DATE: July 19, 2016
TO: Mayor and City Council
FROM: Director of Utilities and Environmental Services
SUBJECT
Title
Report and Special Assessment for Delinquent Sewer Bills and Water Bills Incurred by Property Owners
End
RECOMMENDATION
Recommendation
That Council adopts the attached resolution (Attachment I) confirming the report and assessment for delinquent water bills and sewer bills, and authorizing the delinquent charges to become a special assessment against the properties if not paid by August 1, 2016.
Body
BACKGROUND
The City provides water and sewer services to almost all residents and businesses within the City limits. The exceptions are a small number of properties that receive water service from the East Bay Municipal Utility District or sewer service from Oro Loma Sanitary District. In addition to in-City customers, Hayward provides sewer service to about 900 “sewer only” customers, mainly located in unincorporated Alameda County, as well as water or sewer service to a number of other customers outside of the City limits. Hayward issues bimonthly billings for water and sewer service, after the service has been provided. The Hayward Municipal Code states that responsibility for water and sewer bills lie with the person or entity that requested service, i.e., the account holder of record. For sewer-only accounts, however, ultimate responsibility rests with the property owner, regardless of the name on the account.
While the vast majority of customers pay their water and sewer bills in a timely way, there are some past due accounts that become subject to collection, including late notices and fees. The most effective collection measure available to the City is to discontinue water service for unpaid charges. However, the City has no ability to shut off water to sewer-only customers and it is not feasible to discontinue sewer service. With respect to multi-family customers, discontinuing water service would leave tenants without water, in most cases through no fault of their own. In November 2012, Council approved ordinances allowing for the collection of delinquent water and sewer bills as special assessments on property tax bills. The ordinances apply to accounts that are at least sixty days in arrears as of March 1 and provides the City with a strong tool to collect delinquent charges from property owners that receive sewer service only from the City and from owners of multi-family properties. The ordinances are intended for use as a last resort, in addition to remedies that already exist.
DISCUSSION
Delinquent water and sewer service charges that would be placed on the property tax rolls are comprised of all charges in arrears by sixty days or more as of March 1, 2016, a fifty dollar administrative fee charged by the City, and a 1.7% administrative fee charged by the Alameda County Assessor’s Office. As of the date of this writing, a total of forty-five affected property owners, some with multiple accounts in arrears, owe a total of $43,286.50 in unpaid sewer and water charges, plus an additional $3,024.12 in administrative fees, as listed on Attachment II. If not paid by August 1, 2016, the unpaid charges and administrative fees will become a special assessment against the property and will appear on each property owner’s tax bill later this year. By comparison, at this time last year, forty-one property owners owed a total of $32,072.78, and the previous year, fifty-one property owners owed a total of $64,547.43, including all fees. As in previous years, last year some property owners paid off their delinquent balance after the City Council action, so that the final list transmitted to the County Assessor included thirty-two properties owing a total of $22,696.59.
Staff mailed formal notices to each affected property owner in March, April and May. Property owners were provided with an opportunity to schedule an administrative hearing if they disagreed with the charges or their responsibility for paying them, but no requests for hearings were received.
To give the Council a sense of the impact of the ordinances, the first formal letter was sent to 112 account holders, with total delinquent charges of $78,220.11. The attached list includes forty-five parcels, with charges totaling $43,286.50, which means that $34,933.61 has been collected that otherwise may not have been paid. Based on the experience of the past few years, it is expected that the final list should include fewer properties owing less money.
ECONOMIC IMPACT
The properties that are affected by this action are summarized in the following table:
|
Number of Parcels |
Amount Owed |
|
34 |
Less than $500 |
|
3 |
$500 - $1000 |
|
3 |
$1,000 - $2,000 |
|
5 |
$2,000 - $10,000 |
|
Total: 45 |
$43,286.50 |
To the extent that the City recovers and discourages delinquencies, all rate payers will enjoy the benefits in slightly overall future rate increase requirements.
FISCAL IMPACT
There is no negative fiscal impact to the City as cost recovery occurs through administrative fees. Recovery of these outstanding charges improves the fiscal health of the Water and Wastewater Operating Funds, which benefits all rate payers.
PUBLIC CONTACT
In addition to the three notices sent directly to property owners, a notice of the City Council’s scheduled confirmation of this report was published in the Daily Review on July 8, 2016.
NEXT STEPS
The City will continue to accept payments until August 1, 2016. After that date, the list will be finalized and forwarded to the Alameda County Assessor’s Office by August 10, in accordance with the County’s schedule.
Prepared by: Jennifer Yee, Sustainability Technician
Staff contact
Recommended by: Alex Ameri, Director of Utilities and Environmental Services
end
Approved by:
Fran David, City Manager
Attachments:
|
Attachment I |
Draft Resolution |
|
Attachment II |
List of Delinquent Water and/or Sewer Charges to be Special Assessed |