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AGENDA ITEM REVIEW FORM |
3.B.
Special City Council Meeting
- Meeting Date:
- 04/29/2020
- Department Head:
- Jorge Perez
- Submitted By:
- Jorge Perez, Billing & Collections Manager, Finance Department, Billing & Collections
Action Requested:
Motion
Resolution
Resolution
ITEM:
Discussion and possible action on any and all matters regarding Resolution No. 2127. A resolution of the Mayor and City Council of the City of San Luis, Arizona, suspending imposition of late penalty charge on water utility accounts; suspending shut-off of water service for non-payment; and suspending imposition of shut-off fee due to the declared COVID-19 emergency; repealing any conflicting provisions; providing for severability; and declaring an emergency. (Jorge Perez, Billing & Collections Manager)
SUMMARY:
Background
During the recent city budget meetings, the City Council expressed a desire to suspend late charges for past due utility accounts during the period of emergency due to the coronavirus disease 2019 (COVID-19) pandemic. The Mayor and Council have issued emergency declarations, and Governor Ducey has issued statewide emergency declarations as a result of the pandemic. Because the COVID-19 pandemic necessitated limiting non-essential services and stay-at-home orders, there is a rise in unemployment. The residents of San Luis are experiencing material economic difficulties. The City Council has indicated that during this time, staff refrain from shutting off water services due to non-payment.
The Law
A.R.S. § 9-511 authorizes cities to be in the water utility business. There are procedural requirements to increase fees under A.R.S. § 9-511.01, but not to decrease them.
Fees and charges that cities impose must be reasonable. Cities also have a fiduciary duty to the public’s treasury. The Arizona Constitution, Article 9, Section 7 says that no “. . . city, shall ever give or loan its credit in the aid of, or make any donation or grant, by subsidy or otherwise, to any individual, association, or corporation.”
However, suspending late charges is not giving away free water because the regular charges, which are set on the cost to provide service, remain. Therefore, any suspension is not a gift of free water.
The Resolution
From March 13, 2020 (the date of the first emergency declaration and order) to the earlier of September 1, 2020, or the end of the emergency order period, the resolution provides for:
During the recent city budget meetings, the City Council expressed a desire to suspend late charges for past due utility accounts during the period of emergency due to the coronavirus disease 2019 (COVID-19) pandemic. The Mayor and Council have issued emergency declarations, and Governor Ducey has issued statewide emergency declarations as a result of the pandemic. Because the COVID-19 pandemic necessitated limiting non-essential services and stay-at-home orders, there is a rise in unemployment. The residents of San Luis are experiencing material economic difficulties. The City Council has indicated that during this time, staff refrain from shutting off water services due to non-payment.
The Law
A.R.S. § 9-511 authorizes cities to be in the water utility business. There are procedural requirements to increase fees under A.R.S. § 9-511.01, but not to decrease them.
Fees and charges that cities impose must be reasonable. Cities also have a fiduciary duty to the public’s treasury. The Arizona Constitution, Article 9, Section 7 says that no “. . . city, shall ever give or loan its credit in the aid of, or make any donation or grant, by subsidy or otherwise, to any individual, association, or corporation.”
However, suspending late charges is not giving away free water because the regular charges, which are set on the cost to provide service, remain. Therefore, any suspension is not a gift of free water.
The Resolution
From March 13, 2020 (the date of the first emergency declaration and order) to the earlier of September 1, 2020, or the end of the emergency order period, the resolution provides for:
- The city will not shut-off of water due to non-payment.
- The city will not charge past-due accounts, the late charge on the water. (The late charge is 10% assessed the day after it is due. The late charge is calculated on the water charge, not the total utility bill.)
- The city will not charge the shut-off fee.
RECOMMENDATION / SUGGESTED MOTION:
I MOVE TO APPROVE RESOLUTION NO. 2127.
Fiscal Impact
- IS THERE FISCAL IMPACT ASSOCIATED WITH THIS ITEM:
- YES
- CITY/STATE/FEDERAL FUNDS:
- CITY
- TOTAL:
- N/A
- BUDGETED AMOUNT:
- N/A
- AVAILABLE AMOUNT TO TRANSFER:
- N/A
- ACCT NAME & GL#/REMAINING BALANCE BEFORE PURCHASE:
- N/A
FISCAL IMPACT STATEMENT (IF THIS IS A BUDGET TRANSFER, YOU MUST ATTACH THE BUDGET ADJUSTMENT FORM):
The fiscal impact is unknown, and will be determined by the amount of customers that fall behind in their utility bill and that will not be charged that additional penalty fee.
As stated in the summary, suspending late charges is not giving away free water. The regular charges, which are set on the cost to provide service, remain in full force.
As stated in the summary, suspending late charges is not giving away free water. The regular charges, which are set on the cost to provide service, remain in full force.