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HomeMy WebLinkAbout4.a. Discuss Customer Assistance Program Alternative, as requested by Board of Directors at the April 18, 2019 Meeting Page 1 of 25 Item 4.a. CENTRAL SAN BOARD OF DIRECTORS . , , . POSITION PAPER . , DRAFT MEETING DATE: OCTOBER 15, 2019 SUBJECT: DISCUSS CUSTOMER ASSISTANCE PROGRAM ALTERNATIVES, AS REQUESTED BY BOARD OF DIRECTORS AT THE APRI L 18, 2019 MEETING SUBMITTED BY: INITIATING DEPARTMENT: PHILIP LEIBER, DIRECTOR OF FINANCEAND ADMINISTRATION-FINANCE ADMINISTRATION REVIEWED BY: KEVIN MIZUNO, FINANCE MANAGER DANEA GEMMELL, PLANNING & DEVELOPMENT MANAGER ANN SASAKI, DEPUTY GENERAL MANAGER ISSUE Central San does not presently offer a program to assist customers with the payment of their sewer service charge should they encounter financial difficulties on a short-term or long-term basis. In connection with the last rate hearing, Board Members requested staff to develop alternatives for a customer assistance program. BACKGROUND Central San Board Members requested, during the public hearing on the four-year rate adjustments on April 18, 2019, that staff report back on potential customer assistance programs. Additionally, discussion of potential customer assistance programs has arisen at past Board meetings initiated by Board Members and public commenters. Consideration of a customer assistance program is timely and appropriate for multiple reasons: • Commonality of such programs: 30% of large utilities serving over 100,000 customers have one or more customer assistance programs according to a 2016 EPA led study"Drinking and Wastewater Utility Customer Assistance Programs." o The 2015 National Association of Clean Water Agencies (NACWA) Financial Survey indicated that two thirds of respondents (80 out of 122) reported having programs for those customers that have difficulty paying their bill, with payment plans the most common offering (39%), followed by help from community organizations (34%), lifeline/discounted rates (20%), and October 15, 2019 Special ADMIN Committee Meeting Agenda Packet- Page 19 of 45 Page 2 of 25 utility collected funds from customers to fund the program (12%). Twenty four of those agencies reported that between 0.3% and 18% of customers (with median of 2%) used some form of payment assistance. o Attachment 1 lists California water/wastewater utilities that have a customer assistance program and provides some indication of the size of potential bill discounts for eligible groups. • Rates have increased at a pace above the Consumer Price Index(CPI). • Certain customers have inquired as part of the Proposition 218 protest process during past rate hearings about the availability of customer assistance programs, particularly for seniors on fixed incomes. • On September 25, 2012, Governor Brown signed Assembly Bill (AB) 685, making California the first state in the nation to legislatively recognize the human right to water. Section 106.3 of the Water Code statutorily recognizes that"every human being has the right to safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitary purposes."AB 401 (2015) charged the State Water Resources Control Board with the development of alternatives for a statewide customer assistance program for drinking water.A draft report was issued in January 2019 with alternatives for funding, eligibility and distribution of benefits for a "Low-I ncome Water Rate Assistance Program." While not presently covering wastewater, it is conceivable that the State could further expand such programs to include wastewater in the future. • While the median household income in Central San's service territory is higher than the State ($71,805 as of 2017) and national average ($60,336), nonetheless, sizable numbers of lower income people are present. Data from the last Census (2010) and the 2015 American Community Survey indicate a poverty rate of about 5.2% for individuals in the Central San service territory excluding wholesale areas of Clayton/Concord (or 7.4% including those areas as well).An analysis of census and other data indicates that approximately 9,173 households in the service area currently receive means-tested financial assistance (through programs like Medicaid, SNAP, CHI P, LI HEAP)which provide assistance to persons with incomes lower than specified levels, typically 130-150% of federally defined poverty levels). The 2016 EPA study specified four types of customer assistance programs: 1. Bill Discount(long-term reduced bill) 2. Flexible Terms (to help customers stay current with bills by waiving penalties, fees, interest, and/or changing how they are billed over time) (This program is not relevant to Central San's billing model.) 3. Lifeline Rate (subsidized rate for basic allotment) 4. Temporary Assistance (short-term or one-time basis to prevent disconnection of service or restore service after disconnection for households facing an unexpected hardship) I n these or other alternatives, numerous issues have to be addressed including: • Funding sources given Proposition 218 constraints • Eligibility definitions and administration issues; potential recipients include one, several or a combination of the following: • Low-income households • Households in crisis (due to an emergency/change in circumstances) • Senior citizens • Disabled individuals Some programs (such as the State Controller's property tax deferral program listed below) require that individuals be both low income AND senior or disabled. October 15, 2019 Special ADMIN Committee Meeting Agenda Packet- Page 20 of 45 Page 3 of 25 Central San staff has conducted research into various programs and has identified, at a high level, many potential alternatives. Some of these alternatives would require significant additional development prior to implementation.Additional commentary regarding these options is provided in Attachment 2. ALTERNATIVES 1. Sewer Service Charge (SSC) discount program A lower SSC is billed through the tax roll, or the normal amount is billed, then is "paid/credited" with other Central San revenues. Certain other California sewer service providers offer discounts ranging from 5% (Sausalito Marin City Sanitary District)to as much as 35% (East Bay Municipal Utility District (EBMUD) and San Francisco Water Power and Sewer(SFPUC)). The funding source for such discounts could be other Central San revenue sources not subject to Proposition 218 requirements. Attachment 2 provides additional detail on the revenue loss implications of a SSC discount program based on various discount levels and eligibility levels. As a variation or supplement to an SSC discount, some agencies also have programs that aim to benefit residents who do not directly pay a bill (as only homeowners directly pay the SSC, on their property tax bills). I n such cases, reduced bills are provided for building owners providing housing to qualified low-income renters, or other housing providers such as homeless shelters. The revenue loss implications of an program extended to renters are yet to be quantified, and would be higher than shown in Attachment 2. 2a. Existing State Controller property tax postponement program There is an existing state program that allows eligible property owners to defer payment of their property tax. A customer applies to participate in the program through the State Controller. The customer must be lower income (less than $35,500 in 2017) and one of the following (1) 62 or older, (2) blind or(3) disabled. The deferred amount builds up over time, constitutes a lien against the property, and bears interest at a 7% rate. Central San could inform customers via our webpage and newsletter or upon inquiry about the availability of this program. 2b. Deferral program (administered by Central San) Similar to the above, except the customer applies for deferral through a specific program designed and administered by Central San. The program elements could be broader than allowed for by the State deferral program. Central San would then bill a lower SSC rate through the County(or could bill the full amount and "pay" with Central San funds). The deferred amount would build up over time, and would constitute a lien against the property, with a 6% interest rate assessed similar to the Alhambra Valley Assessment District(AVAD) program. The funding source in a given year could be ad valorem taxes or borrowed funds. Over time, the program would be expected to be essentially revenue neutral. 3. Third-party assistance (Central San referral to reverse mortgage provider) A reverse mortgage is a means by which a homeowner can draw down the equity in their home and receive a fixed monthly payment. The loan is not repayable until the death of the owner or until they move. A homeowner who is "house rich" and income poor(such as a senior citizen on a fixed income) could be given information about reverse mortgages. Central San would continue to bill the standard SSC. The customer would use proceeds from the reverse mortgage to pay their property tax bill including the SSC. While not a broad customer assistance program, this could be of benefit to certain individuals. 4. Third-party charitable organization pays the bill on behalf of the customer Customers are referred to a third party which provides funding to pay their utility bill. Such programs are more typically used where a customer is having trouble paying a particular monthly utility bill and is October 15, 2019 Special ADMIN Committee Meeting Agenda Packet- Page 21 of 45 Page 4 of 25 facing an impending shutoff. Such relief programs may not be as workable/relevant given Central San's once per year sewer service billing on the property tax bill. 5. Customer-funded contribution program This program would involve soliciting Central San's customers to fund a program to help their neighbors who need temporary or ongoing assistance in paying the SSC. As Central San does not directly bill most customers, a typical "bill insert" request as used by many utilities would not be applicable. Other communications, such as the Pipeline could be used. The amount collected would likely be limited. (Another major Bay Area agency indicated their donations were only on the order of a few thousand dollars annually.) 6. Targeted partnerships with or assistance to organizations supporting the finally constrained Some agencies have partnered with or supported organizations that assist the needy; this could be in addition to or in lieu of direct assistance (such as bill discounts)to needy individuals. Possibilities include providing wastewater related assistance for groups trying to assist vulnerable populations, providing rental space at the campus for groups working with financially constrained individuals (if such space became available), or(if legally permissible) direct funding or contributions to groups that do so. 7. Wait for a State (or Federally) mandated program The State of California is in the final stages of developing a drinking water customer assistance program. It will have a specified eligibility, funding mechanism, and funding distribution approach. The same may at some point be extended to wastewater. Central San could defer significant investment in creating a program and wait for the State to develop such programs. Similarly, there has been Federal legislation introduced recently(which did not pass)to establish similar national assistance programs. Another possibility was also discussed internally but is viewed as not generally practicable for various reasons. It is mentioned below to indicate to the Board that staff has considered the broadest range of potential alternatives: 8. Tiered Rate Structure Today's SSC is a flat fee based on Central San's cost of service study with assumptions for household density and average flows for single family and multi-family residences.A tiered rate structure could be set up with lower rates for either small households or low flow households. This option could be costly to administer, would not necessarily be confined to low-income or residents in need of assistance and could result in higher rates for low income families with multiple dependents. This option would also require a revised cost of service study and more staff time for administration in certifying household size and pulling residential water data. ALTERNATIVES/CONSIDERATIONS The characteristics of customers who would be eligible for bill assistance would need to be determined. Potential eligibility requirements include one or more of the following: (1) low-income households; (2) households in crisis (due to an emergency or change in circumstance); (3) senior citizens; and (4) disabled individuals. Many utilities with customer assistance programs rely on the determinations made by others (utilities, or participation in government assistance programs), while some take on screening responsibilities. The type of customer assistance program would need to be agreed to. The extent of Central San's involvement (administrative effort, financial support, etc.) associated with the alternatives presented would October 15, 2019 Special ADMIN Committee Meeting Agenda Packet- Page 22 of 45 Page 5 of 25 vary significantly. The involvement of Central San in qualifying customers for eligibility would also need to be specified. The cost implications would depend on the selected eligibility requirements, assumed participation rates of the eligible population and, for discount programs, the size of the discount offered. A table is contained in Attachment 2 for the SSC discount program indicating that revenue loss could be up to $4 million for a 50% discount for customers at 150% of the federal poverty level, for owner-occupied properties. Designing and extending a program further to also benefit renter occupied properties would have a higher revenue loss impact. Additional analysis would be conducted if the Board provides initial feedback regarding supporting the further development of one or more such alternatives. FINANCIAL IMPACTS The financial impacts to Central San would depend on the program design. No specific program is being recommended at this time, though "what-if' analysis for a SSC discount program has been undertaken and the results are shown in Attachment 2. The direct cost of the discount program would be $2.8 million annually at a commonly seen discount level of 35% (EBMUD and SFPUC) , covering households at 150% of the federal poverty guideline. If limited to low-income seniors, the cost would be an estimated $700,980, while if it covered all all low-income customers, the cost would be $2.8 million assuming 100% of eligible households participated. Full cost implications would include the actual funding for a discount or other program, and administration costs for the program. Further financial impact analysis will be developed if the Board directs staff to further pursue a particular program alternative. COMMITTEE RECOMMENDATION This matter was reviewed by the Administration Committee on October 15, 2019. The Committee provided feedback to staff RECOMMENDED BOARD ACTION Provide staff with feedback on whether to proceed with further specification of a customer assistance program along the lines of one of the alternatives discussed here, another program, or take no further action at this time. Strategic Plan Tie-In GOAL ONE: Provide Exceptional Customer Service Strategy 1 - Build external customer relationships and awareness, Strategy 3- Maintain a strong reputation in the community ATTACHMENTS: 1. Customer Assistance Program-Survey 2. Customer Assistance Program Alternatives 3. Presentation October 15, 2019 Special ADMIN Committee Meeting Agenda Packet- Page 23 of 45 Page 6 of 25 Attachment 1 Customer Assistance Program Material Who has them? About 30% of large utilities per EPA: Table 1.Customer Assistance Programs Offered by U.S.Drinking Water and Wastewater Utilities Number of Utilities Total Number of Type of Drinking Water and Wastewater Number of Utilities Found to Have One Programs' Identified Utilities Reviewed Reviewed or More Programs During Review Large Utilities (>1D0,000 people) 620 190 (30.6%) 308(84.4%) Medium Utilities(10,000-100,000 people) 175 38 (21.7%) 57 (15,6%) 1 Of 795 utilities reviewed,228 utilities offer a total of 355 CAPS. 1 October 15, 2019 Special ADMIN Committee Meeting Agenda Packet- Page 24 of 45 Page 7 of 25 In California, which water utilities have them? Yype n#pregam popldatm . TB pparary lYatar Type of Utlrity Name of URIHy/Ayeaq Sowed 11410lsceunt :Floxiele Terms Lifeline Bate ASSIStwee aktency enuf0 nia East Say Municipal U91ity District 35%sewer discount 1,400,000 • r Golden State Water Carnpaily.Contral Basin East 44.41% • in1. Golden State Water Compaq.soutflwesl 169173 • ;i�n� Califormai water Semwa Satcersfietd 246,371 • ;n California Water Service,Bear Gukh 58242 • • Santa Clara Valley WaterDistdct 30%sewer discount 2,000,00D • califw.a Water Semce.Chico 100.435 • Ib City of Chula%rim.Pubic ttrouDeitartment 30%sewer discount 173,55fi ■ Costa Mesa sanitary nisuict Other(see below) 112.900 ■ ElGolden State Water Company,Moemia 114,016 ■ 0 CafitermaWak%r Service,Domingvlet 144.052 • • 0 Califond8 Water Service,East Los Angeles MAW ■ • E1 Dorado Irrrsaiion[h5t!Ct $12.50 discount per month wastewater q112AD0 • 1for low income in Elk Grove Water District 36,0 00 • San Gabriel Valley Water Company,Fontana 209.035 ■ ;n K" GlendaleWatee&Pawef 515 off electric bill 201,893 ■ Caaforrda Water Service,Hefmm R¢dondo 95,650 • • v 19 City o!Hunpngtan Beach 201400 ■ California Water Service,NO City 14.441 ■ aj ISacramento County Water Agency 148.814 ■ inCa@orrda Water Service.Livermore 56,70D ■ ■ 2 October 15, 2019 Special ADMIN Committee Meeting Agenda Packet- Page 25 of 45 Page 8 of 25 Papubdien 7004 ary Water Type m Utility Race of EltlRly/Amoy served BIII Diarnust Flsnlbk firma L3fellne Rah Rsalstonee OiiNency California Water Service,Marysville 12,017 i City of Modesto 25%low income/Sr.discount,or$15 monthly 212,000 i California American Water,Monterey 96,754 i • Nape Sanitation Disuict 28%sewer discount 75,000 i L palmdale Water District 50%of monthly charge 115,000 i © City of Palo AltoUtEitles 25%gas/elect,20%storm drain 218,905 • • inCalifornia Water Service,Palos Verdes 69,883 i i Cucamonga Valley Water District $10/month discount on water/wastewater 182.586 i Riverside Public Utilities $27 annual water discount,$168 electric 303.971 i i Western Municipal Water District Up to$150 annually off water/sewer 8[ID_OOU i �J City of Sacramento Up to$380 annual discount on 486.189 i water,sewer,garbage Sacra memm County Regional Sanitation District 90- 150 sewer iscount 1.475,377 • L California Water Service,Salinas I17,681 • California Water Service,8ayshore 102.893 i i �J California American Water,Coronado 96,754 i i ® San Francisco Water,Power,and Sewer 35%sewer discount 2,600,000 • L San Jose Water Company 15%water discount 998•000 • Suburban water Systems,San Jose Ifills 300r00o • L City of Santa Ana Low income exemption from 5,5%utility tax 353.428 i California Water Service,Selma 24,480 i Golden State Water Company,Simi Valley 13,30D i raw of Issoxmin PapulnKna Temparary Water Ty"of Utility Race ul UURLy/Agency served BIII Discount Flexible Terms f3felina Rate Assistance Efficiency California Water Service,StockLon 185,346 • • Torrance Municipal Water Department 105,000 i Valencia Water Company IL&,361 i Vallejo Sanitation&Flood Connm]Dist ict 10%sewer discount 119,794 • yii■ California Water Service,Visalia 132.158 • • California Water Service,Westlake 19,434 Others: Marin-Sausilito Sanitary District 5%sewer discount City of Long Beach Exemption from 5%utility tax Costa Mesa Sanitary District Sewer Lateral Repair/Maintenance Assistance,and rents space to low income assistance organization City of Vacaville 1 $4 monthly water discount ► Contra Costa Water District 50%for daily service and demand charges for low income& disabled/senior 3 October 15, 2019 Special ADMIN Committee Meeting Agenda Packet- Page 26 of 45 Page 9 of 25 Attachment 2 Range of Alternatives for Central San Customer Assistance Programs (Supplemental Information) 1. SSC Discount program (Paid by other funding sources) Description: A lower SSC is billed through the tax roll, or the normal amount is billed,then is "paid/credited" with other Central San revenues. Certain other California sewer service provider have discounts ranging from 5% (Sausalito-Marin City SD)to 35% (EBMUD, SFPUC). These agencies discount programs have varying characteristics beyond the discount amount including: • Funding amount: many agencies limit the amount of funding dedicated to the program; once the funding is utilized, the program is closed for the year. • Funding source: Cities sometimes use general fund revenues. Special purpose entities may use various types of non-rate revenue. • Eligibility criteria: Some agencies provide for all eligible low income customers. Some further limit to low income and senior or disabled. • Eligibility screening: Some agencies screen in house, others rely on customer participation in another income eligible program such as PG&E CARE, or a State (CalFresh) or Federal (Medicaid) means tested program. Potential Funding sources: • Non-Sewer service charge revenues such as Ad Valorem tax: $17.5 million in FY 2019-20 (of which $3 million is dedicated to debt service and the rest directed to CIP funding); Interest Income $2,085,900; Lease revenue $703,000. Other agency examples: Example: City of Vacaville-"The low income discount is funded by revenues not collected through water rates in accordance with State of California regulations. In the event this funding runs out before the end of the fiscal year(June 30),the program will be temporarily suspended until the start of the following fiscal year(July 1)when funding is approved. " Example: Cucamonga Valley Water District-"The Customer Assistance Program (CAP)assists eligible low-income households with their water utility costs.The CAP is not subsidized by other ratepayers; instead,the District has funded this program from unrestricted rental income that the District receives every month through the rental of cellular tower space." Concerns: • The District's legal counsel will provide commentary on potential proposition 218 issues. 1 October 15, 2019 Special ADMIN Committee Meeting Agenda Packet- Page 27 of 45 Page 10 of 25 Financial and Other Analysis: Based on federal demographic and economic estimates relevant to Central San's service area, staff estimates that 9,173 owner occupied households in the service area currently receive some type of financial assistance due to low-income status (Supplemental Security Income, SNAP, other cash assistance) and that 13,458 owner occupied households have an annual household income below 150%of current federal poverty guidelines. As noted,these figures and the subsequent analysis reflect, not rented properties. If a discount program were structured in a manner to extend a SSC discount to renter occupied properties, the revenue loss impact would be higher. For comparison,the following chart is included to illustrate the current federal poverty guidelines for given household sizes at varying multiples of the poverty level. Additionally, the eligibility criteria (maximum household income)for select local, state, and federal assistance programs are provided as examples of some current household income eligibility levels. Size of Percent of Federal Poverty Guideline House- hold 100% 130% 133% 135% 138% 150% 200% 1 $12,490 $16,237 $16,612 $16,862 $17,236 $18,735 $24,980 2 $16,910 $21,983 $22,490 $22,829 $23,336 $25,365 $33,820 3 $21,330 $27,729 $28,369 $28,796 $29,435 $31,995 $42,660 4 $25,750 $33,475 $34,248 $34,763 $35,535 $38,625 $51,500 5 $30,170 $39,221 $40,126 $40,730 $41,635 $45,255 $60,340 6 $34,590 $44,967 $46,005 $46,697 $47,734 $51,885 $69,180 7 $39,010 $50,713 $51,883 $52,664 $53,834 $58,515 $78,020 8 $43,430 $56,459 $57,762 $58,631 $59,933 $65,145 $86,860 Maximum household income (relative to poverty guideline)for select assistance program eligibility: • Supplemental Nutrition Assistance (SNAP): 130% • Affordable Care Act(ACA) Medicaid Expansion: 133% • Medicaid Low Income Subsidy: 135% • Lifeline Program ($9.25+ phone service discount): 135% • Medicaid/Children's Health Insurance Program (CHIP): 138% • Low Income Energy Assistance (LIHEAP): 150% • PG&E California Alternate Rates for Energy (CARE) (30-35%off electric and gas): 200% The revenue impact to Central San of developing a low-income assistance program for its rate payers is primarily dependent on two factors: (1) the number of participating households and (2)the size of the discount offered. Based on current Sewer Service Charge (SSC) rates,for every 1%of discount offered the District would need to offset$6 for each household receiving the discount. The following table illustrates those required offsets with separate options based on (1) age of the householder, (2) household current assistance status, (3) household income, and (4) possible discount 2 October 15, 2019 Special ADMIN Committee Meeting Agenda Packet- Page 28 of 45 Page 11 of 25 rates. The participation rate in these scenarios is assumed to be 100%, although a lower participation rate is more likely. 1-Year Financial Impact Households Currently Receiving Assistance Discounted Food Stamps/SNAP,SSI,Cash Public Households at<150%of Poverty Discount SSC Assistance Rate (FY2019-20) <65 65+ <65 65+ years old years old Total years old years old Total 5% $568 $184,080 $91,110 $275,190 $302,340 $101,400 $403,740 10% $538 $368,160 $182,220 $550,380 $604,680 $202,800 $807,480 15% $508 $552,240 $273,330 $825,570 $907,020 $304,200 $1,211,220 20% $478 $736,320 $364,440 $1,100,760 $1,209,360 $405,600 $1,614,960 25% $449 $920,400 $455,550 $1,375,950 $1,511,700 $507,000 $2,018,700 30% $419 $1,104,480 $546,660 $1,651,140 $1,814,040 $608,400 $2,422,440 35% $389 $1,288,560 $637,770 $1,926,330 $2,116,380 $709,800 $2,826,180 50% $299 $1,840,800 $911,100 $2,751,900 $3,023,400 $1,014,000 $4,037,400 As an example, if the District were to implement a (a) 35% discount to households where (b)the owner/occupant is 65 years of age or older with (c) household income less than 150%of the federal poverty guideline,the required revenue offset at 100% participation is estimated to be$709,800. Note that the cost for households "Currently Receiving Assistance" is lower than the threshold at 150%of Poverty level as it counts only households receiving either(1)food stamps/SNAP, (2) Supplemental Security Income (SSI), and (3) "cash public assistance". If the threshold was set at a higher income level such as those households participating in the PG&E CARE program (with incomes up to 200%of the federal poverty level), the financial impact to Central San for a given discount level would be higher. In addition to the required revenue offset,there would also be an administrative burden involved in establishing the program, conducting outreach to the current customer base, and determining/re- verifying program eligibility. These costs have not yet been determined as they are likely to vary greatly depending on the program alternative selected. To minimize the costs of the latter, relying on customers to demonstrate that they are participating in another income-qualified program would be preferred. 3 October 15, 2019 Special ADMIN Committee Meeting Agenda Packet- Page 29 of 45 Page 12 of 25 2a. Existing Program-State Controller property tax postponement program Described in Position Paper. Some additional detail from the State's website is below. Property Tax Postponement Program The State,through the State Controller's Office,offers a Property Tax Postponement Program which allows homeowners who are seniors,are blind,or have a disability to defer current-year property taxes on their principal residence if they meet certain criteria including 40 percent equity in the home and an annual household income of$35,500 or less. https://www.sco.ca.gov/Files-ARD-Tax-Info/2018- 19%20PTP%20Application%20and%201nstructions.pdf To qualify,you must meet all of the following criteria for every year in which postponement of property taxes is desired: • Be at least 62 years of age, or blind,or disabled; • Own and occupy the real property as your principal place of residence(mobile, manufactured,or modular homes,whether affixed or unaffixed;floating homes;and house boats are not eligible); • Have a total household income of$35,500 or less; • Have at least 40 percent equity in the property;and • Not have a reverse mortgage on the property. The interest rate for all taxes postponed under the PTP program is 7 percent per year. Interest on postponed property taxes is computed each month on a simple interest basis. Interest on the postponement account continues to accrue until all postponed property taxes plus interest are repaid to the State. Notice of Lien for Postponed Property Taxes To secure repayment of the postponed property taxes,SCO places a lien against the property. The lien remains in effect until the account is paid in full.A one-time recording fee will be added to your account to release the lien once the account is paid in full. Postponed property taxes and interest become immediately due and payable when you do any of the following: • Move from the property; •Sell or convey title of the property; • Die and do not have a spouse, registered domestic partner,or other qualified individual who continues to reside at the property; •Allow future property taxes or other senior liens to become delinquent;or • Refinance or obtain a reverse mortgage for the property. No repayment is required until one of the above events takes place. Requirements are subject to change without notice if the law is revised. 2b. Deferral program (Central San Administered) Described in Position Paper. Example of an alternative/deferred billing arrangement- EBMUD has a program aimed at multi- family residential buildings to keep the water flowing even though the owner hasn't paid the 4 October 15, 2019 Special ADMIN Committee Meeting Agenda Packet- Page 30 of 45 Page 13 of 25 water bill. This resulted from 2010 legislation (SB1035) applicable to Municipal Utility Districts which allows liens on residential real property for delinquent water and wastewater charges. This authority gives the EBMUD an alternative to terminating service as a method of collecting revenue. 3. Third Party Assistance-Central San Referral to Reverse Mortgage provider. Described in Position Paper. 4. Third-party charitable organization pays the bill on behalf of the customer. Described in Position Paper. Additional examples of such programs, or entities assisting in the development of such programs is shown below. Example-"Dollar Energy Fund is a 501(c)(3)organization whose mission is to improve the quality of life for households experiencing hardships by providing utility assistance and other services that lead to self-sufficiency. For more than 36 years,we've served the limited-income community by providing$152 million in utility assistance grants to more than 550,000 limited-income families and individuals. Hundreds of modest programs from across the country rely on charitable donations or bill round-ups, but relatively few programs have been designed on a significant enough scale to help all their customers who are likely to need financial help on a long-term basis." Example: Project A.P.P.L.E. (Assisting Pasadena People with Limited Emergencies) is a donation-funded program that provides a one-time credit of up to$100 per year to help eligible low-income residential PWP electric customers keep their lights on. This program is made possible through the voluntary contributions of the business community, utility customers and city employees,who contribute through Paypal,check or on the utility bill. Example: EBMUD partners with several agencies and provides referrals to such agencies: Other agencies that can help 41 L3 Sometimes, even after EBMUD has done all it can do to EBMUD help,a customer still needs help with their bill.That is p where our agency partnerships step in. •Dial 2-1-1 for California's 24-hour Hotline For Hcalth and Human Services •Salvation Army 510-645-97I0 •Seasons of Sharing Alameda County 510-272-3700 Contra Costa County 925-521-5065 •St.Vincent❑ePaul 510-638-7000 5 October 15, 2019 Special ADMIN Committee Meeting Agenda Packet- Page 31 of 45 Page 14 of 25 S. Customer funded "from the heart" contribution program. Described in Position Paper. Examples: • Riverside Public Utilities (RPU) established the Sharing Households Assist Riverside's Energy program (SHARE) in 1989 to provide low-income residents with utility bill assistance. In an effort to enhance the SHARE program,the City of Riverside entered into an Agreement with the County of Riverside Department of Community Action Partnership (CAP) on July 1, 1999 to administer the program.The program has effectively assisted over 95,000 low-income residential customers. Funded by one time, ongoing or round-up donations on monthly bills. • LADWP. Project Angel Program--United Way program funded with Customers and City employee donations. Serving our Seniors-Identify& assist seniors to plug into available programs. 6. Targeted Partnerships with or Assistance to Organizations Supporting the Financial Constrained Described in Position Paper. Examples: • Los Angeles Department of Sanitation provides free dumping of RV waste for the homeless individuals living in RVs throughout the city, and to prevent inappropriate dumping of this waste on streets in the city. • An organization operating in the Central San service territory has requested assistance in disposing of the wastewater from mobile showers for the homeless;this issue is being worked on presently; but more initiatives of this nature could be supported. • News story--"The Costa Mesa Sanitary District has opened its doors to a nonprofit serving Orange County's low-income residents — agreeing to lease part of its headquarters to the organization-Second Chance Orange County, according to district general manager Scott Carroll. "When we bought this building, we wanted to benefit the community, and Deb Johnson's organization does that," Carroll said, referring to the organization's founder and executive director. "Their mission statement is to get people a second chance to be contributors to society. ...That helps keep people off the streets of Costa Mesa. So there's definitely a nexus of why we would want to partner with her."The nonprofit will pay the district$530 a month to rent two previously vacant offices totaling 252 square feet, according to Carroll.The arrangement is on a month-to-month basis. Second Chance helps "low-income individuals recovering from drug/alcohol addiction or experiencing homelessness adjust back into society" by"providing free job skills training, interview skills, one-on-one coaching, mentoring and job placement." • Some utilities provide grants or other support of community organizations deemed worthy of support. As an example of a current pending matter, Central San staff submitted a recommendation to the Admin Committee/Board for Central San to pay the 6 October 15, 2019 Special ADMIN Committee Meeting Agenda Packet- Page 32 of 45 Page 15 of 25 administrative costs related to employee charitable donations made through the workplace giving program. This would encourage further charitable giving by employees for organizations that include supporting local financially constrained persons. 7. Wait for a State (or Federally) Mandated Program Described in Position Paper. Legislation was introduced at the Federal level to assist with water and sewer affordability(Water Affordability Act of 2018-5.3015; which would have awarded grants to public water utility companies through a pilot program "Low Income Sewer and Water Assistance Program". This bill did not proceed last year, but similar legislation could be introduced and proceed in the future. The following programs were briefly explored internally, but are not viewed as viable due to a range of complications. 8. Tiered Rate Structure Described in Position Paper. 7 October 15, 2019 Special ADMIN Committee Meeting Agenda Packet- Page 33 of 45 Page 16 of 25 Summary of Potential Customer Assistance Programs Alternative Admin Funding Legality Flexibility County Other Effort/Cost Availability Involvement 1. SSC Discount Medium Good Workable High No Navigate Prop 218 issues 2a. Property Tax Minimal Good Yes Specified No Deferral-State by State Controller 2b. Central San Medium Good Workable High Yes Cost/funding Administered source Deferral Program 3. Referral to None Good Yes Specified No Reverse Mortgage by Providers Providers 4.Third party Minimal Minimal Yes Specified No assistance programs by Providers 5. Customer Funded Low/ Minimal Yes Good No Better for Assistance Programs Medium temporary issues 6. Partnerships with Low/ Good Yes Yes No Organizations Medium 7. Wait for State or None Likely Good Yes Would be To be Federal Program specified determined State/ Federal G ovt 8 October 15, 2019 Special ADMIN Committee Meeting Agenda Packet- Page 34 of 45 v ATTACHMENT CUSTOMER ASSISTANCE PROGRAM r A ALTERNATIVES r. Phil Leiber r_F_ Administration Committee August 20, 2019 �C 1111 f i bMd6Ad6iw 1�y I - October 15, ADMIN C r WHY CONSIDER A CUSTOMER ASSISTANCE PROGRAM? • Request to consider such programs raised at 4/18/2019 Board meeting • 30% of large utilities serving over 100,000 customers have some type of assistance program • Utility rates have increased at a pace above the CPI . • Certain Central San customers have inquired about the availability of customer assistance programs • State moving toward "Low-Income Water Rate Assistance Program" • Need in Service territory---5.2% for individuals in the Central San service territory excluding wholesale areas of Clayton/Concord (or 7.4% including those areas as well). 9, 173 households receive mmeans tested financial assistance. 2 _ I TYPES OF CUSTOMER ASSISTANCE PROGRAMS PER EPA 1 . Bill Discount- A long-term reduced bill. 2. Flexible Terms-Help customers stay current with bills by waiving penalties, fees, interest, and/or changing how they are billed over time (Not relevant to Central San billing model). 3. Lifeline Rate (Subsidized rate for basic allotment) . 4. Temporary Assistance (short-term or one-time basis to prevent disconnection of service or restore service after disconnection for households facing an unexpected hardship); 3 I ISSUES To ADDRESS • Funding sources and availability given Proposition 218 constraints • Eligibility definitions and administration issues; potentials recipients include one or move of the following: - Low-income households - Households in crisis (due to an emergency/change in circumstances). - Senior citizens - Disabled individuals. - Program set-up and administration costs - Timing 4 21xhhom ,,r. . . NLTERNATIVES "ANEW 1. Sewer Service Charge (SSC) Discount program • Lower SSC is billed on the tax roll. • Discounts elsewhere range from 5% (Marin Sausalito SD) to 35% (EBMUD and SF PUD). • The funding source could be other revenue sources not subject to Proposition 218 requirements . • Variations possible such as for building owners providing housing to qualified low-income renters, or other housing providers such as homeless shelters. 2a. State Controller property tax postponement program • Existing state program that allows eligible property owners to defer payment of their property tax. • Must be lower income (less than $35,500 in 2017) and one of the following: (1) 62 or older, (2) blind or (3) disabled. • The deferred amount builds up over time, constitutes a lien against property, and bears interest at a 7% rate. • Central San could inform customers via the webpage and newsletter or upon inquiry about assistance programs. 2b. Deferral program (Central San Administered) • Like 2a above, but administered by Central San. • Could have broader eligibility. • Deferred amount builds up over time, constitutes a lien against the property, interest assessed like AVAD program. • Funding source in a given year could be ad valorem taxes or borrowing. :4 Over time, the program would be expected to be essentially revenue neutral. %LTERNATIVES T __qW - 3. Third Party Assistance-Central San Referral to Reverse Mortgage provider. • Central San would continue to bill the standard SSC. • The customer would use proceeds from the reverse mortgage to pay their property tax bill including the sewer service charge. • While not a broad customer assistance program, this could be of benefit certain individuals. 4. Third-party charitable organization pays the bill on behalf of the customer. • Financially constrained customers are referred to a third party which provides funding to pay their utility bill. • More useful for temporary financial constraints, and monthly utility bills. S. Customer funded contribution program. • Solicit Central San's customers to fund a program to help their neighbors who need temporary or ongoing assistance in paying the SSC. • Communications method—Pipeline. A typical "bill insert" or check-off on bill form not applicable. • Limited funding available. 6CENTRALSAN ' .. • • K--. f .. NLTERNATIVES T --qw 6. Targeted Partnerships with or Assistance to Organizations Supporting the Needy • Partner with or support organizations that assist the needy • Could be in addition to or in lieu of direct assistance (such as bill discounts) to needy individuals. • Possibilities include providing wastewater related assistance for groups trying to assist vulnerable populations, providing rental space at the campus for groups assisting financially constrained persons, or direct funding or contributions to groups that do so. 7. Wait for a State (Or Federally) Mandated Program • The State of California is in the final stages of developing a drinking water customer assistance program. • Will have specified eligibility, funding mechanism, and funding distribution approach. • Could eventually be extended to wastewater. • Similarly, there has been Federal legislation introduced recently (which did not pass) to establish similar national assistance programs. F !! 7 I CENTRAL SAN SUMMARY Alternative Admin Funding Legality Flexibility County nt Other Effort/Cost Availability Involveme 1. SSC DiscountMedium Good Workable High No Navigate Prop 218 issues 2a.Property Tax Deferral- Minimal Good Yes Specified State ControllerState 2b. OM ITM. Medium Good Workable High Yes Cost/funding Administered Deferralsource Program 3. Referral to ReverseNone Good Yes Specified by • Mortgage ProvidersProviders 4.Third party assistanceMinimal Minimal Yes Specified by • programsProviders 5.Customer Funded •w/ Minimal Yes Good No Better for Assistance ProgramsMedium temporary 6. Partnerships with •w/ Good Yes Yes No OrganizationsMedium Ik 7.Wait for State or FederalNone Likely Good Yes Would •- To •- determined Programspecified Federal Govt S4 � S _ cC lop; + ..__....__._......_----..........E-Ma.�il Training Novemb�....___._.�.._..__. er 8, 2ors—..�_ s' 8 CENTRAL SAN Slide e FEEDBACK REQUESTED A. Should staff further develop any of the above options? B. If so, what should program parameters be? C. Any additional information needed for consideration? 9 _ �