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HomeMy WebLinkAbout2021-01-21; Utility Billing Late Fee Relief Update; Quiram, VickiTo the members of the: CITY COUNCIL Date 1/-J..i/'l.l CA ...::L CC ~ cM _y'___ACM _:!'_DCM{3)..;f_ Ccarlsbad Municipal Water District Memo ID #2021017 CMWD Board Memorandum Jan. 21, 2021 To: Carlsbad Municipal Wate From: Vicki Quiram, General Ma a Paz Gomez, Deputy City Man Laura Rocha, Deputy City Ma Via: Scott Chadwick, Executive Ma a Re: Utility Billing Late Fee Relief U This memorandum provides an update on suspension of utility bill late fees during the COVID-19 state of emergency. Background Due to the transition to a new utility billing system, as well as the COVID-19 pandemic state of emergency, the Executive Manager implemented, and the Carlsbad Municipal Water District (CMWD) Board of Directors (Board) confirmed on May 5, 2020, temporary relief measures which included the suspension of late fee assessments on past due utility bills. The Board also authorized the Executive Manager to extend the temporary relief measures through June 30, 2020, or the end of the COVID-19 pandemic state of emergency, if necessary. Since the City of Carlsbad and CMWD are still in a state of emergency, these measures have remained in place. This memorandum is to update the Board on the fiscal impact of suspending late fee assessments. Discussion The Utilities Billing Division in the City of Carlsbad's Finance Department manages CMWD's water billings and collections. After the declaration of the COVID-19 pandemic state of emergency, the Executive Manager implemented, and the Board confirmed on May 5, 2020, the suspension of potable water shutoffs and late fee charges through the end of the state of local emergency. Late fees assessed on accounts not paid by the due date are 10% of past due balance, not to exceed $50. Late fees generated approximately $400,000 in revenue for the city's utilities in fiscal years 2017-18 and 2018-19. With the Governor's Executive Order N-42-20 prohibiting the discontinuation of water service during the COVID-19 emergency, and the suspension of late fees, there is no penalty for customers who do not pay their utility bill when due. This has resulted in difficulty collecting outstanding balances and an increase in past due accounts. As of Dec. 1, 2020, there were 408 past due accounts totaling $418,149. Carlsbad Municipal Water District 5950 El Camino Real I Carlsbad, CA 92008 I 760-438-2722 I 760-431-1601 fax I www.carlsbadca.gov Board Memo -Utility Billing Late Fee Relief Update Jan. 21, 2021 Page 2 Neighboring water districts have experienced the same, if not worse, challenges and, as a result, many districts have reinstated late fees. The summary below shows which neighboring districts are assessing late fees. Carlsbad continues to mail out past due notices and alert customers by phone when their account has become over 60 days past due, encouraging them to pay as much as possible to avoid large balances that will be due in the future. Water District Assessing Late Fees Carlsbad City of Escondido Elsinore Valley Water Encinitas X Helix Lakeside X Oceanside X Olivenhain Otay X Padre Dam X Poway X Ramona Municipal Water District X San Dieguito Water District Santa Fe Irrigation District X Sweetwater Vallecitos X Vista Irrigation District X Without late fees or shut offs, these past due accounts will continue to grow, and many customers will be faced with large balances and possible discontinuation of service once the Governors order is lifted. While the city remains sensitive to the economic impacts resulting from the COVID-19 pandemic, shelter-in-place orders, and resulting economic impacts, reinstating late fees may encourage customers to pay their bills. Next Steps Staff will return to the Board in March 2021. If the state of emergency has not ended at that time, staff will bring forward an item at a future City Council Meeting for the Board's consideration on the reinstatement of late fees. In addition, staff will be providing a separate update for the Board regarding utility bill financial assistance. cc: Geoff Patnoe, Assistant City Manager Celia Brewer, General Counsel Robby Contreras, Assistant General Counsel Ryan Green, Finance Director