REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF BOARD GOVERNED COUNTY SERVICE AREAS
AND RECORD OF ACTION
December 19, 2023
FROM
BRENDON BIGGS, Director, Department of Public Works - Special Districts
SUBJECT
Title
California Extended Water and Wastewater Arrearage Payment Program
End
RECOMMENDATION(S)
Recommendation
Acting as the governing body of County Service Area 42 - Oro Grande, County Service Area 53B - Fawnskin, County Service Area 64 - Spring Valley Lake, County Service Area 70 CG - Cedar Glen, County Service Area 70 GH - Glen Helen, County Service Area 70F - Morongo Valley, County Service Area 70J - Oak Hills, County Service Area 70 S-3 - Lytle Creek, County Service Area 70 SP-2 - Oak Hills, County Service Area 70 W-3 - Hacienda, County Service Area 70 W-4 - Pioneertown, and County Service Area 82 - Trona:
1. Approve and authorize the submission of California Extended Water and Wastewater Arrearage Payment Program applications to the State Water Resources Control Board for water and wastewater arrearages incurred and outstanding by customers of the respective County Service Areas during the period of June 16, 2021 through December 31, 2022.
2. Approve the Conditions of Payment Form, which includes non-standard terms, for the California Extended Water and Wastewater Arrearage Payment Program.
3. Authorize the Director of the Department of Public Works or the Assistant Director of the Department of Public Works - Special Districts to execute and submit the California Extended Water and Wastewater Arrearage Payment Program applications and any other necessary documents or subsequent non-substantive amendments, subject to review by County Counsel.
4. Direct the Director of Department of Public Works to transmit the California Extended Water and Wastewater Arrearage Payment Program applications to the Clerk of the Board within 30 days of execution.
(Presenter: Brendon Biggs, Director, 387-7906)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Operate in a Fiscally-Responsible and Business-Like Manner.
Pursue County Goals and Objectives by Working with Other Agencies and Stakeholders.
Focus on Recovery and Resiliency Following Major Emergency Responses such as the December 2, 2015 Terrorist Attack (SB Strong) and the Global COVID-19 Pandemic.
FINANCIAL IMPACT
Approval of this item will not result in the use of Discretionary General Funding (Net County Cost). If the California Extended Water and Wastewater Arrearage Payment Program (Program) applications are successful, the Department of Public Works - Special Districts (Department) will return to the Board of Supervisors (Board) for acceptance of the Program funds and approval of related budget adjustments as necessary. Funding received will be used to credit customer accounts identified as having unpaid bills for billing periods between June 16, 2021, through December 31, 2022. The Program does not require any local matching funds.
The Department is analyzing financial information for completion of the Program applications, which are due to the State Water Resources Control Board (SWRCB) by December 31, 2023. The financial information being analyzed consists of customers’ unpaid water and wastewater charges for each of the applicable county service areas during the aforementioned period of June 16, 2021 through December 31, 2022. The Department currently estimates that the total request for Program funds could be as much as $597,000.
BACKGROUND INFORMATION
The Department, through its Water and Sanitation Division, operates and manages several water and wastewater systems throughout the unincorporated areas of the county.
The State of California’s declared state of emergency and the resulting COVID-19 stay at home orders had an adverse financial impact on community water and wastewater systems as it became difficult for many customers to pay their bills because of job loss and other hardships. Recognizing this, SWRCB created the California Water and Wastewater Arrearage Payment Program (CWWAPP) that provided $985 million statewide as relief to water and wastewater systems for revenues lost from unpaid bills due to pandemic. The CWWAPP initially prioritized residential and commercial drinking water arrearages, with remaining funding applied towards wastewater arrearages accrued between March 4, 2020 and June 15, 2021. All accounts with an outstanding balance during this period became eligible for this funding.
On March 15, 2022 (Item No. 50), the Board of Supervisors (Board) accepted CWWAPP funding totaling $237,901 from SWRCB for drinking water arrearages incurred and outstanding by customers for the Department’s respective water districts. Upon receipt of these funds, the Department immediately began crediting customer accounts for customer debt and COVID-19 related revenue loss accrued between March 4, 2020 through June 15, 2021.
On November 15, 2022 (Item No. 96), the Board accepted CWWAPP funding for wastewater systems totaling $472,268 from SWRCB for wastewater arrearages incurred and outstanding by customers for the Department’s respective wastewater districts. Upon receipt of these funds, the Department immediately began crediting customer accounts for customer debt and COVID-19 related revenue loss accrued between March 4, 2020 through June 15, 2021.
On July 10, 2023, the Governor of the State of California signed a budget trailer bill expanding the CWWAPP. The new Program extends the COVID relief period to December 31, 2022, with the state legislature allocating the remaining $600 million in federal funding for this Program. The Program includes both water and wastewater debt from residential and commercial customers. Applications are open for a 60-day period through December 31, 2023 to guarantee funding. Late applications will be accepted through January 31, 2024, however, they will not be guaranteed funding. With Board approval of this item, the Department fully anticipates that the applications will be submitted to SWRCB by the original due date of December 31, 2023.
Approval of this item will allow for submittal of Program applications to receive funding for water and wastewater arrearages and related revenue loss resulting from the COVID-19 pandemic. The Program applications also require certification and submission of a Conditions of Payment Form (Form), which contains language that differs from the County’s standard contract language as follows:
1. The Form requires the applicant to indemnify, defend, and save harmless the SWRCB, its officers, agents, and employees from any and all claims, losses, and liability arising out of or connected with any payment to the Applicant pursuant to the Program, including, but not limited to, the reasonable cost of any attorney fees and any associated court and trial costs. Additionally, no reciprocal indemnity is provided by the State to the applicant.
• The County standard contract indemnity provision requires the contracting party to indemnify, defend, and hold County harmless from third party claims arising out of the acts, errors or omissions of any person.
• Potential Impact: By agreeing to indemnify, the County Service Areas (CSAs), as applicants, could be contractually waiving the protection of sovereign immunity. Claims that may otherwise be barred against the County, time limited, or expense limited could be brought against the State without such limitations and the CSA’s would be responsible to defend and reimburse the SWRCB for costs, expenses, and damages, including attorneys’ fees, which could exceed the total Form amount.
The Department recommends approval of the Form, including the non-standard terms, in order to submit the Program applications as required by the SWRCB for water and wastewater arrearages incurred and outstanding by customers of the respective CSAs during the period of June 16, 2021 to December 31, 2022.
PROCUREMENT
Not applicable.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Aaron Gest, Deputy County Counsel, 387-5455) on November 27, 2023; Risk Management (Greg Ustaszewski, Staff Analyst, 386-9008) on December 6, 2023; Finance (Tom Forster, Administrative Analyst, 387-4635) on November 29, 2023; and County Finance and Administration (Paloma Hernandez-Barker, Deputy Executive Officer, 387-5423) on December 4, 2023.