The Return of SB 998 Relative to Unpaid Water Bill Collection

08.05.2021

In  January 2020, public water districts across the State of California were working to implement policies and procedures to apply what was, at the time, a seismic shift in water bill collection procedures.  Senate Bill (“SB”) 998 had been adopted in 2018, and was effective February 1, 2020, requiring that public water systems that supplied water to more than 200 service connections (“Urban and Community Water Systems”) create and adopt modified water service discontinuation policies applicable to nonpayment of residential water service billings.

Central to those modified policies were requirements for outlining a plan for deferred payments, alternative payment schedules, formal mechanisms for a customer to contest or appeal a bill, and providing contact information to discuss a customer’s service and payment options.  The discontinuation policy was required to be made available in English, Spanish, Chinese, Tagalog, Vietnamese, Korean, and any other language spoken by at least 10% of the people residing within the Urban and Community Water System’s service area.

SB 998 (1) prohibited discontinuation of water service for nonpayment unless the customer has been delinquent for at least 60 days, (2) required telephone or written notice to the customer of record at least 7 business days before discontinuation of water service, and (3) implemented a number of restrictions on options available to water districts to deal with underpayment that were triggered by health and safety situations and for low-income customers. 

Presumably, in most instances, water districts were positioned on February 1, 2020, to implement these new procedures, with the first applicable unpaid water bills likely going out over the next month, and the first triggering of the new SB 998 within the 60 days following that.  As we now know, however, history had other plans.

On March 4, 2020, California Governor Gavin Newsom proclaimed a State of Emergency to exist in California as a result of the threat of COVID-19.  On April 2, 2020, Governor Newsom issued Executive Order (“EO”) N-42-20, which prohibited the discontinuation of residential service for non-payment of water bill since March 4, 2020, due to the COVID-19 Emergency.  Effectively, the Governor issued a proclamation that neutralized SB 998 for the duration of the emergency, leaving the new policies unused and untested.

Now, over a year later, on June 11, 2021, Governor Newsom has issued EO N-08-21, which, among other actions, declared that on September 30, 2021, the water shutoff restriction imposed by EO N-42-20 would expire—meaning that SB 998 will very soon become a reality once again for public water districts across the State.  To the extent your agency has not already done so, it may be time to dust off the procedures prepared by your agency in the days leading up to February 1, 2020, and again ready them for implementation.

While good news for public water districts with mounting unpaid water bills, such implementation may, of course, be impacted by allocations within the State’s Fiscal Year 2021/22 Budget, which have allotted $1 billion to reimburse water districts for the unpaid water bill debt of residential and commercial customers accrued during the COVID-19 Pandemic, defined as from March 4, 2020, to June 15, 2021.  Guidelines are anticipated soon from the State Water Resources Control Board (“SWRCB”) as to how applications can be made, and will be paid, out of such funds, after which water districts will—unless addressed by the SWRCB guidelines—be left with the challenge of how to fairly apply any such funds received to its delinquent accounts and how such application impacts its water shutoff procedures in place to encourage payment of water bills.

Moreover, for public water districts that either do not receive such State funds or do not receive amounts sufficient to fully mitigate unpaid water bills, special challenges may exist relative to the collection on some unpaid bills that, after nearly 18 months, may have ballooned into rather large unpaid balances.

Recognizing the challenges inherent in putting these pieces back to together, particularly in a world where the COVID-19 threat has not yet disappeared, we are ready to assist our clients with reviewing their policies and procedures for water shutoff and collection on delinquent water bills, and otherwise navigate the claim process ultimately developed by the SWRCB.