The City Council on Monday is expected to restore utility shut-offs for late payments and provide some relief to customers with past due bills.
City officials have been struggling to figure out how to collect $7.7 million in late fees owed to the utility since the pandemic began.
If the council approves an item on Monday’s agenda, utility residential shut-offs would resume in September for commercial buildings and in October for residential accounts.
The council will also consider increasing the maximum one-time per year electric bill relief for low-income customers facing shut-off for nonpayment from $100 to $200.
“The bottom of the barrel in terms of societal response are things like eviction and turning off the power,” said Allison Henry. “And so, when I think about the city of Pasadena … I understand they’ve got to start planning and all this. It just seems like they should be thinking more about how to access additional funds.”
PWP General Manager Gurcharan Bawa will also extend the time period for utility bill payment plans from the currently offered maximum of nine months to up to 12 months for customers who are financially impacted by COVID-19 and where evidence of particular hardship is provided; and, apply deposits to outstanding utility bills.
Using the deposits would recover at least $1 million.
Chamber of Commerce President and CEO Paul Little said he hopes the council extends the payment time for late payments to 24 or 36 months.
“If they expect that people are going to be able to basically write them a check for 18 months worth of utilities that’s pretty unrealistic,” Little said.
In mid-February, late payments totaled $7.7 million, but now that has ballooned to over $8 million and does not include late fees which are currently not being collected.
“At some point in time, we will have to resume the utility shutoffs for nonpayments,” Bawa told the council’s Finance Committee in February. “We remain committed to the service of our customers. They are the reason we exist, but an increasing amount of nonpayments has a fiscal impact and would limit our ability to operate. It is not sustainable. We are carefully evaluating the impact of different actions.”
According to a city report, there has been an 816% increase in accounts delinquent for 61 days or more for an amount totaling $7.7 million, up from $841,179 in January 2020.
All told, 16,708 residential customers and 3,544 commercial customers are delinquent on their accounts.
“With some businesses closing and residential customers moving out of Pasadena, PWP will likely experience considerably higher bad debt expense,” according to the staff report. “While PWP is continuing to incur expenses to provide water and power to all customers irrespective of their payment status, the increasing amount of unpaid bills is making this arrangement fiscally unsustainable.”
Last year, the City Council took several actions to help customers impacted by the pandemic, including refunding two years of Utility Underground Surtax.
The council also voted to suspend the Utility Underground Surtax collection for six months, suspend late fees until further action by the council, and suspend utility shut-offs due to nonpayment until further action by the council.
“While the suspension of late fees and utility shut-offs provides a temporary measure of relief, it does not relieve customers of their obligation to pay utility bills,” the staff report reads.