FOR: City Council Meeting [February 13, 2024]
TO: Honorable Mayor and City Council
FROM: David Carmany, City Manager
AUTHOR: Stephen Dopudja, P.E., Interim Utilities Manager
Toyasha Sebbag, Assistant to the City Manager
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Request that the City Council and Rialto Utility Authority Board: 1) Adopt a Resolution No. 8188 and RUA Resolution No. 08-27 to Ratify the Acceptance of $402,237.74 for Water and $5,677,933.19 for Wastewater from the State Water Resources Control Board’s California Water and Wastewater Arrearage Payment Program and Authorize $13,168.01 in Water and $28,843.59 in Wastewater to return unused funds; and 2) Accept $1,824,579.14 from the State Water Resources Control Board’s California Extended Water and Wastewater Arrearage Payment Program. (ACTION)
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BACKGROUND:
In 2021, funding was established by Assembly Bill No. 135 (Chapter 85, Statutes of 2021) for the California Water and Wastewater Arrearage Payment Program (CWWAPP). This program was administered by the State Water Resources Control Board (SWRCB). The program allowed utility providers to apply directly to the SWRCB for their eligible residential and commercial customers. The funding covered water and wastewater debt from residential and commercial customers accrued between March 4, 2020, and June 15, 2021. The application period for these funds ended on April 1, 2022, and the State Water Board disbursed over $385 million of the $985 million federal allocation to water and wastewater systems for residential and commercial arrearages.
Rialto Water and Wastewater Arrearages Allocation
As authorized by staff, Rialto Water Services (RWS)/Veolia identified 1,119 water accounts and 70 commercial accounts eligible for the program, for a total request of $402,237.74 submitted to the SWRCB for water accounts. This check was issued to the City on January 12, 2022. The check included a maximum of 3%, up to 1 million dollars, whichever was less, as administrative reimbursable costs. After the disbursement of money to the water accounts and administrative overhead costs, $13,168.01 was returned to the SWRCB on March 14, 2022.
As authorized by staff, RWS/Veolia identified 1,394 wastewater accounts and 67 commercial accounts eligible for the program, for a total request of $567,793.19 submitted to the SWRCB for wastewater accounts. This check was issued to the City on May 20, 2022. The check included a maximum of 3%, up to 1 million dollars, whichever was less, as administrative reimbursable costs. After the disbursement of money to the wastewater accounts and administrative overhead costs, $28,843.59 was returned to the SWRCB on August 2, 2022.
This item was brought to the Water Sub-Committee on January 24, 2024 and recommended to bring forward to the full City Council for adoption.
ANALYSIS/DISCUSSION:
On July 10, 2023, Governor Newsom signed a budget trailer bill expanding the Arrearages Program. This new Extended Water and Wastewater Arrearage Payment Program extended the COVID-19 Relief Period from June 16, 2021, to December 31, 2022, with the state legislature allocating the remaining $600 million in federal funding for this Program. The new Extended Arrearage Program allows utility providers to include both water and wastewater debt from residential and commercial customers.
As authorized by staff, RWS/Veolia identified $760,272.59 in residential water accounts, $73,452.68 in commercial water accounts, $881,002.39 in residential wastewater accounts, and $94,258.47 in commercial wastewater accounts and $15,593.01 in 3% allocation of administrative costs, for a total arrearages payment amount request of $1,824,579.14. This amount was submitted to the SWRCB on December 13, 2023.
The Extended Arrearage Program had a 60-day application period running from November 1, 2023, through December 31, 2023, for both water and wastewater arrearages. Disbursement of these funds is scheduled to begin immediately after approval of the application by the SWRCB. Once received, the application of the credit of $1.8 million from the SWRCB will bring the City’s/Rialto Utility Authority’s rolling average delinquency balance to pre-COVID-19 pandemic levels of approximately $500,000.
ENVIRONMENTAL IMPACT:
The requested City Council action is not a “Project” as defined by the California Environmental Quality Act (CEQA). Pursuant to Section 15378(a), a “Project” means the whole of an action, which has the potential to result in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment. According to Section 15378(b), a Project does not include (5) Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment.
GENERAL PLAN CONSISTENCY:
This action is consistent with Guiding Principle 3A in the General Plan:
Our City government will lead by example and will operate in an open, transparent, and responsive manner that meets the needs of the citizens and is a good place to do business.
LEGAL REVIEW:
The City Attorney has reviewed and recommends approval of this staff report.
FINANCIAL IMPACT:
Operating Budget Impact
Ratifying the acceptance, disbursement, and return of the California Water and Wastewater Arrearage Payment Program (CWWAPP) will formalize staff action and allow staff to accept and apply the $1,824,579.14 from the State Water Resources Control Board’s California Extended Water and Wastewater Arrearage Payment Program to outstanding water and wastewater balances.
This action will add $15,593.01 in one-time administrative overhead costs to be added to the RUA operating revenue fund.
Capital Improvement Budget Impact
The proposed action will not affect the Capital Improvement Budget.
RECOMMENDATION:
Request that the City Council and Rialto Utility Authority Board: 1) Ratify the acceptance of $402,237.74 for Water and $5,677,933.19 for Wastewater from the State Water Resources Control Board’s California Water and Wastewater Arrearage Payment Program and Authorize $13,168.01 in Water and $28,843.59 in Wastewater to return unused funds; and 2) Accept $1,824,579.14 from the State Water Resources Control Board’s California Extended Water and Wastewater Arrearage Payment Program.