Item #07
Date: January 4, 2022
To: Mayor and City Council
From: Jennifer Styczynski, Finance Director
Jim Schaad, City Manager
Subject: Sewer Customer One-Time Delinquent Payment Policy Recommendation:
Pass a motion to adopt Resolution 2022-XX providing a one-time policy to manage delinquent sewer billing amounts directed at tenant-occupied properties that have not been paying ongoing sewer bills.
Background:
Over the past year, staff has increased its efforts to understand payment trends from the City’s sewer enterprise customers. Staff has utilized Dan Bergmann of IGS, working closely with the City’s billing agent, Utility Management Services (UMS). In formulating a solution to improve payment from customers, Mr. Bergmann also collaborated with the City Attorney and staff.
The IGS report, “Customer Payment Improvement Plan, November 2021” was provided at the December 7, 2021, City Council meeting. Ordinance No. 1438 was introduced on December 7 th
,
and is proposed to be approved January 4, 2022, to be effective in February. The Ordinance provides for better payment collection from tenant-occupied properties beginning in February.
However, $102,100 in delinquent amounts must also be managed going back up to five years.
Discussion & Analysis:
The attached two-page list shows 107 tenant-occupied, single-family residents that have not been paying ongoing sewer bills. Names and addresses are not shown to protect privacy; however, the detail is shown for each customer adding up to the projected January 2022 amount of $102,100. As shown in the list, a dozen customers have not paid their sewer bills for three years or more, and many have not paid for more than a year. Some commercial and multi-family customers also have delinquent amounts, but those total amounts due from tenants are less than five percent of the single-family amounts due. Commercial and multifamily, tenant-occupied sewer customers will be treated the same as single-family residences.
Calculations for the purpose of this report have been done only for single-family.
Item #07
Owners will be asked to pay up to the past seven months only, and they must pay ongoing monthly sewer bills pursuant to Ordinance No. 1438. The single-family billing amount for seven months is $363.51. If owners agree to pay this amount they will be forgiven further past due amounts. If owners do not agree, the amount due will be moved to assessment and lien through the Yuba County Tax Collector.
The projected amount to be collected from single-family owners for past due amounts for seven months is $38,900.
Fortunately, the California Water Board “Arrearage” program that has been applicable to water systems is being extended to be applicable to wastewater systems. This program is applied for by the service provider as opposed to the customer, such that the City of Marysville will apply for a total amount needed. The program will cover wastewater customer debt accrued between March 4, 2020, and June 15, 2021, a period of 16 billing cycles. For the single-family group in Marysville, the amount eligible is projected at $44,600, as calculated in the list. The extended program will apply to residential and commercial customers, though the much smaller amount for this group has not been calculated. Staff will follow the Arrearage program closely to bring full benefit to the City’s wastewater enterprise fund.
Provided City Council approves the attached Resolution, letters will be sent to all tenants and owners with delinquent balances introducing Ordinance No. 1438 and stating the City’s onetime policy regarding the delinquent amounts. The letters will be specific to each account showing the total amount due back to June 15, 2021, the amount to be applied for in the Arrearage program, the amount to be forgiven, if applicable, provided the owner makes payments going forward.
Fiscal Analysis:
The expected outcome is summarized in the table below.
Projected Collections for Single-Family Customers
Collections for past seven months from Owners $38,900 38% Potential benefit from the Arrearage Program $44,600 44% Not recovered $18,600 18%
Total $102,100 100%
It should be noted that if owners do not agree to pay the past seven months, an amount likely larger will go to assessment and lien. Further, it is uncertain at the time of this report how much will be collected through the Arrearage program.
Attachments:
1. Resolution No. 2022-XX
2. Anonymous list of tenant-occupied, single-family delinquent customers