For City Council and Rialto Utility Authority Meeting [June 13, 2023]
TO: Honorable Mayor and City Council
APPROVAL: Arron Brown, Acting City Manager
FROM: Thomas J. Crowley, P.E., Utilities Manager
Title
Request City Council/Rialto Utility Authority Board to Set a Public Hearing for June 27, 2023, to Receive Public Comment Related to the Placement of Sewer Service Charges on the County Property Tax Roll for Delinquent Accounts.
Body
BACKGROUND
The City of Rialto (City) / Rialto Utility Authority (RUA) provides sewer services throughout the entire City and areas of Bloomington. Where RUA provides water service, both water and sewer services are billed together. For delinquent accounts, the RUA can impose penalties and shut off water services to promote payment, per Rialto Municipal Code Section 12.08. However, there are areas of the City where either the West Valley Water District or the Fontana Water Company provides water services and the RUA only bills for sewer service. The sewer-only accounts have high delinquency rates, as the RUA cannot disconnect services for lack of payment.
To collect sewer-only accounts more effectively, the Rialto Municipal Code Section 12.08.201 was amended to allow for placement of delinquent charges on property tax bills through the County Tax Collector’s Office. The Ordinance approved on June 19, 2007, provides a method for collecting delinquent accounts like the lien placement process used for solid waste delinquent accounts.
ANALYSIS/DISCUSSION
During the spring of each year, Staff develops a list of properties to be levied for delinquent sewer fees. Once the list of properties to be levied has been completed, the list will be compared with the most recent County property ownership data. Changes will be incorporated into the final list which is then submitted to the County. This list is comprised of accounts where the account owner is delinquent on sewer payments. Once created, this list is presented to the City Council/Rialto Utility Authority Board for permission to place the delinquent sewer fees on the tax rolls.
To meet the County submittal deadline, several things must occur, most notably, a list must be presented to the City Council/Rialto Utility Authority Board of properties meeting the criteria for placement of liens with the County and a public hearing must be held to approve the levy. Notification letters were sent to the delinquent account holders and the property owner if different, alerting them of the RUA’s plan to place the delinquent charges on the property tax roll and giving them one last opportunity to pay.
The last date for a customer to pay their delinquent sewer bill before placement on the tax rolls is June 26, 2023. It should be noted that if a customer pays their delinquent wastewater bill prior to the deadline, their property and the levy amount will be removed from the list provided to the County. A copy of the letter is included as Attachment 1 and a copy of the Notice of Public Hearing is included as Attachment 2. Once the list of properties to be levied has been completed, the list will be compared with the most recent County property ownership data. Changes will be incorporated into the final list which is then submitted to the County.
This item was presented to the Utilities Commission on May 16, 2023, which recommended presenting it to the full City Council/Rialto Utility Authority Board. In 2022, it was recommended to exclude from the tax roll list any new accounts that were previously not levied on the tax roll. Historically, many customers choose to allow their sewer account to fall into delinquency knowing the account will be paid in full through levying on the tax roll. In 2022, staff coordinated with RWS to understand the historical average of sewer only accounts falling delinquent. Historical data showed that nearly 2/3 of delinquent sewer only accounts were previously levied on the tax roll, implying a conscience choice to pay for sewer service through the tax roll process. On that basis, RWS has reviewed the 2023 list of sewer only delinquent accounts and will exclude 406 accounts from the proposed tax roll levy as these accounts were not delinquent in the past annual tax roll levy. Staff will coordinate with these accounts to connect them with financial assistance that is available for utility payments.
SCHEDULE/LEVY PROCESS
If the City were to post levies for this fiscal year, the following tasks must be completed by the deadlines listed below:
The total levy amount for Fiscal Year 2022-2023 is estimated to be approximately $1,018,215 for 1,459 delinquent accounts, less the 406 accounts that have not been delinquent within the last 2 years, bringing the levy amount to $733,518 representing 1,053 delinquent accounts.
ENVIRONMENTAL IMPACT
This request is not a Project as defined by Section 15378 of the California Environmental Quality Act (CEQA). A “Project” means the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. Pursuant to Section 15378 (b)(5) a project does not include 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 supports the staff report.
FINANCIAL IMPACT
Operating Budget Impact
The levy is comprised of accounts where the account owner is the same as the current property owner per the County secured tax roll. The potential total levy amount is estimated at $733,518 and there are approximately 1,053 delinquent accounts.
Capital Improvement Budget Impact
There is no impact to the Capital Improvement Budget.
RECOMMENDATION
Staff recommends that the City Council/Rialto Utility Authority Board set a Public Hearing for June 27, 2023, to receive public comment related to the placement of charges on the County Property Tax Roll for delinquent sewer payments.