HomeMy WebLinkAboutAgenda Report - September 15, 2021 C-17AGENDA ITEM C,,17
CITY OF LODI
COUNCIL COMMUNICATION
TM
AGENDA TITLE: Adopt Resolution Authorizing the City Manager to Execute Necessary Documents
for the Participation in the California Arrearage Payment Program and the
California Water and Wastewater Arrearage Payment Program to Request Funding
for Unpaid Electric, Water, and Wastewater Services Incurred During the COVID-
19 Pandemic and Ratifying the City Manager's Decision to Suspend the City of
Lodi Utility Debt Relief Program
MEETING DATE: September 15, 2021
PREPARED BY: Deputy City Manager
RECOMMENDED ACTION. Adopt resolution authorizing the City Manager to execute necessary
documents for the participation in the California Arrearage Payment
Program and the California Water and Wastewater Arrearage
Payment Program to request funding for unpaid electric, water, and
wastewater services incurred during the COVID-19 pandemic and
ratifying the City Manager's decision to suspend the City of Lodi
Utility Debt Relief Program.
BACKGROUND INFORMATION: In July 2021, the State Legislature allocated nearly $2 Billion of the
State of California's American Rescue Plan Act (ARPA) funding to
address statewide energy, water, and wastewater utility arrearages
at the customer level in order to provide relief to customers in need and keep utilities from shouldering
inordinately high utility account debt burdens.
On July 16, 2021, Governor Newsom signed AB 135, which created the California Arrearage Payment
Program (CAPP) to administer funding for electric utility customer arrearages. There is $993.5 million in
the program, $694.9 million for Investor -Owned Utilities and Community Choice Aggregators and $298.5
million for publicly owned utilities and co-operative electric utilities.
Funding may be moved between these programs based on need.
Utility customers do not need to apply to receive assistance under the CAPP program. If a customer
account is eligible, a credit will be automatically applied to the customer bill. The City of Lodi is applying
for CAPP assistance on behalf of customers who incurred a past due balance of 60 days or more on their
energy bill during the COVID-19 pandemic relief period covering March 4, 2020 through June 15, 2021.
The priorities of the CAPP assistance to eligible customer accounts are:
1. Active residential customers with past due balances who are at risk of disconnection due to
non-payment.
2. Active residential customers with past due balances.
APPROVED: Steve SchwabaUer
Stephen Schwabauer, City Manager
3. Inactive residential customers with past due balances.
4. Commercial customers with past due balances.
The California Department of Community Services and Development (CSD) is administering this
program. Additional information can be found at https://www.csd.ca.gov/Pages/CAPP.aspx.
On July 22, 2021, Governor Newsom signed AB 148, which created the California Water and Wastewater
Arrearage Payment Program (CWWAPP) to administer funding for water/wastewater utility customer
arrearages. This program is the counterpart to the CAPP program, but covers water/wastewater utilities.
The State Water Resources Control Board (SWRCB) is administering this program, working with
community water systems, and if funding is available, wastewater treatment providers. The City of Lodi is
applying for CWWAPP assistance on behalf of customers who incurred a past due balance of 60 days or
more on their water or sewer bill during the COVID-19 pandemic relief period. This program covers
residential and commercial water system customers with arrears accrued March 4, 2020 -June 15, 2021.
There is $985 million in the program. Additional information can be found at
https://www.waterboards.ca.gov/arrearage_payment_program/.
In May of 2021, the City Council approved an allocation of the City's ARPA funds towards a Utility Debt
Relief program. The City's program required customers to apply for the relief and document or attest to
an income loss from 2019 to 2020 to receive up to 75% off their delinquent utilities accrued during the
COVID-19 emergency. This program has received minimal usage. Despite higher than usual
delinquency rates in the City, most accounts applying are unable to document or attest to income loss.
Additionally, the rate of applications is substantially less than anticipated. Staff attributes this to an
unusually high level of government assistance programs at federal, state and local level creating
confusion for applicants. Despite efforts to advertise in print, social media, on buses and other stationary
locations, the City's Utility Debt Relief program is not having its intended benefit. Upon word of CAPP
and CWWAPP, staff has suspended the City's Utility Debt Relief program and is asking Council to ratify
that decision with the action tonight. CAPP and CWWAPP provide a greater benefit to residents and
requires zero effort on the part of residents to participate. ARPA funds allocated to this program will need
to be reallocated at a future date.
FISCAL IMPACT: There is no direct cost to participate in the CAPP and CWWAPP programs.
All efforts to compile customer information based program requirements
and to apply for each program will be conducted with current staff
members. All funding received from the programs will be applied as bill
credits to each customer account after receipt from the respective state
programs. Failure to participate in the program will leave the City with
inordinately high utility account debt burdens. Much of this burden will be
uncollectible, or collected at heavily discounted rates absent this program.
FUNDING AVAILABLE: Funding for the program will come from the State of California.
Andrew Keys
Andrew Keys
Deputy City Manager
Signature: GMAr )�rp Signature:
5[evr, iu a[ r (SCp 7,202115:05 PDT)
Email: akeys@lodi.gov Email: sschwabauer@lodi.gov
RESOLUTION NO. 2021-263
A RESOLUTION OF THE LODI CITY COUNCIL AUTHORIZING
PARTICIPATION IN THE CALIFORNIA ARREARAGE PAYMENT
PROGRAM AND THE CALIFORNIA WATER AND WASTEWATER
ARREARAGE PAYMENT PROGRAM AND SUSPENDING THE CITY
OF LODI UTILITY DEBT RELIEF PROGRAM
WHEREAS, on March 4, 2020, Governor Newsom proclaimed a state of emergency due
to the COVID-19 pandemic, issued Executive Order N-28-20 directing the California Public
Utilities Commission to monitor customer service protection measures implemented by utilities,
issued Executive Order N-33-20 to require individuals to stay at home except as needed to
maintain continuity of crucial operations, and issued Executive Order N-60-20 that created a risk-
based approach to reopening the economy, among other executive actions; and
WHEREAS, the stay at home order and risk-based reopening framework were rescinded
on June 11, 2021 by Executive Order N-07-21 and many provisions of other Executive Orders
were phased out by Executive Order N-08-21; and
WHEREAS, in order to support stay at hom
resulting economic impacts, the City of Lodi ceasec
assessment of late fees for nonpayment in March
customers benefitting from the California Arrearage
Water and Wastewater Arrearage Payment Program
guidelines; and
orders and protect customers from the
service suspension for nonpayment and
2020 and will continue this practice for
Payment Program (CAPP) and California
(CWAPP) as required by each program's
WHEREAS, there have been economic impacts as a result of the COVID-19 pandemic
and associated public health measures, leaving many Californians unable to pay their utility bills
due to lack of reliable and consistent employment; and
WHEREAS, community electric, water, and wastewater systems continue to be negatively
affected by the impacts and requirements as a result of the State's drought conditions, making
assistance critically important; and
WHEREAS, in response to the economic conditions caused by the COVID-19 pandemic,
item 4700-162-8506 of Section 2.00 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 $993,500,000 to the State Department of Community Services and
Development ("department") to administer the California Arrearage Payment Program (CAPP) to
reduce delinquent electricity and natural gas utility balances for customers experiencing financial
hardships related to the economic impacts of the COVID-19 pandemic; and
WHEREAS, funding for both the CAPP and CWWAPP are payable from the State's share
of the federal Coronavirus Fiscal Recovery Fund of 2021 which is funded from the State's
allocation of the federal American Rescue Plan Act of 2021 (ARPA); and
WHEREAS, Assembly Bill No. 135 (Chapter 85, Statutes of 2021) formally established the
CAPP within the department, enumerating the program's requirements for utility participation and
setting aside $298,953,250 of the funds provided in Item 4700-162-8506 of the State Budget Act
of 2021 for financial assistance to customers of local publicly -owned electric utilities; and
WHEREAS, Assembly Bill No. 148 (Chapter 115, Statutes of 2021) formally established
the CWWAPP within the Board, enumerating the program's requirements for water and
wastewater system participation; and
WHEREAS, a local publicly -owned electric utility is considered a utility applicant under
CAPP and may apply to the department for CAPP funds for eligible customer accounts for past
due bills during the COVID-19 pandemic bill relief period; and
WHEREAS, eligible customers are all residential and commercial customers, past due
electric, water, and wastewater 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 March 4,
2020, and ending June 15, 2021; and
WHEREAS, to receive CAPP or CWWAPP funding on behalf of eligible customers, a utility
applicant must complete both a utility survey and application, including submitting all necessary
data and information to support the utility applicant's request for CAPP or CWAPP funding; and
WHEREAS, the department is required to disburse CAPP funds as expeditiously as
possible to utility applicants, but no later than January 31, 2022; and
WHEREAS, within 60 days of receiving CAPP or CWAPP funds, a utility applicant must
issue CAPP or CWAPP assistance benefits to customers as bill credits to help address the eligible
past due balance and must include a statement that the credits are a result of California's CAPP
or CWAPP funding. An eligible utility customer need not apply for the program; and
WHEREAS, if CAPP funding is not sufficient to meet all needs, utility applicants must
prioritize the issuance of CAPP assistance first to active residential customers who are past due
and who, absent the CAPP assistance might be subject to service disconnection, consistent with
the current law, due to nonpayment of balances incurred during the COVID-19 pandemic bill relief
period, second to active residential customers with delinquent balances incurred during the
COVID-19 pandemic bill relief period, third to inactive residential accounts with delinquent
balances incurred during the COVID-19 pandemic bill relief period, and fourth to commercial
customers with delinquent balances incurred during the COVID-19 pandemic bill relief period; and
WHEREAS, if there are insufficient CWAPP funds, the Board must allocate funds on a
proportional basis; and
WHEREAS, if there are sufficient CWAPP funds to reimburse the total amount of reported
arrearages and revenue shortfalls of community water systems, the State Board shall establish a
program for funding wastewater treatment provider arrearages and shortfalls in accordance with
the remaining funds; and
WHEREAS, the Board must begin disbursing CWAPP funds no later than November 1,
2021 and complete distribution of funds by January 31, 2022; the wastewater service program
must start following substantial completion of the water service program and in no instance later
than February 1, 2022; and
WHEREAS, Assembly Bill No. 135 created customer protections to require a utility
applicant to notify customers of the option to enter into an extended payment plan with late fees
and penalties waived for any remaining balances after CAPP funds are credited to the customer's
account, to refrain from discontinuing service while CAPP applications are pending, for 90 days
after the CAPP benefit is applied to a customer account, and while a customer remains current
on a repayment plan, and to waive associated late fees and accrued interest for customers
awarded CAPP benefits; and
WHEREAS, Assembly Bill 148 created customer protections that require a community
water system to offer a payment plan to affected customers and refrain from discontinuing service
until (1) September 30, 2021 or (2) for a customer that has been offered an opportunity to
participate in a payment plan, the date the customer misses the enrollment deadline for, or
defaults on, the payment plan, whichever is later; and
WHEREAS, the City of Lodi operates a publicly -owned electric utility and a community
water system both with eligible customers that have past due bills during the COVID-19 pandemic
bill relief period.
NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby approve
the City's publicly -owned electric utility's participation in CAPP and the City's community water
system participation in CWAPP and authorizes the City Manager or his or her designee to execute
program participation on behalf of the City of Lodi; and
BE IT FURTHER RESOLVED that the City Council hereby ratifies the City Manager's
decision to suspend the City's ARPA Utility Debt Relief Program due to lack of participation from
members of the public and its overlap with the CAPP and CWAPP which provide direct relief to
customers with no application required; and
BE IT FURTHER RESOLVED, pursuant to Section 6.3q of the City Council Protocol
Manual (Res. No. 2019-223), the City Attorney is hereby authorized to make minor revisions to
the above -referenced document(s) that do not alter the compensation or term, and to make
clerical corrections as necessary.
Dated: September 15, 2021
I hereby certify that Resolution No. 2021-263 as passed and adopted by the City Council
of the City of Lodi in a regular meeting held September 15, 2021 by the following votes:
AYES: COUNCIL MEMBERS — Chandler, Hothi, Khan, Kuehne, and
Mayor Nakanishi
NOES: COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS — None
ABSTAIN: COUNCIL MEMBERS — None
JENNIFE CUSMIR
City Clerk
2021-263