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CITY OF GLENDALE, CALIFORNIA
REPORT TO THE CITY COUNCIL
AGENDA ITEM
Report: Approval of participation in the California Water and Wastewater Arrearage Payment Program (CWWAPP) 2023 and Appropriation of Funds Received from the State Federal Grant Program.
1) Motion approving participation in the 2023 California Water and Wastewater Arrearage Payment Program and authorizing the City Manager, or his designee, to accept State funding via the California Water and Wastewater Arrearage Payment Program (CWWAPP) to provide utility bill credit for water and wastewater customers. 2) Resolution appropriating $593,656 received from the State for 2023 California Water and Wastewater Arrearage Payment Program and appropriating 3% administrative recovery cost in the amount of $17,810 for a total appropriation of $611,466.
COUNCIL ACTION
Item Type: Consent Calendar
Approved for April 30, 2024 calendar
EXECUTIVE SUMMARY
The COVID-19 pandemic made it difficult for many Californians to pay their bills due to job loss and other hardships. As a result, systems that provide water and wastewater services to customers have been financially impacted.
Through $985 million in federal funding allocated by the state legislature, the State Water Board created the California Water and Wastewater Arrearages Payment Program to provide relief to community water and wastewater systems for unpaid bills related to the pandemic. The original funding covered water debt from residential and commercial customers accrued between March 4, 2020 and June 15, 2021. The State Water Board disbursed over $385 million to water and wastewater systems for residential and commercial arrearages.
On July 10, 2023, Governor Newsom signed a budget trailer bill expanding the Arrearages Program to December 31, 2022, with the state legislature allocating the remaining $600 million in federal funding. The new Extended Arrearage Program will include both water and wastewater debt from residential and commercial customers both active and closed accounts, and a 3% administrative recovery cost for program 2{{section.number}}g
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administration. Utility customers do not need to apply individually to receive assistance, and there is no income qualification for either program. GWP will apply assistance directly to customers’ water and wastewater utility bills. Based on qualified water and wastewater arrearages between June 16, 2021, through December 31, 2022, as of December 12, 2023, GWP requested $611,466 in CWWAPP funding. By law, GWP will be required to disperse funds received based on customer priorities set by the State.
RECOMMENDATION
Approve a Motion to authorize the City Manager to accept state funding via the CWWAPP to provide utility bill credit for water and wastewater customers, and to adopt a Resolution of Appropriation in the amount of $611,466 for the Program.
ANALYSIS
Due to the COVID-19 pandemic, millions of Californians fell behind on payment of their electric, water, and wastewater utility bills. In Glendale, total pandemic-related customer arrears of more than 60 days for electric, water, and sewer accounts, as of June 15, 2021, were over $6.2 million and affected approximately 1,105 water, 6,128 electric and 5,852 sewer customers.
The State of California, using funds provided by the federal American Rescue Plan Act of 2021 ("ARPA"), created two programs offering direct financial assistance to electric and water utilities to address customer arrears accrued during the pandemic.
In 2021, the State appropriated $993.5 million to establish the California Arrearage Payment Program ("CAPP") for electric service and $985 million to create the California Water and Wastewater Arrearage Payment Program ("CWWAPP"). Through 2021 CAPP and the 2021 CWWAPP, the City of Glendale received funding for electric, water, and wastewater customers. Below is the breakdown of funds received from CAPP and CWWAPP Programs:
CAPP - Electric: Total number of customers who received CAPP benefits was 6,128 and only $4,995,041 of the CAPP funding was applied out of $5,199,473. The remaining balance of $204,432 was refunded back to the State per CAPP guidelines.
CWWAPP - Water: Total number of customers who received CWWAPP benefits was 1,105 and only $785,584 of the CWWAPP funding was applied out of $950,268. The remaining balance of $164,684 was refunded back to the State Water Resources Control Board per CWWAPP guidelines.
CWWAPP - Wastewater: Total number of customers who received CWWAPP benefits was 5,852 and only $473,892 of the CWWAPP funding was applied out of $517,270.
The remaining balance of $43,378 was refunded back to the State Water Resources Control Board per CWWAPP guidelines.
In 2022, the State appropriated an additional $1.2 billion in State General Fund dollars to support the adoption of 2022 CAPP to help address the ongoing financial impacts of COVID-19 pandemic on Californians. The California Department of Community 3{{section.number}}g
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Services and Development ("CSD") is again administering the CAPP program. This program was designed to provide utility financial assistance for active residential customer accounts with unpaid balances that are at least 60 days past due for services provided from March 4, 2020 to December 31, 2021. This relief period was extended from the previous 2021 CAPP to assist more customers due to delinquent balances originated from COVID-19 pandemic. Below is the breakdown of the funds received from the 2022 CAPP program:
CAPP 2.0– Electric: Total number of customers who received CAPP benefits was 2,987 and only $1,521,737 of the CAPP funding was applied out of $1,528,053. The remaining balance of $6,316 was refunded back to the State of California per CAPP guidelines.
On July 10, 2023, Governor Newsom signed a budget trailer bill expanding the Arrearages Program to December 31, 2022, with the state legislature allocating the remaining $600 million in federal funding for this Program. The new Extended Arrearage Program will include both water and wastewater debt from residential and commercial customers.
The assistance programs are directed toward utility customers who are unable to pay their bills due to the impacts of COVID-19. Customers who are able to pay some or all of their bills, whether current or past due, are encouraged to do so. Additionally, customers who are currently enrolled in payment plans with GWP are encouraged to continue making payments under the terms of the agreement. As part of the program participation requirements, GWP will not impose late fees or penalties on the arrearages within the new program period, and will not be disconnecting service on past due accounts for only qualifying residential and commercial customers while the 2023 CWWAPP program is being implemented.
GWP submitted its initial application of water and wastewater arrearages during this new relief period (June 16, 2021 to December 31, 2022). Based on qualified water and wastewater arrearages, as of November 15, 2023, GWP requested 2023 CWWAPP funding in the amount of $611,466. By law, GWP will be required to disperse funds received based on customer priorities set by the State. The State is expected begin disbursing funds during the first half of calendar year 2024. 2023 CWWAPP
Based on qualified water and wastewater arrearages as of June 16, 2021, GWP requested CWWAPP funding in the amount of $611,466. GWP will be required to disperse funds received based on customer priority set by the State, as described below, at the time GWP receives the funding:
1. Community water systems and wastewater treatment providers that accrued residential and commercial customer arrearages during the COVID-19 pandemic bill relief period are eligible for the Extended Arrearage Program. This includes community water and wastewater systems that transferred arrearage debt to a third-party such as a county under a Teeter Plan or a debt collection entity. 4{{section.number}}g
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2. Community water systems and wastewater treatment providers that accrued residential and commercial customer arrearages during the COVID-19 pandemic bill relief period and used a customer assistance program for that arrearage.
3. Waive customer late fees for any arrearages accrued during the COVID-19 pandemic bill relief period in their entirety.
Based on the above guidelines and our initial CWWAPP request, the following table summarizes the initial estimate of how CWWAPP benefits would be applied:
2023 CWWAPP
Customers*
Residential
No.
qualified
Residential
Customers
Commercial
No.
qualified
Commercial
Customers
Total
Requested
Water Customers
with arrearages
between 6/16/2021 -
12/31/2022
$ 286,769 426 $ 46,780 62 $ 333,549
Wastewater
customers with
arrearages between
6/16/2021 -
12/31/2022
$ 225,623 3,352 $ 34,484 192 $ 260,107
Total Arrearage for
active and closed
accounts:
$ 512,392 3,778 $ 81,264 254 $ 593,656
Administrative Cost (3% of subtotal): $ 17,810
Grand Total of Payment amount requested: $ 611,466 * The CWWAPP 2.0 program covers arrearages between June 16, 2021 - December 31, 2022, and the customers that qualify for this program are at risk of disconnection due to non-payment.
It must be noted that grant funds received will cover past due amounts that remain unpaid on customer accounts at the time GWP receives CWWAPP funding. Payments made by customers subsequent to GWP’s initial 2023 CWWAPP request will reduce the amount of assistance credit applied to individual customer accounts. As such, the final distribution of CWWAPP funds described above is expected to change as customer makes payments.
STAKEHOLDERS/OUTREACH
City utility customers will be notified via a letter. There will also be a line item on their utility bill, and more information will be available on the GWP website.
FISCAL IMPACT
The grant funds in the amount $611,466 will be applied as bill credits directly to customer accounts. As the amount was not included as a part of the FY 2023-24 approved budget, staff is requesting for an appropriation of $611,466 from Federal Grant Revenue. The appropriation request is outlined below:
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Requesting Appropriation
Amount From (Account
String) To (Account String) Funding Source
GL: 43113-5920-GWP-0020$286,769 GL: 31240-5920-
GWP-0020 PL: GWP01160BG
Water Works -
Federal Grants
GL: 43113-5250-PWD-0020$225,623 GL: 31240-5250-
PWD-0020 PL: GWP01160AG
Sewer Fund -
Federal Grants
GL: 43114-5920-GWP-0020$46,780 GL: 31240-5920-
GWP-0020 PL: GWP01160BG
Water Works -
Federal Grants
GL: 43114-5250-PWD-0020$34,484 GL: 31240-5250-
PWD-0020 PL: GWP01160AG
Sewer Fund -
Federal Grants
GL: 43113-5920-GWP-0020$17,810 GL: 31240-5920-
GWP-0020 PL: GWP01160BG
Water Works -
Federal Grants
ENVIRONMENTAL REVIEW
This item is exempt from the California Environmental Quality Act (CEQA). It is not a project as defined by CEQA and there is no reasonable likelihood that compliance with AB 361 will result in any significant impacts to the environment.
CAMPAIGN DISCLOSURE
Not Applicable.
ALTERNATIVES TO STAFF RECOMMENDATION
Alternative 1: Not to approve the proposed action will result in not accepting state funding to assist utility customers with delinquent bills.
Alternative 2: Consider any other alternative not proposed by staff.
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ADMINISTRATIVE ACTION
Submitted by:
Mark Young, General Manager - Glendale Water and Power
Prepared by:
Chisom Obegolu, Assistant General Manager - Water
Michelle Nall, Utility Business Systems Support Administrator Approved by:
Roubik R. Golanian, P.E., City Manager
EXHIBITS / ATTACHMENTS
None.