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HomeMy WebLinkAboutItem 11b - Residential Water Service Shut-Off for Nonpayment Policy DATE: November 19, 2019 TO: Honorable Mayor and City Council FROM: Tom Tait, Public Works Services Director By: Mandy Jiang, Management Analyst SUBJECT: ADOPTION OF A RESIDENTIAL WATER SERVICE SHUT-OFF FOR NONPAYMENT POLICY Ordinance No. 2368 amending Article VII, Chapter 5 of the Arcadia Municipal Code concerning the discontinuation of residential water service for nonpayment Recommendation: Introduce Resolution No. 7283 adopting a Policy on Residential Water Service Shut- Off for Nonpayment Recommendation: Adopt SUMMARY Senate Bill 998 requires all public water systems to have a written policy on water service discontinuation for nonpayment. Specifically, the provisions of the bill would require amendment to the City’s existing ordinance related to water billing and the adoption of a written policy. The policy would be applicable to all residential water customers and result in expanded notification procedures prior to service shut off for nonpayment. As a public water system with more than 200 service connections, the City is required to comply with Senate Bill 998 by February 1, 2020. It is recommended that the City Council introduce Ordinance No. 2368 concerning the discontinuation of residential water service for nonpayment and adopt Resolution No. 7283 adopting a Policy on Residential Water Service Shut-Off for Nonpayment. BACKGROUND Adopted in 2018, Senate Bill 998 – Water Shutoff Protection Act (“SB 998”) is codified in the CA Health and Safety Code to provide additional procedural protections and expand upon the existing safeguards related to utility service disconnections in the Public Utilities Code and Government Code. Under SB 998, public water systems with more Adoption of a Residential Water Service Shut-Off for Nonpayment Policy November 19, 2019 Page 2 of 5 than 200 connections are required to adopt a written policy on residential water service shut off for nonpayment, applicable to all residential water customers. SB 998 includes a number of similar and redundant provisions that are already in existence and codified in the Public Utilities Code and Government Code. Nevertheless, the City must comply with SB 998. Through the adoption of SB 998, the California Legislature intends to protect Californians from losing access to water service due to inability to pay without proper notice and sufficient time to cure. Specifically, the bill requires an adopted policy by the City, which must fulfill the following key requirements: • Prohibit discontinuation of residential service for nonpayment until a payment by a customer has been delinquent for at least 60 days; while the delinquent payment is under investigation by the utility or under review for appeal; and while the customer is enrolled in an alternative payment arrangement. • Provide written or telephone notice at least seven days before discontinuation. The notice must contain information on the delinquent amount, a deadline to contact the utility to arrange for alternative payment arrangements, procedures to avoid discontinuation, and a description of the bill review and appeals process. • Provide the customer with information on how to restore service and include the utility’s contact information to discuss options for averting service discontinuation. • For residential customers who demonstrate a household income below 200% of the federal poverty line, waive interest charges on delinquent bills and limit the reconnection service fee to $50 during business hours and $150 after hours. • Prohibit discontinuation under certain medical and financial circumstances if the customer agrees to an alternative payment arrangement and provides certification. • Require the utility to make good faith effort to inform by written notice both the customer of record and residential tenants that water service will be discontinued if payment or payment arrangements are not arranged. In an effort to ensure transparency and accessibility, SB 998 requires translations of the adopted policy in the following languages: English, Spanish, Chinese, Vietnamese, Tagalog, Korean, and any other language spoken by 10% of the service area. The policy in the languages above must be posted on the agency’s website and made available upon request. Adoption of a Residential Water Service Shut-Off for Nonpayment Policy November 19, 2019 Page 3 of 5 DISCUSSION Under existing regulations and the City of Arcadia’s Municipal Code, the City’s current billing procedure operates in exceedance of the 60-day minimum provision contained in SB 998. Specifically, the City’s billing procedure is as follows: 1. The City of Arcadia bills on a bimonthly cycle and customers receive a water bill every 60 days. Language on the City’s water bill specifies that charges shall become delinquent if not paid within 15 days from the date of mailing indicated on the bill. 2. A first past due notice is mailed to the customer 30 days after the original bill. 3. A second past due reminder is sent 30 days after the first past due notice. This second reminder includes the past due amount and the new current billing cycle amount due. At this point in time, 60 days have elapsed since the first bill and payment is delinquent for 45 days. 4. A final past due notice for the original delinquent amount is mailed 30 days following the most recent bill. At this time, 90 days have elapsed since mailing of the original bill and the payment has been delinquent for 75 days. The final notice includes language stating that the account is subject to service shut off if the balance is not paid. Thus, the City’s current billing procedure is more lenient than some of the key provisions described in SB 998. In order to comply with the remaining provisions under SB 998, the following changes are proposed in the written policy: • Reduce service reconnection fees for customers meeting SB 998’s low income provision during normal business hours from $125 to $50, and reduce the after- hours rate from $240 to $150. These rates are subject to CPI increases starting 2021 and will be noted in the Public Works Services Department’s (“PWSD”) annual fee resolution. • Incorporate written notification prior to service discontinuation, as required, based on the applicable customer circumstances described in the policy. The City will also make good faith effort to contact the customer in person or by telephone seven days before discontinuation. • Implement third party notification service to seniors and dependent adults, where the City will attempt to notify a person designated by the customer to receive Adoption of a Residential Water Service Shut-Off for Nonpayment Policy November 19, 2019 Page 4 of 5 notification when the customer’s account is past-due and subject to service termination. For residencies where the landlord is the customer of service, notify the occupants or tenants of their right to become customers of the City. • Implement forms for extended payment and amortization schedules. Incidentally, this formal process could create efficiency in the timely collection of delinquent payments. The current process is lenient towards observing amortization and extension schedules; the City obliges customers by not discontinuing service and allows subsequent requests for payment extensions. • Maintain a new database of customers meeting the low income definition described in SB 998 as well as customers with health issues that could be impacted by service discontinuation. The Water Division already maintains a list of “low income” customers, which may include those on a limited fixed income; however, the list is not as stringently verified as 200% below federal low income. Historically, this list has been short and may foreseeably remain short based on the definition of low income specified in SB 998. Further, SB 998 specifically requires the agency to allow a residential customer to contest or appeal their bill for the City Council’s final determination. This would only occur after the Utilities Superintendent and or Public Works Services Director has reviewed the customer’s complaint and offered an alternative payment arrangement. If the customer requests to appeal to the City Council for a final determination, the customer will need to file written appeal with the City Clerk and schedule to be heard at a City Council meeting. It should be noted that the PWSD already follows a procedure in which the Utilities Superintendent and or Public Works Services Director will work with the customer to resolve a disputed bill. Rarely would the customer escalate to the Public Works Services Director and such instances occur less than three times per year, ending in a timely resolution. The appeal to City Council would be the last step added to the Department’s existing procedure for such instances. Lastly, the City will be required to report the number of annual discontinuations of residential service for nonpayment on its agency website and to the State Water Resources Control Board. SB 998 would require the City to comply by February 1, 2020, subject to fines for noncompliance. Given Arcadia’s local demographics, translation of the new policies into Spanish, Chinese, Vietnamese, Tagalog, and Korean will sufficiently meet the 10% service area requirement identified in SB 998. Adoption of a Residential Water Service Shut-Off for Nonpayment Policy November 19, 2019 Page 5 of 5 ENVIRONMENTAL ANALYSIS The proposed action does not constitute a project under the California Environmental Quality Act (“CEQA”), and it can be seen with certainty that it will have no impact on the environment. Thus, this matter is exempt under CEQA. FISCAL IMPACT The financial impact is not clear at this time. Costs associated with printing notices and translation will be absorbed in the PWSD’s Utilities operating budget. Additional staff time will be required to implement the policy; however, the impact would be minimal. RECOMMENDATION It is recommended that the City Council: a. Introduce Ordinance No. 2368 amending Article VII, Chapter 5 of the Arcadia Municipal Code regarding concerning the discontinuation of residential water service for nonpayment; and b. Adopt Resolution No. 7283 adopting a Policy on Residential Water Service Shut- Off for Nonpayment. Attachments: Ordinance No. 2368 Resolution No. 7283 Senate Bill 998