Over the past two years the city of Lodi has allowed customers to fall behind on paying their utility bills, with little consequence. The result is an enormous amount of delinquent debt.
But that could soon change.
The city council will be considering a range of options at their meeting tonight, which will affect how the city deals with delinquencies in the future, and how it will tackle the current mountain of unpaid utility bills.
Over the course of the pandemic, delinquent account balances have ballooned to over $12 million, a record, say city officials.
The city council voted to suspend its collection practices in March 2020, giving commercial and residential customers help in dealing with lockdowns, home confinement, and the painful economic impacts of the COVID-19 pandemic.
City staff is recommending the council return to pre-pandemic collection practices, which includes assessing late fees, suspending customer accounts, and shutting off power after 46 days of non-payment.
This option provides the “greatest financial stability to the utility and is a strong motivator for customers to pay,” say city officials. The recommended action also asks the council to accept state funding for delinquent amounts accrued in 2021. However, this option would require the city to refrain from shutting off customers who qualify for relief until January, 2023.
Another option being considered is similar to the first, but it would mean not suspending any services on any account until the 90-day moratorium for those receiving state relief funds ends. City staff fears this would allow delinquent amounts to grow even larger with no consequence for six months.
The city council could also opt to accept state relief funding on all calendar year 2021 residential delinquencies and delay suspension of all residential delinquent accounts only. Like the previous option, this would allow residential delinquencies to grow, but not commercial accounts.
The final option being considered is to refuse state funding altogether and to return to pre-pandemic collection practices. This choice would require customers to pay their bills in a timely fashion or face suspension, but otherwise eligible residential customers would receive no state relief funding. It would also end any further moratorium on service suspensions or special treatment of delinquent accounts.
The city currently has 24 accounts with delinquent balances exceeding $2,500. Four of them owe more than $5,000. There are 1,222 accounts who owe more than $3.2 million in total.
About $734,000 in account delinquencies would be eligible for the state relief program, if it is fully funded. That would leave the city with $2,486,456 in customer unpaid bills, after relief funds are applied.
City staff anticipates that much of the remaining debt will be uncollectible. In May, 2021 the city council authorized the use of federal pandemic money from the American Rescue Plan Act (ARPA) to be used to assist customers struggling to pay their utility bills. All that was required was for customers to apply for assistance and to show that they had suffered any loss of income from 2019 to 2020.
The program was mostly unused as customers were unwilling to make any effort to apply, say city staff, despite substantial advertising and promotional attempts to get the word out.
Last year the state provided state pandemic relief funds for electric, water and wastewater services, which covered utility delinquencies through calendar year 2020. No customer action was required.
There are currently 22,443 accounts with delinquent balances, across all three city utilities. There was a similar number of delinquent accounts before the pandemic, however, the past due total has more than doubled during the past two years.
The current delinquent total is $19,207,317, including all three utilities. In January of 2020 the total was $9,060,556.
The electric utility has the largest piece of the past due pie with over $12 million owing. Two years ago it was $4.8 million.
The water utility is carrying $1,699,02 in delinquent accounts. It was $917,596 at the start of 2020.
Lodi’s wastewater utility has $2,046,536 in delinquent account balances, up from $1,262,360 in January, 2020.
The Lodi City Council is slated to discuss this matter today starting at 7 p.m. at Carnegie Forum.