Residential and Commercial Customers Owe City $7.7 million in Back Utility Payments

The city has seen a  massive increase in unpaid bills to the city’s Water and Power Department over the last 12 months.

According to a report in the City Council’s Finance Committee agenda, there has been an 816% increase in accounts delinquent for 61 days or more for an amount totaling $7.7 million in outstanding balances, 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 a city 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.”

The Finance Committee will receive an update on COVID-19 impacts and other potential fiscal problems being experienced by the city’s utility at 2 p.m. Wednesday, Feb 16. 

The meeting can be viewed at http://pasadena.granicus.com/mediaplayer.php?camera_id=2&publish_id=9 a.

PWP is considering going to the City Council for action regarding mounting delinquencies and potential financial impacts to the utility.

“PWP recognizes that customers are being impacted by the pandemic and that is why we continue to suspend disconnects and late fees,” said Margie Otto, PWP spokesperson. “However, customers should continue to pay their balance to keep it manageable and PWP is here to help and offers payment plans to both residential and commercial customers.”

Possible actions include applying deposits to delinquent utility account balances in order to reduce arrears and improve fiscal year (FY) 2021 net income for Water and Power funds, amending the FY2021 operating budgets for the Water, Light and Power, Refuse and Sewer Funds to increase the bad debt expense in each fund for the anticipated growth in uncollectible accounts receivable, pursuing liens for outstanding payments, resuming assessment of late fees on a date to be determined and resuming utility shut-offs for non-payment on a date to be determined.

So far, 6,400 reminder to pay letters have been sent to delinquent customers.

Last year, the City Council took several actions to help customers impacted by the pandemic, including refunding two years of Utility Underground Surtax. The City Council also voted to suspend the Utility Underground Surtax collection for six months, suspend late fees until further action by the City Council, and suspend utility shut-offs due to non-payment until further action by the City 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,” a city staff report reads. 

“Since April 2020, the amount of unpaid utility bills has gradually increased to over $7.7 million as of January 31, 2021. These arrears are about 816% higher than the pre-pandemic times and are increasing considerably each month. As the utility bill arrears increase, it will become even more difficult for some customers to pay the outstanding amount.”