CALIFORNIA WATERAND WASTEWATER
ARREARAGE PAYMENT PROGRAM
City Council Meeting
January 11, 2022
Item 3.5
Presenters:
John Kachmanian, Deputy Director
Revenue Management Division, Finance Department
Jeffrey Provenzano, Deputy Director
Environmental Services Department
BACKGROUND
• San José Municipal Water System (“Muni Water”) provides water to about 130,000 people (approximately 26,000 customer accounts) in the North San José, Alviso, Evergreen, Edenvale, and Coyote Valley areas.
• Muni Water Customer Assistance Programs since March 2020 COVID-19 Emergency Declarations
City Council ordinance suspended late charges for water bills with due dates ranging from March 17, 2020 through June 30, 2020.
State of California April 2020 moratorium on utility disconnections for nonpayment expired December 31, 2021.
• Financial hardship due to the COVID-19 pandemic continues for many San José residents and businesses
In December 2019, Muni Water customers had a cumulative outstanding balance of approximately $250,000; this balance has grown to approximately $1.4 million as of June 2021. 2 CALIFORNIA WATERAND WASTEWATER
ARREARAGE PAYMENT PROGRAM
• The State of California requested $1 Billion in American Rescue Plan Act (“ARPA”) funding to establish the State of California Water and Wastewater Arrearage Payment Program (“Program”)
• The State Water Resources Control Board (“SWRCB”) is the cognizant agency
• Program distributes funding to eligible water providers with accrued residential and commercial arrearages during the relief period of March 2020 through June 2021 (“Relief Period”)
3 PROGRAM TERMS & CONDITIONS
• Participating Water Providers must:
Allocate payments as bill credits to customer accounts within 60 days of receiving payment;
Waive customer late fees for any arrearages accrued during the Relief Period; Notify customers of the amount credited, and offer to enroll customers with remaining debt into a payment plan;
Not discontinue water service until the customer defaults on the payment plan or misses the deadline to enroll in the payment plan; Report on expenditures and customer credits.
4 SAN JOSÉ ALLOCATION
Customer Type Service Arrearages
Late Fees
(to be waived) Total
Water – Single Family $ 595,478 $ 368,718 $ 964,196
Water – Commercial 47,941 44,865 92,806
Subtotal Arrearages $ 643,419 $ 413,583 $ 1,057,002
Estimated 3% Administrative
Funding Allowed 19,303
Total Program Funding Estimated $ 662,719
5 MUNI WATER CUSTOMERS RECEIVING
ARREARAGE ASSISTANCE
• Arrearage Credits by District (Districts 4, 7, 8)
6 STAFF RECOMMENDATION
1) Accept the staff report regarding the California Water and Wastewater Arrearage Payment Program (“Program”).
2) Adopt a resolution:
a. Ratifying the City of San José application for the Program, and authorizing the City Manager, Director of Finance or their designees to negotiate and execute the necessary agreements, including any amendments or revisions, and other actions, to execute the grant and fulfill the Program requirements, and b. Accepting up to $663,000, or the amount awarded, in Program funding; and c. Authorizing the Director of Finance to waive late fees for any arrearage accounts whose approval exceeds the Director of Finance signature authority, for an estimated total of $37,601, in compliance with Program requirements; and
d. Authorizing the City Manager, Director of Finance or their designees to apply for, negotiate and execute any documents, and take other actions necessary to receive Program funds for wastewater arrearages if future funding becomes available, including the waiver of interest or late and other fees. 7