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Item No. 10.
| MEETING DATE: 04/04/2022 |
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| TO: | HONORABLE MAYOR AND COUNCILMEMBERS |
| FROM: | JIM SADRO, CITY MANAGER By: Elias Saykali, Public Works Director |
| SUBJECT: | APPROVE ENROLLMENT IN CALIFORNIA'S LOW-INCOME HOUSEHOLD WATER ASSISTANCE PROGRAM AND EXECUTION OF AN AGREEMENT WITH HORNE, LLP FOR FUNDING DISBURSEMENT
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RECOMMENDATION:
That the City Council:
A. Approve and authorize staff to enroll the City in California's Low-Income Household Water Assistance Program (LIHWAP), and
B. Approve and authorize the City Manager to execute an agreement with HORNE, LLP to serve as a third party funds disbursement partner for the California Department of Community Services and Development (CSD).
DISCUSSION:
On December 27, 2020, the Consolidated Appropriations Act was signed into law and appropriated $638 million to LIHWAP. On March 11, 2021, the American Rescue Plan Act provided an additional $500 million appropriation to LIHWAP. LIHWAP is administered at the federal level by the U.S. Department of Health and Human Services (HHS).
The California Department of Community Services and Development (CSD) was designated by Governor Newsom to develop and administer Program Guidelines for the federal LIHWAP Fiscal Year 2022-24, offering a framework for a one-time federally funded relief program providing assistance to low-income households to reduce water and wastewater arrearages prior to and during the COVID-19 pandemic. HHS approved California's LIHWAP State Plan on November 8, 2021.
California is the nation's most populous state, with nearly 40 million residents. Nearly one-third of the population lives in households with incomes below $50,000 a year, or approximately 200 percent of the federal poverty level for a family of four. The cost of drinking water and wastewater treatment can vary widely across the state, and variance in rates is mainly attributable to factors such as quality of water sources, treatment needs, economies of scale, historical system maintenance, and capital investment. In both urban and rural communities, financially challenged households struggle to pay water and wastewater bills. Data collected in 2019 by the State Water Resources Control Board (SWRCB) shows that at least 500,000 Californians experienced water shutoffs due to nonpayment and hundreds of water purveyors charge rates that could be classified as unaffordable for low-income households.
To address the overwhelming need for financial assistance, the 2021-22 State Budget appropriated $1 billion in federal American Rescue Plan Act funding to establish the California Water and Wastewater Arrearage Payment Program (CWWAPP), providing relief to community water and wastewater systems for unpaid bills related to the pandemic that accrued during the pandemic relief period from March 4, 2020, to June 15, 2021. On behalf of those customers who accrued arrearages during the pandemic relief period, the City has submitted for, and received, approximately $200,000 in funding. The federal funding provided under LIHWAP will serve as a complimentary program resource to CWWAPP by offering another form of potential assistance to low-income households continuing to experience difficulty making payments for residential water and wastewater services.
To meet the federal requirement that benefits must be paid directly to owners and operators of public systems, California's implementation of LIHWAP requires that benefits are issued to eligible households whose community water system, wastewater treatment provider, or wastewater billing entity are enrolled in the program to receive LIHWAP assistance benefits (payments) directly from CSD via its third-party funds disbursement partner (HORNE LLP). CSD partners with a network of non-profit and local government organizations (commonly referred to as Local Service Providers [LSPs}) dedicated to reducing poverty by helping low-income individuals and families. LSPs are directly responsible for local administration of the LIHWAP program, conducting outreach and promoting program awareness to low-income households, conducting eligibility determination, and responding to and resolving customer complaints.
LSPs outreach will be based primarily on referrals from Low-Income Household Energy Assistance Program (LIHEAP). Water and wastewater system operators, such as La Habra, are encouraged to post a customer-facing LIHWAP webpage which has been prepared by CSD. Low-income households will be able to apply for services directly through the LSP. The LSPs will begin accepting applications from eligible households by May 2022 or no later than June 2022. The program will operate through August 31, 2023, with a maximum, one-time benefit of up to $2,000 per household (on a first-come, first-served basis until funding is depleted) with the goal of restoring or preventing service disconnections. To comply with federal reporting, the City must track and report the amount of assistance credited to each account, and whether assistance restored water services or prevented disconnection, if applicable.
The California Department of Community Services and Development (CSD) was designated by Governor Newsom to develop and administer Program Guidelines for the federal LIHWAP Fiscal Year 2022-24, offering a framework for a one-time federally funded relief program providing assistance to low-income households to reduce water and wastewater arrearages prior to and during the COVID-19 pandemic. HHS approved California's LIHWAP State Plan on November 8, 2021.
California is the nation's most populous state, with nearly 40 million residents. Nearly one-third of the population lives in households with incomes below $50,000 a year, or approximately 200 percent of the federal poverty level for a family of four. The cost of drinking water and wastewater treatment can vary widely across the state, and variance in rates is mainly attributable to factors such as quality of water sources, treatment needs, economies of scale, historical system maintenance, and capital investment. In both urban and rural communities, financially challenged households struggle to pay water and wastewater bills. Data collected in 2019 by the State Water Resources Control Board (SWRCB) shows that at least 500,000 Californians experienced water shutoffs due to nonpayment and hundreds of water purveyors charge rates that could be classified as unaffordable for low-income households.
To address the overwhelming need for financial assistance, the 2021-22 State Budget appropriated $1 billion in federal American Rescue Plan Act funding to establish the California Water and Wastewater Arrearage Payment Program (CWWAPP), providing relief to community water and wastewater systems for unpaid bills related to the pandemic that accrued during the pandemic relief period from March 4, 2020, to June 15, 2021. On behalf of those customers who accrued arrearages during the pandemic relief period, the City has submitted for, and received, approximately $200,000 in funding. The federal funding provided under LIHWAP will serve as a complimentary program resource to CWWAPP by offering another form of potential assistance to low-income households continuing to experience difficulty making payments for residential water and wastewater services.
To meet the federal requirement that benefits must be paid directly to owners and operators of public systems, California's implementation of LIHWAP requires that benefits are issued to eligible households whose community water system, wastewater treatment provider, or wastewater billing entity are enrolled in the program to receive LIHWAP assistance benefits (payments) directly from CSD via its third-party funds disbursement partner (HORNE LLP). CSD partners with a network of non-profit and local government organizations (commonly referred to as Local Service Providers [LSPs}) dedicated to reducing poverty by helping low-income individuals and families. LSPs are directly responsible for local administration of the LIHWAP program, conducting outreach and promoting program awareness to low-income households, conducting eligibility determination, and responding to and resolving customer complaints.
LSPs outreach will be based primarily on referrals from Low-Income Household Energy Assistance Program (LIHEAP). Water and wastewater system operators, such as La Habra, are encouraged to post a customer-facing LIHWAP webpage which has been prepared by CSD. Low-income households will be able to apply for services directly through the LSP. The LSPs will begin accepting applications from eligible households by May 2022 or no later than June 2022. The program will operate through August 31, 2023, with a maximum, one-time benefit of up to $2,000 per household (on a first-come, first-served basis until funding is depleted) with the goal of restoring or preventing service disconnections. To comply with federal reporting, the City must track and report the amount of assistance credited to each account, and whether assistance restored water services or prevented disconnection, if applicable.
FISCAL IMPACT/SOURCE OF FUNDING:
There is no impact to the General Fund. The City's Water and Sewer Enterprise Funds will receive reimbursement for billed utility services via a third party administrator (HORNE LLP) for qualified low-income households who enroll in this program. Each qualified household may be eligible to receive up to $2,000 in assistance from the LIHWAP program to help offset the costs of their local water and wastewater utility services. The LIHWAP is modeled after the Low-Income Household Energy Assistance Program (LIHEAP) which has provided assistance to 209 La Habra households.
GENERAL PLAN RELEVANCE:
WS 1.2 Reliable Supply and Cost-Effective Distribution