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HomeMy WebLinkAboutAgenda - 12-07-2020; 4-a - OWASA Update on Unpaid Bills 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: December 7, 2020 Action Agenda Item No. 4-a SUBJECT: OWASA Update on Unpaid Bills DEPARTMENT: County Manager ATTACHMENT(S): INFORMATION CONTACT: November 17, 2020 Letter from OWASA Bonnie Hammersley, County Manager, Board Chair Ray Dubose 245-2300 Todd Taylor, OWASA Executive Director, 968-4421 PURPOSE: To receive a presentation and information from the Orange Water and Sewer Authority (OWASA) on impacts to customers during the COVID-19 pandemic. BACKGROUND: At the October 20, 2020 BOCC Meeting Commissioner Mark Dorosin made a petition regarding the Board and OWASA to identify ways to assist residents experiencing back payments during COVID-19. A request was made to Executive Director, Todd Taylor to provide information to the Board at a future meeting. The Orange County Emergency Housing Assistance fund provides rent and utility assistance to avoid shut offs and eviction using investments from the County and the Towns of Carrboro, Chapel Hill, and Hillsborough. Assistance is available to Orange County residents at or below 60% of Area Median Income and in 2020 has provided more than $2 million in assistance to almost 900 County residents. Of that, $17,502 was paid to OWASA to pay arrears and avoid shut offs. FINANCIAL IMPACT: There is no financial impact associated with receiving the presentation. SOCIAL JUSTICE IMPACT: There is no Orange County Social Justice Goal impact associated with this item. ENVIRONMENTAL IMPACT: There is no environmental impact associated with this item. RECOMMENDATION(S): The Manager recommends that the Board receive the presentation as information and provide any feedback as necessary. 2 Orange Water and Sewer Authority OWASA OWASA is Carrboro-Chapel Hill's not-for-profit public service agency delivering high quality water, wastewater, and reclaimed water services. DATE: November 17, 2020 TO: Orange County Board of County Commissioners FROM: Ray DuBose, P.E., Chair of the OWASA Board of Directors SUBJECT: Customer Assistance for OWASA Bills The COVID-19 pandemic has had significant impacts on the physical and economic health of our community. During this time, as always, the Orange Water and Sewer Authority (OWASA) takes our responsibility to protect public health and support a vibrant economy in Carrboro, Chapel Hill, and southern Orange County through the provision of high-quality, reliable, and affordable water and wastewater service very seriously. OWASA is a not-for-profit, community-owned water, wastewater, and reclaimed water utility. Our investments in water and wastewater infrastructure are not supported by taxes nor federal grants: only rates and fees paid by customers for services. We are required by law to reinvest the rates and fees paid by our customers directly into the treatment plants,pipes, and people that will serve our community for years to come. We constantly strive to balance the need to invest in the community's water and wastewater infrastructure and to maintain affordable rates. This year, maintaining that balance has been more difficult. This memo provides an overview of OWASA's temporary suspension of service disconnections, the extent and impact of this action, and opportunities that we are supporting and pursuing to assist customers in need. We are grateful for Orange County's partnership in helping us meet this need in our community. Temporary Suspension of Standard Collection Practices On March 12, 2020, in the early days of our pandemic response, OWASA proactively suspended disconnections for non-payment. Nineteen days later, Governor Cooper issued Executive Order 124, ordering all utilities to suspend disconnection for non-payment through the end of May 2020. This order was extended through July 29, 2020, with Executive Order 142. Given that the County was still under a declared State of Emergency (and remains so through at December 31, 2020), OWASA chose to carry on with our temporary suspension of standard collection practices beyond the executive order and we are currently not disconnecting for non-payment. We do not plan to resume standard collection practices until early 2021, at the soonest. We are closely 400 Jones Ferry Road,Carrboro,NC 27510 0 919-968-4421 0 info@owasa.org 0 @OWASAI 0 www.owasa.org 3 Customer Assistance for OWASA Bills November 17, 2020 Page 2 monitoring our finances, as well as the County's declaration of a State of Emergency, to inform our decision making on when to resume standard collection practices. Under OWASA's standard collection practices, customers are eligible for disconnection after the due date of the second, concurrent missed payment. When OWASA resumes standard collection practices, the calendar will re-start for customer payments. In other words, the earliest that a service would be disconnected for non-payment would be two months after resuming standard collection practices. Moreover, we will provide at least 30 days' notice from our decision to resume standard collection practices to the time at which they will begin. This pacing will provide customers time to establish a payment plan and/or identify outside funding for bill assistance if needed. Extent of Past Due Accounts and Customer Communication As of the date of this memo, there are 927 accounts that are past due on their OWASA bill. This is more than twice as many than were past due on March 12, 2020. Collectively, the total past due to OWASA is over$280,000. There currently are 526 households that are more than 60 days past due. The average amount past due for these households is $259. Under standard collection practices, these households would be eligible for service disconnection. Throughout the year, OWASA has maintained regular communications with our past-due customers via email, mail, and phone calls. We have let them know the amount of their past due bills, where to find utility bill assistance, and what to expect in terms of OWASA's resumption of standard collection practices. OWASA's Available Means to Assist OWASA is utilizing all means available to assist our customers. In acknowledgement of the significant financial impact of the COVID-19 crisis on our community, the OWASA Board of Directors approved a budget for Fiscal Year 2021 that did not increase rates for the services we provide. Prior to the crisis, OWASA staff projected that a 5% increase would be needed to continue to support OWASA's employee compensation program and to support our long-term program to renew and replace aging infrastructure. Eliminating compensation adjustments for our employees and deferring investments in our community's utility infrastructure is not a sustainable solution, but it was important to the Board and our community to mitigate any additional financial stress on our customers. The decision to postpone any rate increase presents significant financial challenges for OWASA. With the dramatic decrease of activity at UNC-Chapel Hill, which typically makes up about one- third of our water demands, OWASA's revenues have been about 12%below normal since April 2020. When budgeting for the year, we planned for reduced demand in the first six months of the 4 Customer Assistance for OWASA Bills November 17, 2020 Page 3 fiscal year(July 2020 through December 2020) and assumed that demands would rebound in 2021. Unfortunately, we assumed incorrectly as the pandemic is now projected to extend well into 2021. Thus, revenues will continue to be below normal, and we have been cautiously anticipating this in our routine expenditures. As we look forward to Fiscal Year 2022, it will be increasingly detrimental to the quality and reliability of water and wastewater services to not raise rates. As such, it will be imperative to enhance and expand other means of assisting those who need it most with paying their utility bills. Our suspension of service disconnection for non-payment is not a sustainable strategy for OWASA, nor for the customers with growing balances. Most of our utility neighbors have resumed standard collection practices. Our delay is related to the overall State of Emergency in our County. Meanwhile, the debt owed by customers with past due balances has grown. Unfortunately, we are not able to discount or waive rates and fees due a customer's ability to pay. State law does not allow OWASA to pay off customer debt with reserves or any revenue collected from rates, fees, or charges. We are working to raise contributions to our Care to Share water bill assistance program, support state and federal grants for utility bill assistance, and establish an extended payment plan to allow customers time to pay their past due balances free of interest and fees. Care to Share: Donor-Supported Customer Assistance Program Our community has one of the first customer-assistance programs in the state (established in 1997). The Inter-Faith Council for Social Service has been our partner in administering Care to Share funds since the beginning of the program. Through the Care to Share program,residents can request financial assistance to pay their OWASA bill or rent if utilities are included. There is no official income eligibility for Care to Share funds. Recently,we have worked with the IFC to develop a streamlined referral process from OWASA customer service to the IFC for Care to Share assistance. The Care to Share program is funded 100%by donations. Last month, nearly 1,000 members of our community donated over$1,400 through on-bill donations to help their neighbors pay for water utility bills. Current donations are at an all-time high(Figure 1). Over the past three years, on-bill donations have nearly tripled. This is the result of increased promotion of the program by OWASA and local elected officials through the annual Care to Share Day(celebrated on November 19 this year) and Giving Tuesday Now(a COVID-19 fundraiser) campaigns, as well as a focused campaign to encourage contributors to consider an increase in their monthly donations. 5 Customer Assistance for OWASA Bills November 17, 2020 Page 4 Figure 1: Historical Trends in Care to Share On-Bill Donations $15,000 8% 7% $12,000 6% M w V c $9,000 5� 13J. G a 4% L .� $6,000 3% D O +' V 2% V $3,000 p 1% $0 0% FY 17 FY 18 FY 19 FY 20 Last 12 Mos Annual Contributions -WPercent Participation We are encouraged and inspired by this increase in donations. Unfortunately, current Care to Share donations will only cover a small fraction of the need. Additional Assistance Available to Customers In addition to the Care to Share program, OWASA is grateful for utility bill support provided by community, local government, state, and federal funds. Given OWASA's legal limitations on the use of rate payer funds, this type of funding is critical to meeting community need while assuring that the reliability and resiliency of the community's water system is maintained. For the past five years, OWASA has actively sought opportunities to work with community partners to address the affordability of our services through our Affordability Outreach Program. It is the intention of this program to address long-term affordability issues through water conservation, water efficiency, and collaboration with community partners. This has taken the shape of co-sponsored programming, as well as support for complementary efforts. Most recently, we have and will provide support for applications for grant funding. We wrote a letter to NC state legislators supporting state funding for utility assistance (House Bill 1200). We have also written letters of support for Orange County's and the Town of Carrboro's applications for Community Development Block Grant—Coronavirus (CDBG-CV) funding. 6 Customer Assistance for OWASA Bills November 17, 2020 Page 5 Next Steps As the state and community settle into the new normal of the pandemic, OWASA prepares to resume standard collection practices. This will not be an easy transition. We are closely monitoring our finances, as well as the County's declaration of a State of Emergency to inform our decision making on when to resume standard collection practices. We intend to provide at least 30 days' notice to customers with past-due balances before resuming standard collection practices, after which a customer will have two months to pay their bill and/or establish an interest-free, fee-free payment plan with OWASA. OWASA will be offering extended(at least up to 18-month payment plans) for customers. We will proactively reach out to customers to encourage them to work with us on payment plans and to connect them to utility bill assistance funding. OWASA remains committed to the affordability of our services for all customers while maintaining the reliability and resiliency of the water and wastewater system. We are grateful for Orange County's ongoing efforts to provide assistance and welcome the opportunity to collaborate to assist those in our community who need utility bill assistance.