HomeMy WebLinkAboutItem 3 - Introduce an Ordinance amending Chapter 13.04 (Water Service)
Department Name: Utilities
Cost Center: 6105
For Agenda of: February 4, 2020
Placement: Consent
Estimated Time: N/A
FROM: Aaron Floyd, Utilities Director
Prepared By: Jennifer Thompson, Utilities Business Manager
SUBJECT: INTRODUCE AN ORDINANCE AMENDING SECTIONS 13.04.060 AND
13.04.110 OF MUNICIPAL CODE CHAPTER 13.04 (WATER SERVICE) AND
ADOPT A DISCONTINUATION OF RESIDENTIAL WATER SERVICE FOR
NON-PAYMENT POLICY AND ESTABLISH A RECONNECTION FEE
RECOMMENDATION
1. Introduce an Ordinance amending Chapter 13.04 of the City of San Luis Obispo Municipal
Code to comply with Senate Bill 998 (Attachment A); and
2. Adopt a Resolution of the City Council of the City of San Luis Obispo establishing a
Discontinuation of Residential Water Service Policy (Attachment B); and
3. Adopt a Resolution of the City Council of the City of San Luis Obispo establishing a
Reconnection Fee for households demonstrating income less than 200-percent of the Federal
Poverty Line (Attachment C).
REPORT IN BRIEF
In September 2018, Governor Brown signed Senate Bill 998 (SB 998) which requires additional
rules and procedures before residential water service can be turned off for non-payment. SB 998
requires cities and other agencies who provide water service to adopt a written “Discontinuation
of Residential Water Service” policy that complies with the new law. In addition, the San Luis
Obispo Municipal Code conflicts with SB 998 so the applicable ordinances must be amended.
DISCUSSION
Background
The City provides water service to approximately 15,600 customers. It is common practice
amongst water providers to discontinue (turn-off) a customer’s water service when the
customer’s bill becomes delinquent. The customers are charged a fee and required to pay their
delinquent balance to restore service. The fee recovers the cost to turn the water off and to turn
the water back on when the customers have paid their delinquent bill. Current State law, even
prior to implementation of SB 998 discussed below, requires water providers to notify residential
customers prior to discontinuing service for non-payment. It has been the City’s policy and
practice to discontinue water service for delinquent bills1, to charge a fee before the service is
restored2, and to comply with State notification requirements.
1 San Luis Obispo, Municipal Code 13.04.060 A. 1
2 San Luis Obispo, Municipal Code 13.04.060 G
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Senate Bill 998
The Water Shutoff Protection Act, Senate Bill 998 (SB 998) implements additional rules and
requires procedures before residential water service can be discontinued for non-payment and is
intended to minimize the number of Californians who have their water service interrupted due to
their inability to pay. The requirements, effective February 1, 2020 under SB 998 are:
1. Notification Requirements
a. The City shall adopt a written policy on discontinuation for nonpayment available in
English, Spanish, Chinese, Tagalog, Vietnamese, Korean, and any other language spoken
by 10 percent or more of the City’s population. The policy must be posted on the City’s
website and be available in writing upon request.
b. The policy shall include the following information:
i. A plan for deferred or reduced payments;
ii. Alternative payment schedules;
iii. A formal mechanism for a customer to contest or appeal a bill;
iv. A telephone number for a customer to contact to discuss options for averting
discontinuation of residential service for nonpayment.
c. No less than seven business days before discontinuation of service, the City shall contact
the customer named on the account by telephone or written notice.
d. The City shall provide to the customer information on how to restore service.
2. Timing Requirements
a. Residential service shall not be discontinued for non-payment until the payment has been
delinquent for at least 60 days.
3. Protections for Non-Customer Occupants
a. If the customer’s mailing address is not the property address to which the service is
provided, notice of imminent discontinuation shall also be sent to the address of the
property.
b. If the landlord is the customer on record, the City shall make every good faith effort to
inform residential occupants, by written notice, when the account is in arrears that service
will be terminated at least 10 days prior to termination.
4. Protections for Households Who are Financially Unable to Pay
a. Water service shall not be discontinued if all the following are met:
i. The customer submits certification of a primary care provider that discontinuation
will be life threatening;
ii. The customer demonstrates they are financially unable to pay; and
iii. The customer is willing to enter into an amortization agreement.
b. For customers who demonstrate a household income of less than 200-percent of the
federal poverty line (currently $50,200 for a household of four), the City shall set a
reconnection fee at $50 ($150 for after-hours service); and waive one interest charge
every 12 months.
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5. Reporting Requirements
a. The City shall report the annual number of water service discontinuations for residential
customers on the City website.
6. Other Protections
a. If the customer appeals the bill, water service shall not be discontinued while the appeal
is pending.
Proposed City Policy Changes
Although the City does not have an adopted policy consistent with SB 998, in practice the City
already includes many similar protections in its current operating procedures. Listed below are
current City policies and procedures and how they are proposed to change to comply with SB
998. The SB 998 requirements, existing City policy, and the proposed changes to existing policy
are summarized in Attachment D to this report.
1. Notification Requirements
Existing policy: The City currently provides: 1) a plan for deferred payments; 2) a formal
mechanism for a customer to contest or appeal a bill; 3) a telephone number for a customer to
discuss options to avert discontinuation; and 4) information on how to restore water service.
Customers are mailed a shut-off notice the day after they become delinquent and are called via
an automated phone system 48 hours before service is discontinued. If the phone call fails, a door
tag is left at the residence. The City will maintain these methods of notific ation, a shut off notice
and a telephone call, which comply with SB 998.
Proposed changes to policy: Staff is recommending that the Council adopt a formal
“Interruption of Residential Water Service Policy.” This policy will be translated into the SB 998
required languages and is proposed to be posted on the City’s website. The policy includes
options to pay delinquent bills to avoid discontinuation of service to include alternative payment
schedules.
2. Timing Requirements
Existing policy: Currently water service is discontinued approximately three weeks after a bill
becomes delinquent.
Changes to policy: To comply with SB 998, staff is proposing to increase the time before water
is discontinued for non-payment from three weeks to at least 60 days delinquency.
3. Protections for Non-Customer Occupants
Existing policy: Currently the City notifies occupants of pending water shut-off for non-payment
via door tag. The door tag provides the occupant 14 days advance notice that the water will be
shut-off if the delinquent bill is not paid. This policy complies with SB 998; no changes are
proposed.
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4. Protections for Households Who are Financially Unable to Pay
Existing policy: The City currently does not shut-off water if the customer submits certification
from a primary care provider that discontinuation will be life threatening. The City does not
require the additional two criteria: (1) the customer demonstrates they are financially unable to
pay; and (2) the customer is willing to enter into an amortization agreement. The City will
continue to refrain from shutting off water if a primary care provider certifies that
discontinuation of service will be life threatening without requiring a demonstration that the
customer is unable to pay and willing to enter into an amortization agreement.
Currently, all customers who are shut-off for nonpayment must pay $117 to have their water
service restored. This is a cost recovery fee for City staff to visit the service address to turn the
water off and then return to the property to turn the water back on when the customer has paid
the delinquent bill.
Changes to policy: To comply with SB 998, staff is recommending that the Council adopt
resolution “Adopting Reconnection Fee for Households Demonstrating Income Less than 200-
Percent of the Federal Poverty Line” (Attachment C) This will result in less than full cost
recovery for those customers charged the reduced reconnection fee.
5. Reporting Requirements
Existing policy: The City does not currently publish this information.
Changes to policy: To comply with SB 998, staff is recommending the City begin reporting the
annual number of service discontinuations for residential customers on the City’s website.
6. Other Protections
Existing policy: The City currently does not discontinue water service while a customer appeal
is pending so no policy change is required. 3
Impact of Changes
SB 998 is intended to minimize the number of Californians who have their water service
interrupted due to their inability to pay but may ultimately have the opposite effect. The
requirement that residential service not be discontinued for non-payment until the payment has
been delinquent for at least 60 days will extend the amount of time a customer has to pay a
delinquent bill to avoid shut off. During that extended period of time, customers will continue to
accumulate new bills and, thus, larger balances. These higher balances may cause hardship to
customers and may be more difficult for the City to collect. The requirement that customers who
demonstrate a household income of less than 200-percent of the federal poverty line pay a
reduced reconnection fee means that the City may not fully recover the cost to turn-off and turn-
on that customer’s water.
3 Utility Billing Adjustment Policy www.slocity.org/ubac
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Customer Hardship
Prolonged times of non-payment can result in larger balances, thereby resulting in an
exacerbated hardship to water service customers. Customers will be able to accumulate larger
balances making it more difficult for their accounts to become current. By the time the customer
is shut off for non-payment and compelled to pay, they will have three outstanding bills.
Currently they only have two outstanding bills when they are shut off. To help mitigate this
problem, City staff will add an additional notification to customers, between the first bill and the
shut-off notice, to ensure that customers remain aware of their total balance.
Aged Account Balances
In the delinquent bill collections field, older accounts receivables are typically more difficult to
collect. Customers who close their account will potentially have larger uncollected balances sent
to the City’s collection agency. Aged accounts receivable also have the potential to impact the
City’s credit rating because they may indicate an inability to collect payments. As a percentage
of all customers, the City shuts-off an average of 40 customers per month for non-payment. This
is only 0.25 percent of all customers; hence staff estimates that aged account balances will not
rise to this level.
Cost Recovery
The reconnection fee is a cost-of-service (cost recovery) fee that covers the cost of City staff to
visit the service address to turn the water off and then return to the property to turn the water
back on when the customer has paid the delinquent bill. Any time a fee does not fully pay for the
cost of service to an individual customer, the water service will be subsidized by other customers
through their water rates. However, because the City turns off so few customers, it is unlikely
that the reduced reconnection fees cost recovery will impact rates.
City staff will monitor these potential impacts and make adjustments to the Discontinuation of
Residential Water Service Policy that will comply with SB 998 if necessary.
Ordinance Amendment
Amendments to Section 13.04.060 (Discontinuation of Water Service) and Section 13.04.110
(Delinquencies and Penalties) of Municipal Code Chapter 13.04 (Water Service) of the
Municipal Code are being proposed to comply with the 60-day delinquency period required
under SB 998 (Attachment D). The City’s Municipal Code currently states that water bills
become delinquent 30 days after presentation of the bill and that water service may be
discontinued when the bill becomes delinquent.
Policy Context
To comply with SB 998, the City is required to make these changes to the Municipal Code and
establish the proposed policies.
Public Engagement
This item is on the agenda for the February 4, 2020 City Council meeting and will follow all
required postings and notification requirements. The public will have an opportunity to comment on
this item at or before the meeting.
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CONCURRENCE
The Finance Department concurs with the recommendations.
ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) does not apply to the recommended action in
this report, because the action does not constitute a “Project” under CEQA Guidelines Sec.
15378.
FISCAL IMPACT
Budgeted: No Budget Year: 2019-20
Funding Identified: Yes
Fiscal Analysis:
Funding Sources One-Time Costs Annual Ongoing Cost
Water Fund $500 $3,000
Sewer Fund $500 $3,000
Total $1,000 $6,000
Staff anticipates that the City’s recovery of delinquent balances may be reduced with the
proposed lengthening of the delinquency period to 60 days and offering a payment arrangement
as long as 12 months in line with SB 998 requirements. The proposed reduction of the
reconnection fee from $117 to $50 for some customers will not fully recover the cost to perform
the work of turning the water off and then back on.
Translation services will be a one-time cost of approximately $1,000. This cost will be absorbed
in the Water and Sewer fund current budget allocations. The cost to print and mail additional late
notices will cost approximately $6,000 per year. There are less than six months left in the 2019-
20 fiscal year so the $3,000 will be absorbed in the Water and Sewer fund current budget
allocations. Additional budget for future years will be requested with each annual budget
appropriation.
ALTERNATIVES
1. Do not introduce the ordinance and adopt the resolutions. This is not recommended
because SB 998 is State law and imposes civil penalties of up to $1,000 per day for
violations.
2. Adopt greater protections than those required by SB 998. This is not recommended because
this may increase customer hardships and aged accounts receivable.
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Item 3
Attachments:
a - Draft Ordinance
b - Draft Resolution - Discontinuation of Water Services Policy
c - Draft Resolution - Adopting Reconnection Fee
d - Summary of Changes
e - Senate Bill No. 998 Verbiage
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Item 3
O ______
ORDINANCE NO. _____ (2020 SERIES)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, AMENDING SECTIONS 13.04.060 AND 13.04.110
OF THE SAN LUIS OBISPO MUNICIPAL CODE TITLE 13.04 – WATER
SERVICE
WHEREAS, the City of San Luis Obispo (City) is a municipal corporation duly organized
under the California Constitution and laws of the State of California; and
WHEREAS, the City owns and operates a public water system that supplies water to
residential, commercial, and industrial customers throughout the City’s jurisdiction; and
WHEREAS, in 2018, the California Legislature adopted Senate Bill 998 (“SB 998”) which
adopted new and expanded protections regarding discontinuation of water service for nonpayment
and related matters; and
WHEREAS, the City Council desires to amend Chapter 13.04 of the Municipal Code to
ensure consistency with the requirements of SB 998 and other laws; and
NOW THEREFORE, BE IT ORDAINED by the City Council of the City of San Luis
Obispo as follows:
SECTION 1: Recitals. The above recitals are true and correct and are incorporated herein
by this reference.
SECTION 2. Section 13.04.060 of the San Luis Obispo Municipal Code is hereby
amended to read as follows:
13.04.060 Discontinuation of water service. Each customer discontinuing water service
shall be required to provide information according to the procedures established by the Director of
finance and information technology Utilities.
A. Nonpayment of Bills.
1. A customer’s water service may be discontinued if a bill is not paid on or before thirty sixty
days from the date of presentation the bill becomes delinquent. “Date of presentation” shall
be the billing date as referenced on the billing statement.
2. A customer’s unpaid balance for water service previously rendered by the city may be
transferred to that same customer’s current water service and water service may be
discontinued if water service furnished at a previous location is not paid on or before thirty
sixty days from the date of presentation the bill becomes delinquent.
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Ordinance No. _____ (2020 Series) Page 2
O ______
3. If a customer receives water service at more than one location, and the bill for service at
any one location is not paid on or before thirty sixty days from the date of presentation the
bill becomes delinquent, water services at all locations may be discontinued.
B. Unsafe Apparatus. The utilities department may discontinue service to any parcels where
apparatus, appliances, or equipment using water is dangerous, unsafe, causing damage or not in
conformity with any laws or ordinances.
C. Service Detrimental to Others. The utilities department may discontinue service to any parcels
where the demand may be detrimental or injurious to the service furnished to other customers.
D. Fraud and Abuse. The utilities department shall have the right to refuse or to discontinue water
service to any parcels to protect itself against fraud or abuse.
E. Noncompliance. The utilities department may, unless otherwise provided, discontinue water
services to a customer for noncompliance with any of these regulations if the customer fails to
comply with them within five days after the date of presentation of written notice of the utilities
department’s intention to discontinue service. If such noncompliance affects matters of health and
safety and/or is causing property damage, and conditions warrant, the utilities department may
discontinue water service immediately.
F. Customer’s Request for Service Discontinuance. A customer may have his or her water service
discontinued by notifying the finance utilities department reasonably well in advance of the desired
date of discontinuance. He or she will be required to pay all water charges until the date of such
discontinuance.
G. Restoration – Reconnection Charges. The finance utilities department may charge such amount
as may be established from time to time by resolution of the city council for restoring water service
which has been discontinued because of noncompliance with these rules. (Ord. 1597 § 6, 2014:
prior code § 7410.17. Formerly 13.04.180)
SECTION 3. Section 13.04.110 of the San Luis Obispo Municipal Code is hereby
amended to read as follows:
13.04.110 Delinquencies and penalties. For failure to pay for water service by the
provisions of this chapter prior to the delinquency date, the director of finance utilities may add a
penalty. The amount of the penalty shall be set by resolution of the city council. (Ord. 1597 § 11,
2014)
SECTION 4. Severability. If any subdivision, paragraph, sentence, clause, or phrase of
this ordinance is, for any reason, held to be invalid or unenforceable by a court of competent
jurisdiction, such invalidity or unenforceability shall not affect the validity or enforcement of the
remaining portions of this ordinance, or any other provisions of the City’s rules and regulations.
It is the City’s express intent that each remaining portion would have been adopted irrespective of
the fact that any one or more subdivisions, paragraphs, sentences, clauses, or phrases be declared
invalid or unenforceable.
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Ordinance No. _____ (2020 Series) Page 3
O ______
SECTION 5. Environmental Review. The proposed ordinance amendment is exempt
from California Environmental Quality Act (CEQA) pursuant to statute (Public Resources Code
Section 21000, et seq.) and the CEQA Guidelines (14 Cal. Code Regs. 15000 et seq.), including
without limitation under sections 15307 and 15308 of the CEQA Guidelines (actions to protect
natural resources and the environment) and because it can be seen with certainty that there is no
possibility the adoption of this ordinance amendment may have a significant effect on the
environment (CEQA Guidelines § 15061(b)(3)).
SECTION 6. A summary of this ordinance, together with the names of Council members
voting for and against, shall be published at least five (5) days prior to its final passage, in The
Tribune, a newspaper published and circulated in this City. This ordinance shall go into effect at
the expiration of thirty (30) days after its final passage.
INTRODUCED on the ____ day of ____, 2020, AND FINALLY ADOPTED by the
Council of the City of San Luis Obispo on the ____ day of ____, 2020, on the following vote:
AYES:
NOES:
ABSENT:
____________________________________
Mayor Heidi Harmon
ATTEST:
____________________________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
_____________________________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo, California, this _________ day of _____________________________, 2020.
______________________________
Teresa Purrington
City Clerk
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Item 3
R ______
RESOLUTION NO. _____ (2020 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, ADOPTING A DISCONTINUATION OF
RESIDENTIAL WATER SERVICES FOR NON-PAYMENT POLICY
WHEREAS, on September 28, 2018, the Water Shutoff Protection Act, Senate Bill No.
998 was signed into law (Health & Safety Code § 116900, et seq. (“SB 998”)); and
WHEREAS, SB 998 requires urban water suppliers, such as the City of San Luis Obispo
(“City”), to adopt, by February 1, 2020, written policies governing the discontinuance of water
service to residential customers for nonpayment; and
WHEREAS, pursuant to existing law in effect prior to the enactment of SB 998, the City’s
policies governing discontinuance of water service to residential customers were adopted by
ordinance and codified within the City’s Code; and
WHEREAS, in order to comply with and implement the requirements of SB 998, the City
Council intends to adopt a Discontinuation of Residential Water Services Policy and to amend
City’s Code, Chapter 13.04, consistent with all applicable legal requirements; and
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo
as follows:
SECTION 1. The City Council hereby adopts the attached Discontinuation of Residential
Water Services for Non-Payment Policy (the “Policy”).
SECTION 2. The City Council hereby finds this action is not subject to and is exempt
from the California Environmental Quality Act, Public Resources Code section 21000, et seq.,
because it constitutes the making of general policy and procedure, it is not a project undertaken or
authorized by the District that will have a reasonably foreseeable impact on the environment, and
it can be seen with certainty that there is no possibility that the action may have a significant effect
on the environment. (Pub. Res. Code § 21065; 14 Cal. Code Regs. §§ 15061(b)(3), 15378(b).)
SECTION 3. Severability. If any subdivision, paragraph, sentence, clause, or phrase of
this Policy is, for any reason, held to be invalid or unenforceable by a court of competent
jurisdiction, such invalidity or unenforceability shall not affect the validity or enforcement of the
remaining portions of this Policy, or any other provisions of the City’s rules and regulations. It is
the City’s express intent that each remaining portion would have been adopted irrespective of the
fact that any one or more subdivisions, paragraphs, sentences, clauses, or phrases be declared
invalid or unenforceable.
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Resolution No. _____ (2020 Series) Page 2
R ______
SECTION 3. This Resolution shall become effective February 4, 2020.
Upon motion of _______________________, seconded by _______________________,
and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this _____ day of _____________________ 2020.
____________________________________
Mayor Heidi Harmon
ATTEST:
____________________________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
_____________________________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo, California, this __________ day of ____________________________, 2020.
____________________________________
Teresa Purrington
City Clerk
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Item 3
R ______
RESOLUTION NO. _____ (2020 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA ADOPTING A RECONNECTION FEE FOR
HOUSEHOLDS DEMONSTRATING INCOME LESS THAN TWO
HUNDRED PERCENT OF THE FEDERAL POVERTY LINE
WHEREAS, the City of San Luis Obispo (“City”) is a municipal corporation duly
organized under the California Constitution and laws of the State of California; and
WHEREAS, the City owns and operates a public water system that supplies water to
residential, commercial, and industrial customers throughout the City’s jurisdiction; and
WHEREAS, in 2018, the California Legislature adopted the Water Shutoff Protection Act,
Senate Bill 998 (“SB 998”) which adopted new and expanded protections regarding
discontinuation of water service for nonpayment and related matters; and
WHEREAS, in order to comply with and implement the requirements of SB 998, the City
Council intends to adopt a water reconnection fee for households.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo
as follows:
SECTION 1. The water reconnection fee for households demonstrating income less than
two hundred percent of the federal poverty line will be $50.
a) The fee will increase annually each July 1 by the Consumer Price Index.
b) The customer shall demonstrate a household income less than two hundred percent of
the federal poverty line if any member of the customer’s household is a current
recipient of:
i) CalWorks;
ii) CalFresh;
iii) General Assistance;
iv) Medi-Cal;
v) Supplemental Security Income/State Supplementary Payment Program;
vi) California Special Supplemental Nutrition Program for Women, Infants, and
Children; or
vii) The customer declares that the household’s annual income is less than 200-percent
of the federal poverty level.
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Item 3
Resolution No. _____ (2020 Series) Page 2
R ______
Upon motion of _______________________, seconded by _______________________,
and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this _____ day of _____________________ 2020.
____________________________________
Mayor Heidi Harmon
ATTEST:
____________________________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
_____________________________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo, California, this _________ day of ____________________________, 2020.
____________________________________
Teresa Purrington
City Clerk
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Item 3
SB 988 Requirement Existing City Policy Proposed Change
Notification Requirements
1. The City shall adopt a written policy on
discontinuation for nonpayment.
The City does not currently have a
formal policy.
City staff is recommending that the
Council adopt a formal “Interruption of
Residential Water Service Policy.” This
policy has been translated into the required
languages and will be posted on the City’s
website.
2. The City’s written policy be made available
in English, Spanish, Chinese, Tagalog,
Vietnamese, Korean, and any other
language spoken by 10 percent or more of
the City’s population. The policy must be
posted on the City’s website and be
available in writing upon request.
The City does not currently have a
formal policy.
City staff is recommending that the
Council adopt a formal “Interruption of
Residential Water Service Policy.” This
policy has been translated into the required
languages and will be posted on the City’s
website.
3. The policy shall include the following
information:
a. A plan for deferred or reduced
payments;
b. Alternative payment schedules;
c. A formal mechanism for a customer to
contest or appeal a bill;
d. A telephone number for a customer to
contact to discuss options for averting
discontinuation of residential service for
nonpayment.
The City currently provides a plan
for deferred payments; a formal
mechanism for a customer to contest
or appeal a bill; and a telephone
number for a customer to discuss
options to avert discontinuation.
The City will expand options to pay
delinquent bills to avoid discontinuation of
service to include alternative payment
schedules.
4. No less than seven business days before
discontinuation of service, a water system
shall contact the customer name on the
account by telephone or written notice.
Customers are mailed a shut-off
notice the day after they become
delinquent and are called via an
automated phone system 48 hours
before service is discontinued. If the
phone call fails, a door tag is left at
the residence.
The City will maintain these methods of
notification, a shut off notice and a
telephone call, which comply with SB 998.
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Item 3
5. The City shall provide to the customer
information on how to restore service.
The City currently provides
information on how to restore
service.
N/A
Timing Requirements
6. Residential service shall not be discontinued
for non-payment until the payment has been
delinquent for at least 60 days.
Currently service is discontinued
approximately three weeks after a
bill becomes delinquent.
To comply with SB 998, the City will
increase the time before water is
discontinued for non-payment from three
weeks to 60 days delinquency.
Protections for Non-Customer Occupants
7. If the customer’s mailing address is not the
property address to which the service is
provided, notice of imminent
discontinuation shall also be sent to the
address of the property.
Currently Utilities notifies occupants
of pending water shut-off for non-
payment via door tag. The door tag
gives the occupant 14 days advance
notice that the water will be shut-off
if the delinquent bill is not paid.
This policy complies with SB 998 so it will
not be changed
8. If the landlord is the customer on record, the
City shall make every good faith effort to
inform residential occupants, by written
notice, when the account is in arrears that
service will be terminated at least 10 days
prior to termination.
Protections for Households Who are Financially Unable to Pay
9. Water service shall not be discontinued if all
the following are met:
a. The customer submits certification of a
primary care provider that
discontinuation will be life threatening;
b. The customer demonstrates they are
financially unable to pay; and
c. The customer is willing to enter into an
amortization agreement.
The City currently does not shut-off
water if the customer submits
certification of a primary care
provider that discontinuation will be
life threatening. We do not require
the additional two criteria: (1) the
customer demonstrates they are
financially unable to pay; and
(2) the customer is willing to enter
into an amortization agreement.
The City will continue to refrain from
shutting off water if a primary care
provider certifies that discontinuation of
service will be life threatening without
requiring a demonstration that the customer
is unable to pay and willing to enter into an
amortization agreement.
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Item 3
10. For customers who demonstrate a household
income of less than 200-percent of the
federal poverty line, the City shall set a
reconnection fee at $50 ($150 for after-
hours service); and waive one interest
charge every 12 months.
Currently, all customers who are
shut-off for nonpayment must pay
$117 to have their service restored.
This is a cost-of-service fee that
covers the cost of City staff to visit
the service address to turn the water
off and then return to the property to
turn the water back on when the
customer has paid their delinquent
bill.
City staff is recommending that the
Council adopt resolution “Adopting
Reconnection Fee for Households
Demonstrating Income Less than 200-
Percent of the Federal Poverty Line.”
Reporting Requirements
11. The City shall report the annual number of
discontinuations for residential customers on
the City website.
The City does not currently publish
this information.
The City will begin reporting the annual
number of discontinuations for residential
customers on the City website.
Other Protections
12. If the customer appeals the bill, service shall
not be discontinued while the appeal is
pending.
Utilities currently does not
discontinue water while a customer
appeal is pending so no policy
change is required.
N/A
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SHARE THIS:Date Published: 09/28/2018 09:00 PM
SB-998 Discontinuation of residential water service: urban and community water systems.(2017-2018)
Senate Bill No. 998
CHAPTER 891
An act to add Chapter 6 (commencing with Section 116900) to Part 12 of Division 104 of the Health and
Safety Code, relating to water.
[ Approved by Governor September 28, 2018. Filed with Secretary of State
September 28, 2018. ]
LEGISLATIVE COUNSEL'S DIGEST
SB 998, Dodd. Discontinuation of residential water service: urban and community water systems.
Existing law, the California Safe Drinking Water Act, requires the State Water Resources Control Board to
administer provisions relating to the regulation of drinking water to protect public health. Existing law declares it
to be the established policy of the state that every human being has the right to safe, clean, affordable, and
accessible water adequate for human consumption, cooking, and sanitary purposes.
Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including water
corporations. Existing law requires certain notice to be given before a water corporation, public utility district,
municipal utility district, or a municipally owned or operated public utility furnishing water may terminate
residential service for nonpayment of a delinquent account, as prescribed.
This bill would require an urban and community water system, defined as a public water system that supplies
water to more than 200 service connections, to have a written policy on discontinuation of water service to
certain types of residences for nonpayment available in prescribed languages. The bill would require the policy to
include certain components, be available on the system’s Internet Web site, and be provided to customers in
writing, upon request. The bill would provide for enforcement of these provisions, including making a violation of
these provisions punishable by a civil penalty issued by the board in an amount not to exceed $1,000 for each
day in which the violation occurs, and would require the enforcement moneys collected by the board to be
deposited in the Safe Drinking Water Account. The bill would prohibit an urban and community water system from
discontinuing residential service for nonpayment until a payment by a customer has been delinquent for at least
60 days. The bill would require an urban and community water system to contact the customer named on the
account and provide the customer with the urban and community water system’s policy on discontinuation of
residential service for nonpayment no less than 7 business days before discontinuation of residential service, as
prescribed.
This bill would prohibit residential service from being discontinued under specified circumstances. The bill would
require an urban and community water system that discontinues residential service to provide the customer with
information on how to restore service. The bill would require an urban and community water system to waive
interest charges on delinquent bills for, and would limit the amount of a reconnection of service fee imposed on, a
residential customer who demonstrates, as prescribed, to the urban and community water system household
income below 200% of the federal poverty line. The bill would require an urban and community water system that
furnishes individually metered residential service to residential occupants of a detached single-family dwelling, a
multiunit structure, mobilehome park, or permanent residential structure in a labor camp, and that the owner,
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manager, or operator of the dwelling, structure, or park is the customer of record, to make every good faith effort
to inform the residential occupants by written notice that service will be terminated and that the residential
occupants have the right to become customers, as specified. The bill would require an urban and community
water system to report the number of annual discontinuations of residential service for inability to pay on its
Internet Web site and to the board, and the bill would require the board to post on its Internet Web site the
information reported. The bill would require an urban water supplier, as defined, or an urban and community
water system regulated by the commission, to comply with the bill’s provisions on and after February 1, 2020,
and any other urban and community water system to comply with the bill’s provisions on and after April 1, 2020.
The bill would provide that the provisions of the bill are in addition to the provisions in existing law duplicative of
the bill and that where the provisions are inconsistent, the provisions described in the bill apply.
Vote: majority Appropriation: no Fiscal Committee: yes Local Program: no
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares as follows:
(a) All Californians have the right to safe, accessible, and affordable water as declared by Section 106.3 of the
Water Code.
(b) It is the intent of the Legislature to minimize the number of Californians who lose access to water service due
to inability to pay.
(c) Water service discontinuations threaten human health and well-being, and have disproportionate impact on
infants, children, the elderly, low-income families, communities of color, people for whom English is a second
language, physically disabled persons, and persons with life-threatening medical conditions.
(d) When there is a delinquent bill, all Californians, regardless of whether they pay a water bill directly, should be
treated fairly, and fair treatment includes the ability to contest a bill, seek alternative payment schedules, and
demonstrate medical need and severe economic hardship.
(e) The loss of water service causes tremendous hardship and undue stress, including increased health risks to
vulnerable populations.
(f) It is the intent of the Legislature that this act provide additional procedural protections and expand upon the
procedural safeguards contained in the Public Utilities Code and Government Code as of January 1, 2018, relating
to utility service disconnections.
SEC. 2. Chapter 6 (commencing with Section 116900) is added to Part 12 of Division 104 of the Health and
Safety Code, to read:
CHAPTER 6. Discontinuation of Residential Water Service
116900. This chapter shall be known, and may be cited, as the Water Shutoff Protection Act.
116902. For the purposes of this chapter, the following definitions apply:
(a) “Board” means the State Water Resources Control Board.
(b) “Public water system” has the same meaning as defined in Section 116275.
(c) “Residential service” means water service to a residential connection that includes single-family residences,
multifamily residences, mobilehomes, including, but not limited to, mobilehomes in mobilehome parks, or
farmworker housing.
(d) “Urban and community water system” means a public water system that supplies water to more than 200
service connections.
(e) “Urban water supplier” has the same meaning as defined in Section 10617 of the Water Code.
116904. (a) An urban water supplier not regulated by the Public Utilities Commission shall comply with this chapter
on and after February 1, 2020.
(b) An urban and community water system regulated by the Public Utilities Commission shall comply with this
chapter on and after February 1, 2020. The urban and community water system regulated by the Public Utilities
Commission shall file advice letters with the commission to conform with this chapter.
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(c) An urban and community water system not described in subdivision (a) or (b) shall comply with this chapter
on and after April 1, 2020.
116906. (a) An urban and community water system shall have a written policy on discontinuation of residential
service for nonpayment available in English, the languages listed in Section 1632 of the Civil Code, and any other
language spoken by at least 10 percent of the people residing in its service area. The policy shall include all of the
following:
(1) A plan for deferred or reduced payments.
(2) Alternative payment schedules.
(3) A formal mechanism for a customer to contest or appeal a bill.
(4) A telephone number for a customer to contact to discuss options for averting discontinuation of residential
service for nonpayment.
(b) The policy shall be available on the urban and community water system’s Internet Web site, if an Internet
Web site exists. If an Internet Web site does not exist, the urban and community water system shall provide the
policy to customers in writing, upon request.
(c) (1) The board may enforce the requirements of this section pursuant to Sections 116577, 116650, and
116655. The provisions of Section 116585 and Article 10 (commencing with Section 116700) of Chapter 4 apply
to enforcement undertaken for a violation of this section.
(2) All moneys collected pursuant to this subdivision shall be deposited in the Safe Drinking Water Account
established pursuant to Section 116590.
116908. (a) (1) (A) An urban and community water system shall not discontinue residential service for
nonpayment until a payment by a customer has been delinquent for at least 60 days. No less than seven business
days before discontinuation of residential service for nonpayment, an urban and community water system shall
contact the customer named on the account by telephone or written notice.
(B) When the urban and community water system contacts the customer named on the account by telephone
pursuant to subparagraph (A), it shall offer to provide in writing to the customer the urban and community water
system’s policy on discontinuation of residential service for nonpayment. An urban and community water system
shall offer to discuss options to avert discontinuation of residential service for nonpayment, including, but not
limited to, alternative payment schedules, deferred payments, minimum payments, procedures for requesting
amortization of the unpaid balance, and petition for bill review and appeal.
(C) When the urban and community water system contacts the customer named on the account by written notice
pursuant to subparagraph (A), the written notice of payment delinquency and impending discontinuation shall be
mailed to the customer of the residence to which the residential service is provided. If the customer’s address is
not the address of the property to which residential service is provided, the notice also shall be sent to the
address of the property to which residential service is provided, addressed to “Occupant.” The notice shall
include, but is not limited to, all of the following information in a clear and legible format:
(i) The customer’s name and address.
(ii) The amount of the delinquency.
(iii) The date by which payment or arrangement for payment is required in order to avoid discontinuation of
residential service.
(iv) A description of the process to apply for an extension of time to pay the delinquent charges.
(v) A description of the procedure to petition for bill review and appeal.
(vi) A description of the procedure by which the customer may request a deferred, reduced, or alternative
payment schedule, including an amortization of the delinquent residential service charges, consistent with the
written policies provided pursuant to subdivision (a) of Section 116906.
(2) If the urban and community water system is unable to make contact with the customer or an adult occupying
the residence by telephone, and written notice is returned through the mail as undeliverable, the urban and
community water system shall make a good faith effort to visit the residence and leave, or make other
arrangements for placement in a conspicuous place of, a notice of imminent discontinuation of residential service
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for nonpayment and the urban and community water system’s policy for discontinuation of residential service for
nonpayment.
(b) If an adult at the residence appeals the water bill to the urban and community water system or any other
administrative or legal body to which such an appeal may be lawfully taken, the urban and community water
system shall not discontinue residential service while the appeal is pending.
116910. (a) An urban and community water system shall not discontinue residential service for nonpayment if all
of the following conditions are met:
(1) The customer, or a tenant of the customer, submits to the urban and community water system the
certification of a primary care provider, as that term is defined in subparagraph (A) of paragraph (1) of
subdivision (b) of Section 14088 of the Welfare and Institutions Code, that discontinuation of residential service
will be life threatening to, or pose a serious threat to the health and safety of, a resident of the premises where
residential service is provided.
(2) The customer demonstrates that he or she is financially unable to pay for residential service within the urban
and community water system’s normal billing cycle. The customer shall be deemed financially unable to pay for
residential service within the urban and community water system’s normal billing cycle if any member of the
customer’s household is a current recipient of CalWORKs, CalFresh, general assistance, Medi-Cal, Supplemental
Security Income/State Supplementary Payment Program, or California Special Supplemental Nutrition Program
for Women, Infants, and Children, or the customer declares that the household’s annual income is less than 200
percent of the federal poverty level.
(3) The customer is willing to enter into an amortization agreement, alternative payment schedule, or a plan for
deferred or reduced payment, consistent with the written policies provided pursuant to subdivision (a) of Section
116906, with respect to all delinquent charges.
(b) (1) If the conditions listed in subdivision (a) are met, the urban and community water system shall offer the
customer one or more of the following options:
(A) Amortization of the unpaid balance.
(B) Participation in an alternative payment schedule.
(C) A partial or full reduction of the unpaid balance financed without additional charges to other ratepayers.
(D) Temporary deferral of payment.
(2) The urban and community water system may choose which of the payment options described in paragraph
(1) the customer undertakes and may set the parameters of that payment option. Ordinarily, the repayment
option offered should result in repayment of any remaining outstanding balance within 12 months. An urban and
community water system may grant a longer repayment period if it finds the longer period is necessary to avoid
undue hardship to the customer based on the circumstances of the individual case.
(3) Residential service may be discontinued no sooner than 5 business days after the urban and community water
system posts a final notice of intent to disconnect service in a prominent and conspicuous location at the property
under either of the following circumstances:
(A) The customer fails to comply with an amortization agreement, an alternative payment schedule, or a deferral
or reduction in payment plan for delinquent charges for 60 days or more.
(B) While undertaking an amortization agreement, an alternative payment schedule, or a deferral or reduction in
payment plan for delinquent charges, the customer does not pay his or her current residential service charges for
60 days or more.
116912. An urban and community water system that discontinues residential service for nonpayment shall provide
the customer with information on how to restore residential service.
116914. (a) For a residential customer who demonstrates to an urban and community water system household
income below 200 percent of the federal poverty line, the urban and community water system shall do both of the
following:
(1) Set a reconnection of service fee for reconnection during normal operating hours at fifty dollars ($50), but not
to exceed the actual cost of reconnection if it is less. Reconnection fees shall be subject to an annual adjustment
for changes in the Consumer Price Index beginning January 1, 2021. For the reconnection of residential service
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during nonoperational hours, an urban and community water system shall set a reconnection of service fee at one
hundred fifty dollars ($150), but not to exceed the actual cost of reconnection if it is less. Reconnection fees shall
be subject to an annual adjustment for changes in the Consumer Price Index beginning January 1, 2021.
(2) Waive interest charges on delinquent bills once every 12 months.
(b) An urban and community water system shall deem a residential customer to have a household income below
200 percent of the federal poverty line if any member of the household is a current recipient of CalWORKs,
CalFresh, general assistance, Medi-Cal, Supplemental Security Income/State Supplementary Payment Program,
or California Special Supplemental Nutrition Program for Women, Infants, and Children, or the customer declares
that the household’s annual income is less than 200 percent of the federal poverty level.
116916. (a) This section applies if there is a landlord-tenant relationship between the residential occupants and
the owner, manager, or operator of the dwelling.
(b) If an urban and community water system furnishes individually metered residential service to residential
occupants of a detached single-family dwelling, a multiunit residential structure, mobilehome park, or permanent
residential structure in a labor camp as defined in Section 17008, and the owner, manager, or operator of the
dwelling, structure, or park is the customer of record, the urban and community water system shall make every
good faith effort to inform the residential occupants, by means of written notice, when the account is in arrears
that service will be terminated at least 10 days prior to the termination. The written notice shall further inform
the residential occupants that they have the right to become customers, to whom the service will then be billed,
without being required to pay any amount which may be due on the delinquent account.
(c) The urban and community water system is not required to make service available to the residential occupants
unless each residential occupant agrees to the terms and conditions of service and meets the requirements of law
and the urban and community water system’s rules and tariffs. However, if one or more of the residential
occupants are willing and able to assume responsibility for the subsequent charges to the account to the
satisfaction of the urban and community water system, or if there is a physical means legally available to the
urban and community water system of selectively terminating service to those residential occupants who have not
met the requirements of the urban and community water system’s rules and tariffs, the urban and community
water system shall make service available to those residential occupants who have met those requirements.
(d) If prior service for a period of time is a condition for establishing credit with the urban and community water
system, residence and proof of prompt payment of rent or other credit obligation acceptable to the urban and
community water system for that period of time is a satisfactory equivalent.
(e) Any residential occupant who becomes a customer of the urban and community water system pursuant to this
section whose periodic payments, such as rental payments, include charges for residential water service, where
those charges are not separately stated, may deduct from the periodic payment each payment period all
reasonable charges paid to the urban and community water system for those services during the preceding
payment period.
(f) In the case of a detached single-family dwelling, the urban and community water system may do any of the
following:
(1) Give notice of termination at least seven days prior to the proposed termination.
(2) In order for the amount due on the delinquent account to be waived, require an occupant who becomes a
customer to verify that the delinquent account customer of record is or was the landlord, manager, or agent of
the dwelling. Verification may include, but is not limited to, a lease or rental agreement, rent receipts, a
government document indicating that the occupant is renting the property, or information disclosed pursuant to
Section 1962 of the Civil Code.
116918. An urban and community water system shall report the number of annual discontinuations of residential
service for inability to pay on the urban and community water system’s Internet Web site, if an Internet Web site
exists, and to the board. The board shall post on its Internet Web site the information reported.
116920. (a) The Attorney General, at the request of the board or upon his or her own motion, may bring an action
in state court to restrain by temporary or permanent injunction the use of any method, act, or practice declared
in this chapter to be unlawful.
(b) For an urban and community water system regulated by the Public Utilities Commission, the commission may
bring an action in state court to restrain by temporary or permanent injunction the use by an urban and
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community water system regulated by the commission of any method, act, or practice declared in this chapter to
be unlawful.
116922. All written notices required under this chapter shall be provided in English, the languages listed in Section
1632 of the Civil Code, and any other language spoken by 10 percent or more of the customers in the urban and
community water system’s service area.
116924. Where provisions of existing law are duplicative of this chapter, compliance with one shall be deemed
compliance with the other. Where those provisions are inconsistent, the provisions of this chapter shall apply.
Nothing in this chapter shall be construed to limit or restrict the procedural safeguards against the disconnection
of residential water service existing as of December 31, 2018.
116926. This chapter does not apply to the termination of a service connection by an urban and community water
system due to an unauthorized action of a customer.
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