City of Sacramento
City Council - 2PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2023-01638 1/16/2024 Consent Item 2.
Application for the State Water Resources Control Board: California Extended Water and Wastewater Arrearage Payment Program
File ID: 2023-01638
Location: Citywide
Recommendation: Adopt a Resolution authorizing the City Manager or City Manager’s designee to:
1) submit an application to the State Water Resources Control Board for the California Extended Water and Wastewater Arrearage Payment Program (Extended Arrearage Program) for the City’s drinking water arrearage customers; 2) accept funds from the Extended Arrearage Program in an amount not-to-exceed $3,429,376 in order to address COVID-19 related drinking water arrearages; and 3) adjust Department of Utilities Fiscal Year 2023/24 operating revenue budgets in the Water and Wastewater Funds (6005, 6006) based on actual revenues received.
Contact: Pravani Vandeyar, Director, (916) 808-1434, [email protected]; Chuong (Ryan) Pham, Business Services Manager, (916) 808-8995, [email protected]; David Levine, Program Manager, (916) 808-6213, [email protected]; Alaina Jordan, Administrative Analyst, (916) 808-5801, [email protected], Department of Utilities Presenter: None.
Attachments:
1-Description/Analysis
2-Resolution
Description/Analysis
Issue Detail: The City of Sacramento’s (City) Department of Utilities (DOU) recently applied for and received grant funding from the State Water Resources Control Board (SWRCB) through the California Water and Wastewater Arrearages Payment Program (CWWAPP) in the amount of $5,211,017, to credit eligible customer accounts, reducing the delinquent water and wastewater balances due to financial hardships related to the economic impacts of the Covid-19 pandemic between March 4, 2020 and June 15, 2021.
The State Water Board is now implementing the CWWAPP Extended Arrearage Program, which expands the arrearage period to encompass water and wastewater debt accrued between March 4,
File ID: 2023-01638 1/16/2024 Consent Item 2.
2020, and December 31, 2022.
As with the Water and Wastewater Arrearages Programs, the Extended Arrearage Program will not disburse funds directly to customers for overdue accounts. All funds disbursed will be paid directly to the eligible community water systems, wastewater treatment providers, and wastewater billing entities for bill credits to be applied to eligible customer accounts. Program Guidelines containing the program's full requirements are posted on the Extended Arrearage Program website.
The SWRCB conducted a state-wide survey of water systems to determine the total amount of drinking water debt accumulated in the state between March 4, 2020, and June 15, 2021. As there were remaining funds in this program, the State has implemented the Extended Arrearage Program, which expands the program end date to December 31, 2022.
The State Water Board has received $600 million appropriated by the Budget Act of 2021 (Senate Bill 129) and the Budget Act of 2023 (Assembly Bill 102) from the Coronavirus State Fiscal Recovery Fund, established by the American Rescue Plan Act of 2021 for the Extended Arrearage Program.
Policy Considerations: Council Resolution 2023-0205 requires Council approval for grant agreements and transfers of more than $250,000.
Economic Impacts: None.
Environmental Considerations:
California Environmental Quality Act (CEQA): It has been determined that the proposed activity is not a project pursuant to the ]CEQA Guidelines Section 15378(b)(4). The activities described in this report are government fiscal activities which do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment and are not subject to CEQA Guidelines Section 15060(c)(3).
Sustainability: Not Applicable.
Commission/Committee Action: Not applicable.
Rationale for Recommendation: Many Sacramento residents have been negatively impacted by COVID-19 and were unable to pay their water and wastewater bills, which resulted in reduced revenue collection by DOU. The passage and chaptering of Senate Bill 129 and Assembly Bill 102 has made $600 million available in State Funding to address COVID-19 related water and wastewater arrearages through the Extended Arrearages Program.
Financial Considerations: Approval of the application submission will allow the City to receive a monetary award from the State for the City’s drinking water arrearages in an amount not to exceed $3,429,376. Staff is recommending that DOU’s Fiscal Year 2023/24 operating revenue budget be
File ID: 2023-01638 1/16/2024 Consent Item 2.
adjusted based on the actual revenue received from the State.
Local Business Enterprise (LBE): Not Applicable.
Background: The CWWAPP is a short-term state program created to provide one-time state funding to community water systems (CWS) who are carrying customer arrearages brought on by the COVID -19 pandemic. It is unlikely that all arrearages will be covered by this funding. If that is the case, DOU will continue to work with customers that have past due accounts to collect per current collection procedures, including offering payment plans. DOU currently does not shut off water service on any account due to non-payment.
RESOLUTION NO. 2023-
Adopted by the Sacramento City Council
January 16, 2024
Funding Agreement between the California State Water Resources Control Board and the City of Sacramento for Payment of Drinking Water Billing Arrearages Resulting from the Covid-19 Pandemic, as Authorized and Appropriated by the California Budget Act of 2023 and Assembly Bill 102
PROGRAM BACKGROUND
A. On March 4, 2020, Governor Newsom proclaimed a state emergency due to the Covid-19 pandemic, issued Executive Order N-33-20 to require individuals to stay at home except as needed to maintain continuity of critical operations, issued Executive Order N-42-20 prohibiting discontinuation of water service indefinitely, and issued Executive Order N-60-20 that created a risk-based approach to reopening the economy.
B. In response to the economic conditions caused by the Covid-19 pandemic, Section 19.55 (17) of the State Budget Act of 2021, as established by Assembly Bill No. 128 (Chapter 21, Statutes of 2021) and as amended by Senate Bill No. 129 (Chapter 69, Statutes of 2021), provided nearly $1 billion to the State Water Resources Control Board to administer the California Water and Wastewater Arrearage Payment Program (CWWAPP) to reduce delinquent water and wastewater balances for customers experiencing financial hardships related to the economic impacts of the Covid-19 pandemic.
C. On September 21, 2021, the City Council adopted Resolution No. 2021-0289, authorizing a funding agreement between the City of Sacramento, Department of Utilities, and the State of California, State Water Resources Control Board for the CWWAPP.
D. On July 10, 2023, Governor Newsom signed a budget trailer bill expanding the CWWAPP, to the new California Extended Water and Wastewater Arrearage Payment Program (Extended Arrearage Program), this program lengthens the COVID-19 Relief Period from June 15, 2021, to December 31, 2022, with the state legislature allocating the remaining budget of $600 million in federal funding to the Extended Arrearage Program, these funds are the remaining funds after the implementation of the original CWWAPP. The new Extended Arrearage Program will include both water and wastewater debt from residential and commercial customers.
E. The Budget Act of 2021 (Senate Bill 129) and the Budget Act of 2023 (Assembly Bill 102) formally established the Extended Arrearage Program, specifying the program’s requirements for the water and wastewater system participation.
RESOLUTION NO. 2023-
F. Eligible customers are all residential and commercial customers, past due bills mean any customer bills that are 60 days or more past due and includes both active and inactive accounts, as well as customer accounts that have payment plans or payment arrangements, and the Covid-19 pandemic bill relief period means the period starting from March 4, 2020, and ending December 31, 2022.
G. To receive the Extended Arrearage Program funding on behalf of eligible customers, a community water system must complete both a survey and application including submitting all necessary data and information to support the water system’s request for the Extended Arrearage Program.
H. If there are insufficient funds, the Board must allocate funds on a proportional basis.
I. If there are sufficient funds to reimburse the total amount of reported arrearages and revenue shortfalls of community water systems, that state board shall establish a program for funding water and wastewater treatment provider arrearages and shortfalls in accordance with the remaining funds.
J. The board must begin disbursing funds no later than within 60 days after receiving funds and must later than water balances for customers experiencing financial hardships related to the economic impacts, the City.
K. Within 60 days of receiving funds, community water and wastewater systems must allocate payments as bill credits to customers to help address past-due bills during the covid-19 pandemic bill relief period and notify customers of the amounts credit to their accounts.
L. A community water and wastewater system receiving assistance under the Extended Arrearages Program may expend up to 3 percent, or up to one million dollars ($1,000,000), whichever amount is less, of that assistance for administrative costs incurred in applying for the assistance or complying with use and reporting conditions of the assistance.
M. Assembly Bill 148 created customer protections that require a community water and wastewater system to offer a payment plan to affected customers and refrain from discontinuing service.
N. The City of Sacramento operates a community water and wastewater system with eligible customers that have past due bills during the Covid-19 pandemic bill relief period.
RESOLUTION NO. 2023-
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL
RESOLVES AS FOLLOWS
Section 1. In the best interests of the City, an application for water and wastewater funding be submitted to the Extended Arrearages Program.
Section 2. The City Manager or the City Manager’s designee is authorized to apply for funding through the Extended Arrearage Program in an amount not to exceed $3,429,376 for water and wastewater arrearages, accept and expend the Extended Arrearage Program funds in the amount not to exceed $3,429,376, by directly crediting eligible customer accounts, and executing all reporting and compliance documentation applicable to the program.
Section 3. The City Manager or the City Manager’s designee is authorized to adjust Department of Utilities Fiscal Year 2023/24 operating revenue budget in the Water and Wastewater funds (6005, 6006), based on the actual revenue received, in an amount not to exceed $3,429,376.