, and Fines Moratorium through June 30, 2021. On April 27, 2021, by Resolution No. 21-0063, this Commission authorized extension of the Shutoffs, Liens, and Fines Moratorium through March 31, 2022. On February 22, 2022, by Resolution No. 22-0043, this Commission authorized extension of the Shutoffs, Liens, and Fines Moratorium through June 30, July 31, or August 31, 2022 based on customer account type . On September 13, 2022, by Resolution No. 22-0157, this Commission authorized extension of the Shutoffs, Liens, and Fines Moratorium through June 30, 2023.
New Policy Changes
Staff proposes new policies for the single-family residential water and wastewater accounts, including:
• Adjusting discount eligibility to reflect local economic realities by utilizing a percentage of Area Median Income to determine eligibility;
• Establishing two tiers of discounts based on household income , with a greater benefit for the lowest income households; • Eliminating late payment charges; and
• Exempting households with low incomes and/or experiencing extenuating circumstances from shutoff or lien due to
nonpayment, dependent on customer maintaining engagement with the SFPUC.
Area Median Income, calculated annually by the Federal Department of Housing and Urban Development for the San Francisco region, is reported Approve Extension for Shutoff, Liens, and Fines Moratoria Commission Meeting Date: April 11, 2023
3 for the City and County of San Francisco by the Mayor’s Office of Housing and Community Development (MOHCD). The SFPUC will utilize MOHCD’s reported AMI levels.
If approved, these changes will go into effect beginning July 1, 2023. The changes to CAP eligibility and discounts and the elimination of late payment charges for single-family residential customers shall be ongoing until and unless this Commission takes future action to further modify.
After the shutoff and lien exemption policy has been in full effect for no less than one year and SFPUC staff have had adequate time to conduct analysis of the policy’s impacts, SFPUC staff will promptly return to this Commission with a recommendation to continue or amend the policy. The policy shall be in effect until and unless, at that time, this Commission takes action to modify.
Description of Proposal
This proposal would implement the following changes to better support low-income single-family residential water and wastewater customers:
• Change the maximum income eligibility threshold for the Customer Assistance Program (CAP) discount to be 50% of the Area Median Income (AMI);
• Establish two tiers of discounts within CAP: a 40% discount for households with incomes equal to or below 30% of AMI, and a 25% discount
for households with incomes between 31% and
50% of AMI;
• Eliminate late payment charges (LPCs) for single -family residential customers;
• Establish a s policy that the SFPUC will not disconnect water service or place a property lien due to unpaid bills for households with incomes at or below 50% of Area Median Income who are enrolled in the Customer Assistance Program and maintain engagement with the SFPUC;
• Delegate authority to the General Manager to ( a) establish processes that protect personally identifiable information for customer data and ( b) engage customers to inform them of this policy and verify eligibility , for households not enrolled in the Customer Assistance Program whose income is at or below 50% of Area Median Income, which would exempt such households from shutoff or lien due to unpaid bills; and
• Delegate authority to the Gen eral Manager to determine and implement, in addition to the processes established above, criteria regarding extenuating circumstances which impact a customer’s ability to afford their bills or endanger a vulnerable resident if Approve Extension for Shutoff, Liens, and Fines Moratoria Commission Meeting Date: April 11, 2023
4 disconnected from service, which would exempt a household whose income is between 51% and 80% of Area Median Income from shutoff or lien due to unpaid bills. Criteria could include financial circumstances beyond the customer’s control such as unexpected medical expenses, residence of persons with
disabilities, or other factors.
The changes to the discount program will increase the number of households eligible for water and wastewater bill discounts . The change to a two -tiered structure will also provide increas ed assistance for the lowest income households, who need more help to afford standard water and wastewater bills. These modifications to the CAP, if authorized, will go into effect no later than July 1, 2023, and will remain effective until and unless this Commission takes future action to modify further.
Eliminating late payment charges will ensure that households with unpaid bills are making payments towards their cost of service, rather than additional fees unrelated to the services provided. The elimination of Late Payment Charges for single-family customers, if authorized, will go into effect July 1, 2023 and will remain effective until and unless this Commission takes future action to modify.
Protecting lo w-income customers from shutoff or lien will support the Commission’s direction to the General Manager “that water is a human right, and prioritize equitable policies accordingly” (Commission Resolution 20-0149) by ensuring that poverty does not cause a household to lose access to clean, reliable water service, and that the cost of water does not cause increased financial strain. This protection will encourage customers to engage with the SFPUC, enroll in supportive programs, and work towards a financially sustainable relationship moving forward.
The exemption of customers from shutoff or lien due to nonpayment , if authorized, will remain active at least until SFPUC staff return to this Commission with a recommendation to continue or amend the policy .
Staff will promptly return to this Commission following analysis of no less than one year’s operation of the policy, impacting customers with household incomes less than or equal to 50% of Area Median Income, and those with incomes between 51% and 80% of Area Median Income and which experience extenuating circumstances which impact a customer’s ability to afford their bills or en
danger a vulnerable resident if
disconnected from service.
To implement the shutoff and lien exemption policy, SFPUC staff will develop rules and processes to support customer outreach regarding the availability of the program and the verification of eligibility , and will develop systems to collect and protect personally identifiable information Approve Extension for Shutoff, Liens, and Fines Moratoria Commission Meeting Date: April 11, 2023
5 for customer data required to determine eligibility for shutoff and lien exemption.
The implementation of the shutoff and lien exemption policy for households earning 51- 80% AMI with exte nuating circumstances will follow the development of extenuating circumstances and eligibility criteria, so that SFPUC staff are able to effectively implement the policy.
Public Hearing Notice
In conformance with Charter Sections 4.104(a)(1) and 16.112, Notice of Public Hearing was posted on the SFPUC website and at the San Francisco Public Library on March 20, 2033, and the official City newspaper on March 22, 23, 24, 26, and 29, 2023.
Fiscal Impact: The General Manager has approved $8,000,000 annually to support discounted bills provided through the Customer Assistance Program (CAP), and the SFPUC will continue to explore additional funding sources from other SFPUC funding sources, nonprofits, foundations, and other federal and state utility rate relief.
The proposed modifications to the shutoff and lien exemption policy will likely result in revenue reductions for the Water and Wastewater enterprises. The SFPUC has modeled these reductions in the financial plan, and the program as modified will have minor impact upon SFPUC finances.
Results of
Inaction:
A delay or denial in approving this age nda item would mean that the SFPUC would continue to offer its existing discount program with no changes, and on July 1, 2023 would reinstate with no changes its rules for single-family residential accounts regarding late payment charges for outstanding bills and those regarding shutoffs and liens. This may result in bills continuing to be unaffordable for low -income households , additional penalties accrued for households unable to pay their standard bills, and loss of water service or property lien for low-income households who cannot afford water and wastewater rates.
Recommendation: SFPUC staff recommends that the Commission adopt the attached resolution.
PUBLIC UTILITIES COMMISSION
City and County of San Francisco
RESOLUTION NO.:
WHEREAS, On July 14, 2020, by Resolution No. 20- 0149, t he San Francisco Public Utilities Commission affirmed that access to water is a human right and directed the General Manager to prioritize equitable policies accordingly; and WHEREAS, Average combined water and wastewater bills for single-family households in San Franciso have increased 24% over the last five years, and are expected to continue to increase over the next three years to support infrastructure improvements for essential system functions; and
WHEREAS, A survey conducted in December 2022 found that 28% of SFPUC customers are not “always” able to pay their full water and wastewater bill, and that 24% of single -family residential customers make trade-offs with other essential costs; and WHEREAS, The Federal Poverty Level does not reflect cost of living in San Francisco nor accurately reflect incomes at which a household may struggle to afford essential cos ts, and Area Median Income is instead used by many San Francisco City and County departments to more accurately assess income-based eligibility; and
WHEREAS, The U.S. Department of Housing and Urban Development defines “low - income” as below or equal to 80% Area Median Income, and more specifically “low -income” as households with incomes between 51% and 80% of Area Median Income, “very low -income” as households with incomes between 31% and 50% of Area Median Income, “extremely low - income” as households with incomes between 16% and 30% of Area Median Income, and “acutely low-income” as households with incomes below 15% of Area Median Income; and WHEREAS, Late payment penalties have not been shown to incentivize on-time payment, but do create additional costs for customers who struggle to afford their bills; and WHEREAS, On July 28, 2020, by Resolution No. 20- 0162, this Commission recognized the essential nature of the San Francisco Public Utility Commission’s services even in the face of hardship by suspending the rules governing (1) the discontinuation or shut off of water service for City retail customers for non-payment of water and/or sewer bills, and (2) the imposition of late payment penalties or fees for delinquent water and/or sewer bills; and WHEREAS, By Resolution Nos . 20- 0238, 21-0063, 22-004, and 22- 0157, this Commission has continually recognized that in the interest of public health and safety, access to water and wastewater services should be maintained even in the face of financial hardship; and
WHEREAS, In conformance with Charter Section s 4.104(a)(1) and 16.112, Notice of Public Hearing was posted on the SFPUC website and at the San Francisco Public Library on March 20, 2033 and the official City newspaper on March 22, 23, 24, 26, and 29, 2023; now, therefore, be it
RESOLVED, That this Commission hereby approves the changes to the Customer Assistance Program providing bill discounts to single -family residential water and wastewater customers through a two-tiered income eligibility model; and be it FURTHER RESOLVED, That this Commission approves, for SFPUC’s Customer Assistance Program for single -family residential water and wastewater customers, a 40 percent discount for households with incomes equal to or below 30% of Area Median Income, and a 25 percent discount for households with incomes between 31% and 50% of Area Median Income; and be it
FURTHER RESOLVED, That the General Manager has approved $8,000,000 annually to support SFPUC’s discount programs; and be it
FURTHER RESOLVED, That the General Manager and his designee(s) shall explore and pursue additional funding from other SFPUC sources, as well as from nonprofits, foundations, and other federal and state utility rate relief; and be it
FURTHER RESOLVED, That this Commission hereby approves t he suspension of the application of late payment charges to single -family residential water and wastewater accounts which are past-due on their bills; and be it
FURTHER RESOLVED, That this Commission hereby approves a shutoff and lien policy which establishes that all accounts with household incomes at or below 50% of Area Median Income that are enrolled in the Customer Assistance Program and maintain engagement with the SFPUC are eligible to be exempted from disconnection or lien due to nonpayment; and be it FURTHER RESOLVED, That this Commission hereby delegates authority to the General Manager to: (a) establish processes that protect personally identifiable information for customer data and (b) engage customers to inform them of this policy and verify eligibility, for households not enrolled in the Customer Assistance Program whose income is at or below 50% of Area Median Income, which this Commission hereby exempts from shutoff or lien due to unpaid bills; and be it FURTHER RESOLVED, That this Commission hereby delegates authority to the General Manager to: (a) establish processes that protect person ally identifiable information for customer data; (b) identify additional extenuating circumstances that impact a customer’s ability to afford their bills or endanger a vulnerable resident if disconnected from service; and (c) engage customers to inform them of this policy and verify eligibility, for households whose income is between 51% and 80% of Area Median Income and which experienc e extenuating circumstances, which this Commission hereby exempts from shutoff or lien due to unpaid bills; and be it
FURTHER RESOLVED, That these water and wastewater shutoff and lien exemptions for (a) households with incomes at or below 50% of Area Median Income who are enrolled in the Customer Assistance Program ; (b) households with incomes at or below 50% of Area Median Income who are not enrolled in the Customer Assistance Program ; and (c) households whose income is between 51% and 80% of Area Median Income and which experience extenuating circumstances, will remain in effect until the General Manager or his designee(s) return to this Commission with recommendations to continue or amend this policy following analysis of no less than one year’s implementation of these shutoff and lien exemptions.
I hereby certify that the foregoing was adopted by the Public Utilities Commission at its meeting of April 11, 2023.
_______________________________________
Secretary, Public Utilities Commission