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Home My WebLink About2020-09-15 Public hearingC= ,*a Notice of Public Hearing Notice is hereby given that a public hearing will be held by the City Council of Iowa City, Iowa, at 7:00 p.m., on the 151' day of September, 2020, in City Hall, Emma Harvat Hall, 410 E. Washington Street, Iowa City, Iowa, or if said meeting is cancelled, at the next meeting of the City Council thereafter as posted by the City Clerk; City Hall is currently closed to the public because of the coronavirus. If City Hall remains closed to the public, the meeting will be an electronic meeting using the Zoom Meetings Platform. For information on how to participate in the electronic meeting, see www.icgov.org/councildocs or telephone the City Clerk at 319/356-5043; at which hearing the Council will consider: Ordinance amending Title 3, "City Finances, Taxation and Fees", Chapter 4, "Schedule of Fees, Rates, Charges, Bonds, Fines and Penalties", Section 3, entitled "Potable Water Use and Service," of the City Code, to increase or change water service charges and fees in Iowa city, Iowa and amending Title 16, entitled "Public Works", Chapter 3A, entitled "General Provisions", Sections 5, 6 and 7, entitled "Establishing City Utility Accounts; Deposits Required", "Billing and Collection Procedures; Delinquent Accounts" and "Discontinuation and Restoration of Service" to make delinquent account collection fees and procedures more equitable and just. Copies of the proposed ordinance are on file for public examination in the office of the City Clerk, City Hall, 410 E. Washington St., Iowa City, Iowa. Persons wishing to make their views known for Council consideration are encouraged to appear at the above-mentioned time and place. Kellie Fruehling, City Clerk -T Prepared by: Dennis Bockenstedt, Finance Director, 410 E. Washington St., Iowa City, IA 52240 (319) 356-5053 ORDINANCE NO. 77 Ordinance amending Title 3, "City Finances, Taxation and Fees", Chapter 4, "Schedule of Fees, Rates, Charges, Bonds, Fines and Penalties", Section 3, entitled "Potable Water Use and Service," of the City Code, to increase or change water service charges and fees in Iowa city, Iowa and amending Title 16, entitled "Public Works", Chapter 3A, entitled "General Provisions", Sections 5, 6 and 7, entitled "Establishing City Utility Accounts; Deposits Required", "Billing and Collection Procedures; Delinquent Accounts" and "Discontinuation and Restoration of Service" to make delinquent account collection fees and procedures more equitable and just. WHEREAS, pursuant to Chapter 384, Code of Iowa (2013), the City of Iowa City is authorized to establish and provide for the collection of rates to pay for the City's utility systems, including the City's water supply and treatment system; and WHEREAS, the City's financial policies dictate that the Water fund shall be self-supporting; and WHEREAS, the City must endeavor to bill and collect utility fees and charges to support the operation, maintenance, and replacement of the City's utility systems and infrastructure; and WHEREAS, the City seeks to amend and modernize its delinquent account collection fees and procedures to make them more equitable and just; and NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA: SECTION I. AMENDMENT. Title 3, Chapter 4, Section 3, entitled "Potable Water Use and Service," of the City Code is hereby amended by adding the underlined text and deleting the strike -through text in the sections identified below as follows: 3-4-3: POTABLE WATER USE AND SERVICE: C 0 Description Of Fee, Charge, Amount Of Fee, Charge, yy Bond, Fine Or Penalty Bond, Fine Or Penalty i Deposit and delinquency fee for combined city water and/or sanitary sewer and/or solid waste collection accounts (see section 16-3A-5 of this code): f 106 percent delinquency charge on current billed portion of the outstanding amount on combined water and/or sanitary sewer and/or solid waste account that j is not paid within 22 days of billing date. j - — — w — — — Service Fees i Ordinance No. Page 2 Posting fee for shutting off water in collection procedure Reconnection fee for discontinuation of service Service Fee Fee During After Normal { Normal Working Working Hours I Hours' Q4"5; ^a^ be Not done E� I.Araiyed-eese iR after normal i working asset 0.00 hours l' $47.264 45.00 $88.20 SECTION II. AMENDMENT. Title 16, Chapter 3A, entitled "General Provisions," of the City Code is hereby amended by adding the underlined text and deleting the strike -through text as follows: 16-3A-5: ESTABLISHING CITY UTILITY ACCOUNTS; DEPOSITS REQUIRED: A. Upon establishing a water service account, a wastewater account and/or a residential solid waste collection account with the City, the person establishing an account, with the exception of a residential owner account, shall be required to make a combined account deposit for City services. The amount of this deposit shall be as provided in the schedule of fees, title 3, chapter 4 of this Code. Persons who have previously been required to post a delinquent deposit shall be required to make a combined and/or delinquent deposit before City services are provided. B. Required deposits shall be held until service is terminated and the account closed. At such time, the amount of the deposit shall be credited to the account or refunded to the account holder if the account is closed and paid in full. C. Upon reestablishing one or more accounts as set forth in subsection A of this section, the person establishing the account(s) shall be required to make an account deposit for City services. The amount of the deposit shall be as established in the schedule of fees, title 3, chapter 4 of this Code. Persons who have previously been required to post a delinquent deposit shall be required to make a combined and/or delinquent deposit before City services are provided. D. A delinquency deposit may be charged upon repeated delinquency of any water, wastewater or solid waste service account. Upon the occurrence of a third sesenddelinquency charge within the last three hundred sixty five (365) day period, the account holder shall be required to make a combined deposit equal to the average two (2) month billing for the account holder's account. The average two (2) month billing shall be based upon the actual billings during the prior twelve (12) month billing periods. If the account holder already has a combined deposit on file with the City, that deposit amount will proportionally reduce the delinquency deposit. The delinquency deposit can be waived if the account holder enrolls in SurePay. E. Delinquency deposits shall be held either three hundred sixty five (365) days after the deposit was paid or three hundred sixty five (365) days after the last occurrence of a delinquent account charge, whichever occurs last. At such time, the deposit shall be credited to the utility account. If service is terminated within three hundred sixty five (365) days of the delinquent account charge, the deposit shall be credited to the account or refunded if the account is paid in full. F. Prior to establishing an industrial water service account, the person establishing the account shall first execute a written agreement with the Department of Public Works. Such accounts shall be governed by chapter 3, article F, "Wastewater Treatment Works User Charges", of this title. (Ord. 18-4745, 4-17-2018, eff. 7-1-2018) 16-3A-6: BILLING AND COLLECTION PROCEDURES; DELINQUENT ACCOUNTS: A. Delinquency: 1. Billings for services provided to properties for any one service period, as defined by regulations established by the city and approved by resolution of the city council, shall be submitted to account holders within thirty (30) calendar days after the end of the billing period and shall be due and payable within fifteen (15) calendar days after the date of the billing. (1994 Code) Ordinance No. Page 3 2. If payment in full is not received within twenty two (22) days of the billing date, the account(s) shall be deemed delinquent and a delinquency charge will be assessed as provided in title 3, chapter 4 of this code. For locations which receive city water, wastewater and/or solid waste services, the account holders shall be billed and collected as a single account, and in'"the "event'of a delfnr quenc)f<in payment as to either water, wastewater or solid waste services, subsequent payments shall be credited first to the delinquent billings and then to the current billing. (Ord. 97-3820, 12-16-1997) - 1 3. If any check or automa# c bapiR debit for payment of utility services is returned, for any reason, to the city from the financial institution from which it is written, a service fee shall be assessed as provided in title 3, chapter 4 of this code. B. Imposition Of Lien For Unpaid Services: 1. Except as provided in subsection B2 of this section, rates and charges for city utilities not paid as provided by city ordinance are a lien upon the property or premises served, upon certification by the city finance director or designee to the county treasurer that the rates and charges are due. Said lien shall be collected in the same manner as a property tax, as provided by state law. At least thi 30 +9� days prior to such certification, the city finance director, or designee, shall give written notice of intent to certify lien by ordinary mail to the account holder of the delinquent account and, if the account holder is a tenant, to the property owner of record. (Ord. 01-3962, 4-3-2001) 2. For residential rental properties where the charges for service are separately metered and paid directly by the tenant and when the utility account is in the current tenant's name, liens of the property shall be pursuant to state code. (Ord. 12-4505, 12-4-2012) 16-3A-7: DISCONTINUANCE AND RESTORATION OF SERVICE: A. Notice: 1. In the event an account holder fails to pay the full amount of the billing for city utility services within twenty two (22) calendar days after the billing date, service may be discontinued but only after giving the account holder written notice and an opportunity for a hearing before the director of finance or designee(s). The written notice shall be mailed by first class mail to the affected account holder not less than seven 7 #weaty-fe"' `24) -calendar days ("cure period") in advance of discontinuance, and shall state: a) the reason for discontinuance of service; b) the specific account(s) and service location(s) for which payment is delinquent; and c) the amount(s) delinquent, including fees and penalties. (Ord. 97-3769,1-14-1997) 3. When an account holder's account for water, wastewater and/or solid waste service at a specific location is delinquent, the city may discontinue water service at that location by shutting off the water service valve at the stop box if available or by removal of the account holder's water meter. The city shall have unrestricted access to such valves and water meters for the purposes specified herein regardless of whether those water devices are located in city right of way, city easement or on the property of the account holder, and consent shall be deemed given for such access when service is requested and when an account holder receives city utility services. 4. Notwithstanding the above, when an individual account holder is billed under two (2) or more accounts for water, wastewater and/or solid waste service at two (2) or more separate locations, a delinquency in payment for service provided at any one or more of the locations shall be cause for the city to discontinue service at all service locations for that account holder regardless of whether the accounts for service at those other locations are delinquent. B. Restoration Of Service; Fees And Charges: 1. Upon payment of all due and payable water, wastewater and solid waste service charges, including fees and penalties, the city shall cause the account holder's water service to be restored. Services to rental properties shall be resumed notwithstanding the failure of the persons formerly living there or occupying the premises to have paid all fees and charges, provided all such persons previously occupying the premises have vacated the premises as verified, in writing, by the rental property owner or manager. 2. All payments required to restore the account holder's service shall be in the form of cash, money order or a cashier's check, or credit card. Ordinance No. Page 4 3. It shall be prohibited for any person to restore or attempt to restore water, wastewater or solid waste service at a location where those services have been discontinued unless and until the city authorizes such restoration. 4. The director of finance is authorized to adopt and promulgate billing and collection procedures for water, wastewater and solid waste service accounts, including "records. Such procedures shall be approved by the city manager and city attorney. (1994 Code) SECTION III. REPEALER. All ordinances and parts of ordinances in conflict with the provisions of this Ordinance are hereby repealed. SECTION IV. SEVERABILITY. If any section, provision or part of the Ordinance shall be adjudged to be invalid or unconstitutional, such adjudication shall not affect the validity of the Ordinance as a whole or any section, provision or part thereof not adjudged invalid or unconstitutional. SECTION V. EFFECTIVE DATE. This Ordinance shall be in effect November 1, 2020 Passed and approved this day of , 2020. MAYOR ATTEST: CITY CLERK Approved by City Attorney's Office STAFF PRESENTATION TO FOLLOW: 1 r I C04;qui h CITY OF lOVVA CITY 410 East Washington Street Iowa City, Iowa S2240-1826 (319) 356-5000 (3I9) 356-5009 FAX www.icgov.org Proposed Water Rate Ordinance Public Hearing September 15, 2020 Dennis Bockenstedt, Finance Director Proposed Changes are primarily focused on Utility Shutoff Carding Process and the Carding Fee The proposed changes: A) Convert shutoff carding process from a manual process to a digital process 1. Have potential to lower carbon emissions 2. Could reduce staff time and lower costs B) Pass the cost savings on to customers 1. Reduces disproportionate minority impact C) Improve parity with municipal neighbors ■The shutoff carding fee adds to the financial difficulty of the customer and ultimately leads to more waters hutoffs. ■The shutoff carding fee is unpopular and meets the most customer resistance. ■The shutoff carding fee was intended for cost recovery, but there is no other managerial purpose for the fee to remain. ■Late fees and reconnection fees a re amongthe few tools that the City has to incentivize customers to pay their bill on time; customers generally understand the purpose of late fees and the reconnection fees but not the shutoff carding fee. ■The shutoff carding fee also has a disproportionate impact on minority and low-income populations. Major provisions in proposed ordinance: 1) Elimination of the physical door carding requirement (becomes department policy rather than City Code) 2) Elimination of the corresponding $47.25 shutoff carding fee 3) Increase in the late fee from 5% of amount due to 10% of amount due (approximately $4.70 increase to provide for electronic notification software) 4) Reduction of the service re -connection fee from $47.25 to $45.00 The monthly utility bill is how the City bills and collects for these essential services: Water Utility $33.90 Sewer Utility $36.00 Refuse Collection $12.00 Recycling Program $ 5.10 Organics Collection $ 2.00 Storm Water System* $ 5.00 Avg. Utility Bill94.00 * Single family These are all Enterprise Fund service fees that support business -like operations which are not supported by property tax revenues. 1. Each week, a different zone of the City has its water meters read by the Water Division of Public Works. 2. The Revenue Division of the Finance department sends out utility bills every week by zone (about 6,000 bills per week). 3. On the face of each bill, there is a statement of a delinquency charge if the bill is unpaid by the due date. 4. Customers have 22 days to make payment of the amount due. 5. If unpaid after 22 days, a delinquency charge of 5% of amount due (averages $4.70) is added, and a past due letter ismailed outlining amounts due and the City's shutoff procedures. 6. If unpaid after 37 days, a Water Division employee places shutoff notice ("carding") on the customer's door of impending water shutoff; a $47.25 shutoff carding fee is charged. 7. If unpaid after 47 days, a Water Division employee turns off the customer's water. 8. When the utility bill and all fees have been paid, a Water Division employee turns on the water and a $47.25 reconnection fee is charged. 9. Total past due and reconnect fees could amount to $99.20. ■Finance Department reviewed utility bill shutoff "carding" policies in 2017 as part of Racial Equity Toolkit; one of the first uses of the Toolkit. ■ Racial Equity Toolkit was used to help determine whether City utility bill carding policies had a disproportionate impact on certain populations and if impacts were found, helped to identify ways to mitigate them. ■Customer addresses where utility bill cardings occurred from September 2016— February 2017 were mapped usingArcGIS against overlays of non-white and low-income census tract data and address data from the Low -Income Utility Discount Program. Statistically Significant Areas of High and Low Occurences of Cardings Iowa City, kno, I September 2016- February 2017 Wd SpouftallahI o¢etenc daNings - Not Spot-99%ConfiCence - Not Spot -95%ConfiEenae Q Not Spot-90%Conficlence Q Not Significant 0 CON Spa - 90%Confclence Non -White Population Iowa City, Iowa 2015 i t mAll"7%] percent of NonWhitepopulation by Block Group Q om -em M et%-uo% M ue%-..e% baa -ui0% 1 ..w.w. i Additional Findings: ■ Households participating in the Low -Income Utility Discount Program received significantly fewer cardings than those not participating. (Within the eleven block groups identified). ■ The numbers also indicated that there were many more households eligible for the discount program than were participating. Recommendations and actions taken and ongoing: 1. Targeted promotion of the Low -Income Utility Discount Program. 2. Implement a donor program to help offset the increased costs to the City resulting from the expansion of the Discount Program. ■ What is the program? ■ Qua IifyingindividuaIsget: ■ 60% off water, sewer, and storm water base charges ■ 75% off refuse, recycling, and organics charges ■ Numberof Participants: ■ August 2017 had 338 participants ■ August 2020 had 455 participants ■ 35%increase in participation ■ Costofprogram: ■ Cost of program is about $9,100 per month ■ Donor program brings inabout$10,000per year ■In 2020, the Utility Bill Shutoff Carding process was reviewed again, because the Finance Department has a Climate Action goal to reduce carbon emissions through converting manual processes to an electronic format ■The carbon emissions savings potential was inconclusive; however, the major proposed change of eliminating the shutoff carding notice and fee supported the Racial Equity Toolkit findings from 2017 ■This review created the proposed shutoff notice process to lower costs and reduce the financial impact on minority and low-income populations First four steps do NOT change: 1. Each week, a different zone of the City has its water meters read by the Water Division of Public Works. 2. The Revenue Division of the Finance Department sends out utility bills every week by zone. 3. On the face of each bill, there is a statement of a delinquency charge if the bill is unpaid by the due date. 4. Customers have 22 days to make payment of the amount due. Last four steps have fee and process changes: 5. If unpaid after 22 days, a delinquency charge of 10% of amount due (average charge increases from $4.70 to $9.40) is added. 6. If unpaid after 37 days,a notice of impending waters hutoffwiII be mailed; the customer wiII also be notified electronically bye mail and/or text, if customer info is available; no carding fee will be levied ($47.25 cardingfee is eliminated). 7. If unpaid after 47 days, a Water Division empIoyeeturns off the customer's water. 8. When the utility bill and all fees have been paid, a Water Division employee turns on the water and a $45.00 reconnection fee is charged (reduced from $47.25). 9. Total past due and reconnect fees could amountto $54.40; a reduction of $44.80. Past Due/Reconnect Fees for Utility Bills $120.00 $100.00 $80.00 $60.00 $40.00 $20.00 Current - $99.20 Proposed - $ 54.40 ■ Late Fee ■ Carding Fee ■ Reconnection Fee Billing period Late Fee Carding Fee Reconnect Fee Total (without late fee) After Hours Reconnect Available Coralville North Liberty Iowa City (old) Iowa City (new) Yes No Yes Yes Monthly Monthly Monthly Monthly 10% 10% 5% 10% $ 20.00 $ 15.00 $ 47.25 $ $ 45.00 $ 35.00 $ 47.25 $ 45.00 $ 65.00 $ 50.00 $ 94.50 $ 45.00 Yes No Yes Yes ■Proposed ordinance changes comply with State law. ■Enterprise Funds are self-supporting and several have revenue bond debt and bond coverage requirements; this proposal meets those requirements. ■The disproportionate impact of the shutoff carding fee is reduced. ■Total estimated revenue loss from change is $150,000 per year. ■Water Rate Ordinance requires three readings prior to adoption. Any Questions? STAFF PRESENTATION CONCLUDED � r rrM as � h CITY OF IOWA CITY 410 East Washington Strect Iowa City, Iowa 52240-1826 (3 19) 356-5000 (3 19) 356-5009 FAX www. icgov. o rg