City Utility Bill Delinquency, Returning to Normal OperationsCity of Dubuque
City Council Meeting
Action Items # 2.
Copyrighted
July 19, 2021
ITEM TITLE: City Utility Bill Delinquency, Returning to Normal Operations
SUMMARY: City Manager recommending a process to use federal American Rescue
Plan Act (ARPA) funds to assist with certain overdue City utility accounts
and return the Water/City Utility Billing Department to normal operations.
SUGGESTED Suggested Disposition: Receive and File; Approve
DISPOSITION:
ATTACHMENTS:
Description Type
City Utility Bill Delinquency, Returning to Normal City Manager Memo
Operations-MVM Memo
Staff Memo Staff Memo
THE C
DUUB_-_*._TE
Masterpiece on the Mississippi
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: City Utility Bill Delinquency, Returning to Normal Operations
DATE: July 15, 2021
Dubuque
*Amrin Cia
2007-2012.2013
2017*2019
Housing and Community Development Director Alexis Steger and Utility Billing
Supervisor Rose Hoerner are recommending a process to use federal American
Rescue Plan Act (ARPA) funds to assist with certain overdue City utility accounts and
return the Water/City Utility Billing Department to normal operations.
The City of Dubuque suspended late pay fees and water -shut offs due to COVID-19.
The City continued to send delinquency notices to make sure residents were informed
that they were behind in payments, but no water -shut offs occurred. At the onset of
these changes, the City of Dubuque had approximately $300,000 in delinquent
payments. As of June 1, 2021, the amount of delinquent payments has increased to
over $675,000.
Staff has been reviewing options to return water billing and delinquency procedures
back to pre-COVID operations, with the least amount of hardship to those that
experienced COVID related losses. After review of the delinquent accounts there are
five categories of accounts:
1. Businesses (171)
2. Homeowners/Renters who have made payments since the beginning of COVID
(513)
3. Homeowners/Renters who have not made a payment since pre-COVID (128)
4. Residents Receiving Housing Assistance (52)
5. Homeowners/Renters who have overdue amounts but have executed a payment
plan with the City of Dubuque and are current with that plan (92)
As of June 1, 2021, there are 812 delinquent accounts in the first three categories listed
above who are overdue on their accounts and do not have a payment plan in place.
Several options were considered for potential funding from ARPA for delinquent utility
bills, for those affected by COVID-19. Unfortunately, analyzing who is affected by
COVID-19 requires significant labor hours and requires onerous applications from
residents to prove they were affected. The Housing and Community Development
Department reports that the #1 barrier to assisting those that needed assistance during
COVID-19 was the large amount of information residents had to provide to qualify for
assistance. The CARES Act Community Development Block Grant program for rent
and utility assistance required a greater allocation for staff labor hours than money was
provided to the community for the assistance. The State of Iowa is also reporting this
barrier while administering the same program, leaving millions of dollars unallocated to
residents still in need.
Due to this barrier alone, City Staff is recommending the City Council consider using
federal ARPA funding to assist with the payment of City utility bills from the March 2020
billing cycle through June 30, 2021, for categories 1-3 and 5 listed above after residents
have accessed any other funds available to them.
The 52 residents receiving housing assistance would not be eligible for this funding, due
to already being provided utility assistance with their housing assistance. This
assistance is calculated based on usage history and appliances in the unit. These
residents were also able to immediately report income losses and receive additional
assistance to offset the income loss; therefore, it is part of their required family
obligation per Federal Regulations to stay current with utility bills. This does not
preclude these families from applying for, and receiving, assistance from other
programs such as LIHEAP crisis funds and the State of Iowa Rent and Utility Assistance
or entering into a payment agreement with the Utility Billing Division. City staff have
also contacted all of these residents to provide information about assistance, and
several have already contacted utility billing to pay or enter into payment plan
agreements.
Water billing and delinquency operations that were suspended included the application
of a late fee after 30 days of delinquency and water shut-off on accounts over 31 days
and over $125 delinquent. City staff is requesting shut-off processes start again on
August 1, 2021, and that late fees continue to be suspended until the end of calendar
year 2021. Prior to August 1, staff will send written notices to those with delinquent
accounts. These notices would provide information about payment required as well as
a water shut-off date if no payment is received. Where phone numbers are available,
staff will also attempt outbound calls to notify residents and discuss payment plan
options. All residents are eligible for payment plan options and, if the City Council
approves, funding from ARPA for portions of their bill incurred during COVID-19
shutdowns.
The delinquency and shutoff notices, that will start in July 2021, would be tiered to allow
City Staff the ability to field phone calls, set up payment plans and work through the
funding options with each resident. This tiered approach also allows any water shut -offs
to be managed within the capacity of the Water Department. Water shut -offs are the
last resort for residents that are non -responsive to all other attempts to assist the
resident with payment of their accounts. The recommended tiered approach is:
1. Accounts that have not made a payment since February 2020 (128).
2. All other impacted accounts, given notice through the remainder of the
calendar year and sorted by billing cycle.
2
The Public Information Office will start advertising resuming normal water billing
operations prior to delinquency and water -shut off notices being distributed. Additional
information will be released should the City Council approve an ARPA funded program
for assisting with City utility bills.
This is a significant undertaking for City staff. Support for answering phone calls, taking
payments, applying funding and setting up payments plans will be required. Water
shut -offs and turn-ons will be managed with current Water Department staff.
It is anticipated that once notified that disconnects are being reinstated, many residents
will enter a payment plan or pay their overdue amount in full. If none of the 812 overdue
accounts did so, the budget impact would be approximately $675,000. Federal
American Rescue Plan Act funds could be the source of funds for this amount should
City Council agree.
Not reinstating late fees until the end of calendar year 2021 will have some budget
impact on the Water enterprise fund. Sixty-three thousand dollars ($63,000) was
budgeted for late fee revenue in FY22, and a significant portion of this will not be
realized if late fees are not collected for six months.
I respectfully recommend approval of the recommendation for the funding of delinquent
City utility accounts for usage between March 1, 2020 and June 30, 2021, using federal
American Rescue Plan Act funds after all other options have been exhausted and that
the City not reinstate late fees until the end of calendar year 2021, to give those
impacted appropriate time to pay bills for actual utilities used without being negatively
impacted by additional late fees. Normal operations for water billing and delinquencies
would then return to pre-COVID operations on August 1, 2021.
Mic ael C. Van Milligen
MCVM:jh
Attachment
cc: Crenna Brumwell, City Attorney
Cori Burbach, Assistant City Manager
Teri Goodmann, Director of Strategic Partnerships
Alexis Steger, Housing and Community Development Director
Jenny Larson, Finance and Budget Director
Rose Hoerner, Utility Billing Supervisor
Christopher Lester, Water Department Manager
William O'Brien, Water & Resource Recovery Center Manager
John Klostermann, Public Works Director
Anderson Sainci, Resource Management Coordinator
Gus Psihoyos, City Engineer
Deron Muehring, Civil Engineer
3
THE CITY OF
DUB E
Masterpiece on the Mississippi
TO: Michael C. Van Milligen, City Manager
FROM: Alexis Steger, Housing and Community Development Director
Rose Hoerner, Utility Billing Supervisor
DATE: July 13, 2021
RE: City Utility Bill Delinquency, Returning to Normal Operations
Dubuque
All•Merisa 6i�
2007-2012.2013
2017*2019
INTRODUCTION
The purpose of this memo is to recommend a process to use American Rescue
Plan Act (ARPA) funds to assist with certain overdue utility accounts and return the
Water/City Utility Billing department to normal operations.
BACKGROUND
The City of Dubuque suspended late pay fees and water -shut offs due to COVID-
19. The City continued to send delinquency notices to make sure residents were
informed that they were behind in payments, but no water -shut offs occurred. At the
onset of these changes, the City of Dubuque had approximately $300,000 in
delinquent payments. As of June 1, 2021 the amount of delinquent payments has
increased to over $675,000.
DISCUSSION
Staff has been reviewing options to return water billing and delinquency procedures
back to pre-COVID operations, with the least amount of hardship to those that
experienced COVID related losses. After review of the delinquent accounts there
are five categories of accounts:
1. Businesses (171)
2. Homeowners/Renters who have made payments since the beginning of
COVID (513)
3. Homeowners/Renters who have not made a payment since pre-COVID (128)
4. Residents Receiving Housing Assistance (52)
5. Homeowners/Renters who have overdue amounts but have executed a
payment plan with the City of Dubuque and are current with that plan (92)
1
As of June 1, 2021; there are 812 delinquent accounts in the first three categories
listed above who are overdue on their accounts and do not have a payment plan in
place.
Several options were considered for potential funding from ARPA for delinquent
utility bills, for those affected by COVID-19. Unfortunately, analyzing who is affected
by COVID-19 requires significant labor hours and requires onerous applications
from residents to prove they were affected. The Housing and Community
Development Department reports that the #1 barrier to assisting those that needed
assistance during COVID-19 was the large amount of information residents had to
provide to qualify for assistance. The CARES Act Community Development Block
Grant program for rent and utility assistance required a greater allocation for staff
labor hours than money was provided to the community for the assistance. The
State of Iowa is also reporting this barrier while administering the same program,
leaving millions of dollars unallocated to residents still in need.
Due to this barrier alone, City Staff is recommending the City Council consider
using ARPA funding to assist with the payment of water utility bills from the March
2020 billing cycle through June 30, 2021 for categories 1-3 and 5 listed above after
residents have accessed any other funds available to them.
Residents receiving housing assistance would not be eligible for this funding, due to
already being provided utility assistance with their housing assistance. This assistance
is calculated based on usage history and appliances in the unit. These residents were
also able to immediately report income losses and receive additional assistance to
offset the income loss; therefore, it is part of their required family obligation per Federal
Regulations to stay current with utility bills. This does not preclude these families from
applying for, and receiving, assistance from other programs such as LIHEAP crisis
funds and the State of Iowa Rent and Utility Assistance or entering into a payment
agreement with the Utility Billing Division. City staff have also contacted all of these
residents to provide information about assistance, and several have already contacted
utility billing to pay or enter into payment plan agreements.
Water billing and delinquency operations that were suspended included the
application of a late fee after 30 days of delinquency and water shut-off on accounts
over 31 days and over $125 delinquent. City staff is requesting shut-off processes
start again on August 1, 2021, and that late fees continue to be suspended until the
end of calendar year 2021. Prior to August 1, staff will send written notices to those
with delinquent accounts. These notices would provide information about payment
required as well as a water shut-off date if no payment is received. Where phone
numbers are available, staff will also attempt outbound calls to notify residents and
discuss payment plan options. All residents are eligible for payment plan options
and, if the City Council approves, funding from ARPA for portions of their bill
incurred during COVID-19 shutdowns.
2
Residents eligible for shutoff due to an overdue account will have approximately 3-4
weeks from the date they receive a disconnect notice to contact the City to arrange
payment or a payment plan. Some "crisis" funding sources available from other
institutions, such as;
1. LIHEAP Utility Crisis Program — HACAP
2. State of Iowa Rent and Utility Assistance Program — HACAP
3. County of Dubuque General Relief Funds — CSEI
require disconnect notices before they can be accessed. City staff will work with
these agencies to ensure that if a resident is in the process of applying for crisis
funding, they are not disconnected until this application process has been
completed and utilized if possible.
Additionally, the State of Iowa Rent and Utility Assistance Program is under-utilized due
to the barriers described above; however, the process of review is taking several
months for some applicants. Forty (40) City of Dubuque Residents have applied and the
applications are still in the queue for review, some applications as old as 60 days. Eight
City of Dubuque Residents have received assistance with Water Utility Bills in the
amount of $3,275. The amount applied for in the City of Dubuque for Water Utility bills
under this program is $26,391; most of which is pending review of applications. City
Staff will continue to work with those applying for this assistance prior to executing a
water shut-off for non -pay.
The delinquency and shutoff notices, that will start in July 2021, would be tiered to
allow City Staff the ability to field phone calls, set up payment plans and work
through the funding options with each resident. This tiered approach also allows
any water shut -offs to be managed within the capacity of the Water Department.
Water shut -offs are the last resort for residents that are non -responsive to all other
attempts to assist the resident with payment of their accounts. The recommended
tiered approach is:
1. Accounts that haven't made a payment since February 2020 (128).
2. All other impacted accounts, given notice through the remainder of the
calendar year and sorted by billing cycle.
The Public Information Office will start advertising resuming normal water billing
operations prior to delinquency and water -shut off notices being distributed.
Additional information will be released should the City Council approve a ARPA
funded program for assisting with City utility bills.
This is a significant undertaking for City staff. Support for answering phone calls,
taking payments, applying funding and setting up payments plans will be required.
Water shut -offs and turn-ons will be managed with current Water Department staff.
3
BUDGET IMPACT
We anticipate that once notified that disconnects are being reinstated, many
residents will enter a payment plan or pay their overdue amount in full. If none of
the 812 overdue accounts did so, the budget impact would be approximately
$675,000. American Rescue Plan Act (ARPA) funds could be the source of funds
for this amount should City Council agree.
Not reinstating late fees until the end of calendar year 2021 will have some budget
impact on the Water enterprise fund. $63,000 was budgeted for late fee revenue in
FY22, and a significant portion of this will not be realized if late fees are not
collected for six months.
RECOMMENDATION
We respectfully request City Council consideration for the funding of delinquent
water utility accounts for usage between March 1, 2020 and June 30, 2021
using ARPA funds after all other options have been exhausted. We further
recommend that City Council not reinstate late fees until the end of calendar
year 2021, to give those impacted appropriate time to pay bills for actual utilities
used without being negatively impacted by additional late fees. Normal
operations for water billing and delinquencies would then return to pre-COVID
operations on August 1, 2021.
cc: Crenna Brumwell, City Attorney
12