In December 2019, prior to the COVID-19 pandemic, there were 692 customers enrolled in our assistance program. As of December 2022, we have 3,005 customers enrolled. Within three years, 2,313 new customers have enrolled in the program. To put this into perspective, from the start of our utility assistance programs in 2007, the largest number of customers enrolled over the life of the program was 516 customers in December 2018.
The program is funded by revenues collected for miscellaneous delinquent fees and penalties which are designated for the utility assistance program and water utility-related rebate programs. Projected revenues for miscellaneous delinquent fees and penalties for fiscal year 2023 are $2,600,000. Over the last three fiscal years expenditures for the program have been approximately $736,000 per fiscal year. This leaves about $1,864,000 in available funds for the utility assistance and water utility-related rebate programs each fiscal year, allowing significant room for growth.
DISCUSSION:
With the average City of Modesto utility bill being $163 per month, our current discount of $35 helps to reduce the monthly bill to $128.
As of December 2022, we have 3,005 customers enrolled in the program. We estimate this number could grow to 3,529 customers enrolled by the end of fiscal year 2023 at an annual cost of $1,482,180. This leaves approximately $1,127,820 of available funding for the program in this fiscal year, with room for growth in the number of enrolled customers and in the amount of the monthly discount.
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Economic Development Committee, May 1, 2023
Utility Billing Assistance Program Funding Update
Program Costs & Funding Fiscal Year 23
Estimated Customer Enrollment 3,529
Monthly Discount Amount $ 35
Monthly Cost $ 123,515
Annual Cost $ 1,482,180
FY Funding Available $ 2,600,000
As the cost of utility services continues to rise, an increase to the monthly discount amount from $35 per month to $45 will provide more assistance to qualified low-income customers. A discount of $45 per month is substantial enough to incentivize more customers to apply who need help. The table below provides additional detail on how an increase in enrollment and the monthly discount is sustainable with current available funding. As utility costs continue to rise, the Finance Department will continue to evaluate the discount amount to determine if available funding allows for future increases.
Program Costs & Funding Fiscal Year 2024
Estimated Customer Enrollment 4,235
Monthly Discount Amount $ 45
Monthly Cost $ 190,575
Annual Cost $ 2,286,900
FY Funding Available $ 2,600,000
FISCAL IMPACT:
The annual estimated cost for the Utility Billing Assistance Program for fiscal year 2023 is $1,482,180 with remaining available funding of $1,117,820. The annual estimated cost for fiscal year 2024 with an increase in the customers enrolled and in the monthly discount amount from $35 per month to $45 per month is $2,286,900 with remaining available funding of $313,100.
This item is funded by the Water Fund, through revenues collected from miscellaneous delinquent fees and penalties. Revenue from rates paid by customers is not used to pay for this program.
Program Costs & Funding Fiscal Year 2024
Estimated Customer Enrollment 4,235
Monthly Discount Amount $ 45
Monthly Cost $ 190,575
Annual Cost $ 2,286,900
FY Funding Available $ 2,600,000
RECOMMENDED COMMITTEE ACTION:
Staff Recommendations:
Motion approving an update on available funding for the Utility Billing Assistance Program (UBAP) with an increase to the monthly discount amount and forwarding to Council for approval. #9..
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Economic Development Committee, May 1, 2023
Utility Billing Assistance Program Funding Update
Approved by:
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DeAnna Christensen, Director of Finance
Joseph P. Lopez, City Manager
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