At its September 21 board meeting, the State Water Resources Control Board (SWRCB) announced that arrearages reported by water systems on the SWRCB’s August-September survey will be fully funded by the California Water and Wastewater Arrearage Payment Program. With $985 million available to for the program, water systems reported a total of $315,400,661 in arrearages, meaning that the fund can fully cover the pandemic-related costs to these systems. Additionally, because the fund was not fully utilized, wastewater systems will now have the opportunity to apply for arrearages as well.
The board meeting also provided important clarifications to the program on issues raised during a September 9 SWRCB workshop:
- Late Fees: In addition to arrearages, water systems reported $16 million in late fees that will not be eligible for reimbursement,
- Administrative Costs: Districts will be eligible for an additional three percent of total arrearage reimbursement for administrative related costs of the program.
- Prioritization: Because the fund can cover all arrearages, systems will not need to prioritize which customers’ arrearages to address first.
- Data Sharing: Finally, data sharing with other utility financial assistance programs will be recommended, but not required.
Water systems and others have been concerned regarding the tax implications of this program. While the state continues to seek guidance on whether these reimbursements will be considered taxable income, at this point, the SWRCB recommends that districts split up the credits that the arrearage reimbursements will provide to customers over the span of two tax years. More information on this issue will likely be forthcoming.
The SWRCB will begin funds disbursement to eligible survey respondents no later than November 1, 2021, and complete distribution by January 31, 2022. Water systems should look for an application package from the SWRCB in the coming days and complete it as soon as possible to formally request funds. The deadline for applications is December 6, 2021. Since it is now known that the fund will have a significant amount of money unused by drinking water systems, a wastewater arrearages program is assured. Staff reported that this program is currently in design and will be established no later than February 1, 2022.
The $985 million California Water and Wastewater Arrearage Payment Program through the SWRCB is a separate and distinct program from the $100 million COVID-19 relief fund for independent special districts. Special districts with water or wastewater arrearages must choose which of these two funds is the best fit; a special district cannot participate in both programs.
For additional details regarding the arrearage payment program, visit www.waterboards.ca.gov/arrearage_payment_program/. Water districts can also sign up to receive regular email updates about the program at this site.
For additional details regarding the $100 million COVID-19 relief fund for independent special districts, visit www.csda.net/take-action/covid.
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