REPORT TO THE CITY COUNCIL
FROM: BROCK D. BUCHE, PE, PLS, Interim Director
Department of Public Utilities
BY: BUD TICKEL, Assistant Director - Water
Department of Public Utilities, Water Division
HENRY MCLAUGHLIN, Business Manager
Department of Public Utilities - Water Division
SUBJECT
Title
***RESOLUTION - Authorizing the Department of Public Utilities to enroll and participate in the California Low-Income Household Water Assistance Program (Subject to Mayor’s Veto)
Body
RECOMMENDATION
Staff recommends that City Council adopt a resolution authorizing the Department of Public Utilities (DPU) to enroll and participate in the California Low-Income Household Water Assistance Program (LIHWAP); and authorize the Director of Public Utilities, or designee, to sign and file any and all documents necessary to receive payments from the California Department of Community Services and Development (CSD) and its third-party funds disbursement partner, HORNE, LLP, for the purpose of applying credits to specified low-income customer accounts on behalf of the City of Fresno (City).
EXECUTIVE SUMMARY
LIHWAP is a one-time federally funded relief program to provide financial assistance to low-income residential water and wastewater customers to reduce water and wastewater arrearages. The funding source for this program is the State of California’s share of federal Consolidated Appropriations Act and American Rescue Plan Act (ARPA) funds appropriated to LIWHAP. At the state level, the program is administered by the California Department of Community Services and Development (CSD). A Local Service Provider (LSP) will administer the program at the local level including customer outreach, intake, eligibility verification, and identification of the LIHWAP credit amount.
The funding provided through LIHWAP complements the aid provided through the California Water and Wastewater Arrearage Payment Program (CWWAPP) by offering assistance to eligible low-income households continuing to experience difficulty making payments for residential water and wastewater services. A one-time payment of up to $2,000 will be applied to eligible low-income residential water and/or wastewater charges. CSD anticipates the LSP will begin accepting customer applications no later than June 2022, and LIHWAP will operate through August 31, 2023. HORNE, LLP, CSD’s third party disbursement partner, will issue LIHWAP financial assistance payments directly to water systems. In order for City of Fresno water and wastewater customers to participate, the city must enroll in the program and sign a Direct Payment Agreement with HORNE, LLP.
BACKGROUND
LIHWAP is a one-time, federally funded relief program that provides financial assistance to low-income customers who have struggled to make water and/or wastewater payments prior to and during the COVID-19 pandemic. The program will help residents manage their residential water and/or wastewater costs and reduce past due balances through a one-time payment of up to $2,000 for eligible households.
On December 27, 2020, the Consolidated Appropriations Act was signed into law and appropriated $638 million to the LIHWAP. Additionally, on March 11, 2021, the American Rescue Plan Act appropriated $500 million to LIHWAP. From this one-time funding, $116 million has been allocated to California. LIHWAP is administered at the federal level by the U.S. Department of Health and Human Services and at the state level by the California Department of Community Services and Development (CSD).
Consistent with federal and state directives for prioritizing the use of LIHWAP funds to water and wastewater arrearages, CSD has modeled the LIHWAP program as an arrearage response program. LIHWAP assistance payments will be used to pay water and/or wastewater arrearages on a first-come, first-served basis to eligible households. Assistance may be applied to water and/or wastewater debt to ensure households maintain access to clean, safe drinking water and wastewater services.
The federal funding provided under LIHWAP will complement the aid disbursed through the California Water and Wastewater Arrearage Payment Program (CWWAPP), which addressed residential customer water and wastewater debt during the pandemic relief period of March 4, 2020 to June 15, 2021. Credits totaling $3.5 million were applied to water customer accounts in February 2022. The payment program for wastewater customers is in progress. An application to participate in the wastewater program was submitted on March 28, 2022, with funding requested of approximately $2.0 million which will be applied to eligible residential and commercial wastewater customer accounts once received.
Finally, LIHWAP will help further reduce the accounts receivable amounts for the Water and Wastewater Enterprise funds and provide additional revenues for operations and maintenance of water and wastewater systems.
Customer Eligibility
Eligible households must be residential water and/or wastewater customers with a total household income at or below 60% State Median Income (SMI) or a household member must currently be a recipient of the Low-Income Household Energy Assistance Program, CalFresh, or CalWORKs. Customers must provide proof of a past-due water and/or wastewater bill and the arrearage may accrue during any time period.
Program Implementation
CSD has contracted with Local Service Providers (LSPs), made up of nonprofit and local government agencies, such as the Fresno Economic Opportunities Commission, to administer the program at the local level including customer outreach, intake, eligibility verification, and identification of the LIHWAP credit amount. Low-income households will apply for services directly through the LSP. The LSP serving Fresno is the Fresno County Economic Opportunities Commission. LSPs will begin accepting applications from customers by May 2022 and no later than June 2022. The program will operate through August 31, 2023.
CSD’s third-party funds disbursement partner, HORNE, LLP, will disburse direct payments to water systems to apply the LIHWAP credits to households determined to be eligible for LIHWAP assistance by the LSPs. Water systems must enroll in the direct payment program to be eligible to accept the LIHWAP payments on behalf of eligible households. The City of Fresno must therefore enter in a Direct Payment Agreement (DPA) with HORNE, LLP for eligible customers to benefit from the LIHWAP.
LIHWAP program guidelines say the water system enrollments are due April 30, 2022, but upon inquiry with the CSD, DPU has received confirmation that enrollment applications would still be accepted after that date. It is imperative that City Council adopt the resolution authorizing DPU’s enrollment in the LIHWAP program as soon as possible for DPU to complete enrollment in the program at the earliest possible opportunity and avoid any delays in disbursement of funds for eligible households.
The Resolution authorizing DPU to enroll and participate in the LIHWAP has been approved as to form by the City Attorney’s Office. Adoption of this Resolution and authorization for the Director of Public Utilities, or designee, to sign and file all documents necessary to receive payments is necessary to proceed.
ENVIRONMENTAL FINDINGS
Pursuant to the definition provided in the California Environmental Quality Act (CEQA) Guidelines Section 15378, this activity is not a “project.”
LOCAL PREFERENCE
Local preference was not implemented, as this item does not include a bid or award of a construction or services contract.
FISCAL IMPACT
Acceptance of LIHWAP funds will not impact the General Fund. The funds received will be used to reduce or eliminate past due balances on residential water and wastewater customer accounts. This will reduce accounts receivables and the potential of bad debt incurred by the Water and Wastewater Enterprise funds. All payments will be deposited in the Water Enterprise Fund (40101) and Wastewater Fund (40501). The amounts received are dependent on how many customers sign up and are approved for the program.
Attachments:
Attachment 1 - Resolution
Attachment 2 - Direct Payment Agreement