HomeMy WebLinkAboutStaff Report 13866City of Palo Alto (ID # 13866)
Utilities Advisory Commission Staff Report
Meeting Date: 1/5/2022
City of Palo Alto Page 1
Title: Staff Recommendation That the Utilities Advisory Commission
Recommend the Council Adopt a Resolution Amending Utilities Rule and
Regulation 11 (Billing, Adjustments and Payment of Bills) to Set a $5,000
Limit on Credit Card Payments and Apply a Cost-Recovery Charge for Non-
Compliance
From: Director of Utilities
Lead Department: Utilities
Recommendation
Staff requests that the Utilities Advisory Commission (UAC) recommend that the Council adopt
a resolution amending Utilities Rule and Regulation 11, (Billing, Adjustments and Payment of
Bills) to set a $5,000 limit on credit card payments and apply a cost-recovery charge for non-
compliance.
Executive Summary
Utilities’ Rules and Regulations govern utility services in the City and the fees charged for those
services. They are updated as needed to ensure Utilities’ procedures meet industry practices,
standards, and requirements. The recommended amendment adds policies and procedures to
Rule and Regulation 11 for the billing, adjustments, and payment of bills. The significant
modifications are adding a maximum credit card payment of $5,000 per monthly account and
retaining the option to apply a cost-recovery charge (up to 2.7%) to recover credit card
merchant fees charged to the City for non-compliance of the $5,000 limit. Customers with
balances greater than $5,000 can pay their bills via bank draft, automated clearing house (ACH),
check, or wire transfer (Attachment A – Updated Version and Attachment B – Redlined
Version).
Background
In 2006, the City created a credit card policy (ASD 1-47) to codify City practices and establish
guidelines on the acceptance of credit card payments. As part of the policy, the City did not
charge a convenience fee for credit card payments, however, the City of Palo Alto Utilities
(CPAU) would not accept credit card payments of more than $10,000 per month from a single
account. The credit card limit was added to control the credit card processing fees which were
absorbed by CPAU.
City of Palo Alto Page 2
In 2013, the City retired the credit card policy because CPAU wanted to provide more payment
flexibility to their large commercial customers who preferred to pay by credit card. At that
time, only 14 customers, comprising 6.7% of CPAU’s 209 large commercial customers, used
credit cards to pay their utility bills. By eliminating the $10,000 credit card limit, the
incremental credit card fees for accounts greater than $10,000 was approximately $22,440 in
2013. Since then, the number of utility customers who pay their bills by credit card, and the
value of credit card fees CPAU pays as a result, has increased dramatically.
Discussion
The City is developing a policy to implement a surcharge for credit card payments. Historically,
credit card fees for municipal fee transactions, classes, fines, and utility payments have been
paid by the City without being passed on to customers and residents. In order to reduce and
recover some of the credit card fees, the Administrative Services Department (ASD) is exploring
credit card surcharges, credit card limits, and alternative payment methods. The new credit
card payment policy is tentatively scheduled to be implemented in fiscal year (FY) 2023.
Credit card fees for utility payments have increased by 141% in the past five years from
$472,217 in FY 2017 to $1,139,418 in FY 2021. More customers (both residential and
commercial) are paying their utility bills by credit card due to customer convenience and
benefits received from their credit card reward programs. In addition, credit card companies
are increasing their credit card charges. Instead of waiting for the City’s new credit policy,
CPAU recommends implementing a maximum credit card payment of $5,000 per monthly utility
account as a stopgap measure to reduce credit card fees.
In November 2021, CPAU received 9,200 credit card payments ranging from $1 to $75,000. Of
the 9,200 credit card payments, 9,100, or 98.9% of the payments, are less than $5,000. With
the new maximum credit card amount of $5,000, approximately 100 utility customers will be
impacted and required to switch to an alternative payment method (i.e. bank draft, ACH, check,
or wire transfer), which would potentially reduce the total credit card fee amount charged to
the City by 50%, or $550,000. Over the past several months, CPAU has contacted large
commercial customers paying via credit card and have converted some to bank draft or wire
transfer (estimated reduction of $100,000 in annual credit card fees), while others prefer to
continue paying via credit card. In an effort to enforce the change to Rule 11, the customer
portal and interactive voice response system will be configured to limit amounts to $5,000 per
credit card payment. In addition, staff plans to monitor Utilities credit card payments on a
routine basis to determine if customers are paying over $5,000 per account per invoice using a
credit card. Staff plans to reach out to these customers over the phone or provide written
notification to advise this is no longer permitted. However, should credit card payments
continue to exceed $5,000, staff retains the option to assess a cost-recovery charge of up to
2.7% of the payment amount in order to recover credit card merchant fees charged to the City.
Timeline
CPAU will notify customers of the credit card change by direct mail and through the customer
City of Palo Alto Page 3
account management portal MyCPAU during January and February 2022. CPAU plans to
implement the maximum credit card payment change effective on March 2022.
Resource Impact
CPAU staff expects a reduction of approximately $550,000 in credit card fees on an annual basis
as a result of the credit card limit and direct communication with customers. CPAU will
continue to monitor credit card payment activity and fees and provide input to ASD for the
new Citywide credit card policy.
Environmental Impact
The UAC’s recommendation on this change to Rule 11 does not require California
Environmetnal Quality review since this action is not a project with a potential impact on the
environment, under Public Resources Code section 21065.
Attachments:
•Attachment A: Rule 11 Clean
•Attachment B: Rule 11 Redline
•Attachment C: Resolution
BILLING, ADJUSTMENTS AND PAYMENT OF BILLS
RULE AND REGULATION 11
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 3-01-2022
Sheet No 1
A.BILLING UNITS
All metered billing units used for billing purposes shall be determined to the nearest whole unit.
Such units may include, kW, kWh, kVA, kVar, hp, Therms, and/or ccf.
B. PAYMENT OF BILLS
CPAU issues bills to its Customers on a regular interval. Bills shall be deemed received upon
physical or electronic delivery to Customer, or three calendar days following the deposit of the bill inthe United States Mail to the Customer’s billing address. Bills for CPAU Services are due andpayable 20 calendar days following issuance of the bill statement. Bills unpaid after the 20 dayperiod are considered delinquent (“past due”). If a Customer’s payment is not received by CPAU
after 25 days of bill issuance, the outstanding balance will be assessed a late payment Charge.
For the convenience of Customers there are a number of ways to pay CPAU bills:
1.By enclosing the bill stub and check and mailing to: CPAU, P.O. Box 10097, Palo Alto, CA
94303-0897.
2.By enrolling in auto-pay bank draft. Payments will be drafted from a Customer’s designatedchecking or saving account and automatically applied to the Customer’s Utility Account foreach current Billing Period. Customers may enroll by calling Utilities Customer Service at
650-329-2161 or sign up through “MyCPAU” on-line portal.
3.By enrolling through automated clearing house and wire transfer. Customers may contactUtilities Customer Service at 650-329-2161.
4.By paying in person at the Civic Center, Revenue Collections or Utilities Customer Service
Business counter, Ground Floor, 250 Hamilton Avenue, Palo Alto between the hours of 8:00a.m. and 4:30 p.m.a.Credit card payments are accepted at both Revenue Collections and UtilitiesCustomer Service Business counter. Effective March 2022, customers are limited to
make a maximum of $5,000 per account, per monthly invoice. Customers should call
to see which credit cards are accepted.b.Effective March 2022, credit card payments over the $5,000 limit listed in 4(a) willbe assessed a cost recovery fee of up to 2.7 percent to recover the merchant feesimposed upon CPAU for these payments.
c.Customers can pay delinquent bills with a credit card by phone by calling the
Utilities Customer Service Center during business hours.
Attachment A
BILLING, ADJUSTMENTS AND PAYMENT OF BILLS
RULE AND REGULATION 11
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 3-01-2022
Sheet No 2
5.By depositing the payment in the walk-up Night Depository Box in the front of the City Hallbuilding on the Civic Center Plaza, or at the drive-up Night Depository Box in the Civic
Center Garage, on “A” Level.
6.By paying online through the “MyCPAU” on-line portal, accessible from the Utilities’website. Payment through the “MyCPAU” on-line portal may be made by credit card or bybank draft.
7.By enrolling at a financial institution or service company that can provide electronicpayments to CPAU on behalf of the Customer.
8. By completing a “Revert to Owner (RTO) Agreement” in order to maintain Utilities Service
to units during the interim period between tenants (this option is available to customers who
are property managers and landlords).
C.BUDGET BILLING PAYMENT PROGRAM
The Budget Billing Payment Program establishes equalized monthly payments and is available to all
Residential Customers who qualify as set forth below:
1.Customers may join the Budget Billing Payment Program at any time providing theCustomer Account balance is zero and the Customer has not been previously removed fromthe Budget Billing Program for non-payment.
2.A Customer electing to utilize the program shall agree to make monthly payments based onCPAU’s forward estimate of the Customers’ Charges for the subsequent twelve-monthperiod.
3.CPAU does not guarantee that the total actual Charges will not exceed, or be less than, its
original estimate. Customers should review their Account on an ongoing basis and requestchanges to the budget billing amount in response to changes in their household usage. CPAUmay require that Customers pay a revised monthly amount as a condition to continuingparticipation in the plan, if CPAU determines that substantial changes in Customer usage
patterns or consumption has occurred.
4.CPAU will perform an annual true-up on Customer Budget Billing Accounts every twelvemonths. This will result in either a Customer credit for CPAU over-collection or anoutstanding balance due from the Customer for under-collection by CPAU during the prior
twelve months.
BILLING, ADJUSTMENTS AND PAYMENT OF BILLS
RULE AND REGULATION 11
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 3-01-2022
Sheet No 3
D. DISCONTINUANCE OF BUDGET BILLING
The Customer’s Budget Billing Payment Program shall remain in effect, subject to review of the monthly payment amount, and shall terminate when:
1. The Customer notifies CPAU to terminate participation in the Budget Billing Program; 2. CPAU notifies the Customer of the termination of its Budget Billing Payment Program: 3. The Customer no longer takes Service at the Premises; or
4. The Customer owes an amount of two or more monthly payments. However, if the Customer eliminates the delinquency, removal from the program will not occur. Upon termination of either Utilities Service or participation in the Budget Billing Payment Program, any amount owed by the Customer for actual Charges shall immediately become due and payable or
any amount due to the Customer shall be refunded or credited.
E. INSUFFICIENT FUNDS FOR PAYMENT 1. A Service Charge will be made and collected by the City of Palo Alto for each check
returned by a bank to CPAU for the reason of insufficient funds in accordance with Rate
Schedule C-1. 2. Unsuccessful Bank Drafts due to insufficient funds will be subject to late payment fees in accordance with Rate Schedule C-1.
F. PRORATION OF BILLS 1. Bills for Utilities Services will be prepared for each Billing Period in accordance with the applicable Rate Schedules or CPAU contract applicable to the Premises served.
2. Proration is intended to produce a uniform average unit cost for the commodity regardless of the number of days in the Service period. Services will be prorated if the number of actual Service days differs from the number of days in the applicable Billing Period. Electric Demand (kW) and Electric Power Factor Charges will not be prorated. Proration will not
occur for those Rate Schedules that contain Meter fees, connection fees, deposits, and other
BILLING, ADJUSTMENTS AND PAYMENT OF BILLS
RULE AND REGULATION 11
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 3-01-2022
Sheet No 4
miscellaneous fees. 3. If Rate Schedules change during the Billing Period, Charges will be prorated on the basis of
the number of days covered by the previous Rate Schedule and the number of days covered
by the new Rate Schedule. G. DELINQUENT BILLS AND LATE PAYMENT CHARGES
1. Utilities Charges incurred in the applicable Billing Period are due and payable by the “Due
Date” indicated on the front of the bill statement. Bills unpaid by the due date are delinquent and a late payment Charge will be added to the outstanding balance as specified in Rate Schedule C-1.
2. Residential and commercial Accounts having unpaid balances older than 180 days shall be
subject to collection action by the City. Collection action may result in notifications to credit reporting agencies. 3. Late payment Charges may be suspended by CPAU if the Customer is withholding full or
partial payment pending final resolution of disputed bill. The late payment Charge may be
waived by CPAU based upon the ultimate resolution of a disputed Charge. 4. Full or partial payments towards outstanding balances will be applied to the oldest outstanding Charges. Failure to pay outstanding balances will result in late fees and termination of Service for non-payment.
5. In the event that a Customer donating to the ProjectPLEDGE Program has a delinquent bill, the late Charge percentage will not be applied to the amount of the Customer’s pledge. However, the Customer’s participation in ProjectPLEDGE will be discontinued after three consecutive Billing Periods in which the Customer has not included their pledge amount in
the bill. 6. Customers whose Utility bills include payments of principal and/or interest on loans from CPAU which are secured by deeds of trust on real property shall be charged a late payment Charge when any current Utility bill includes an unpaid installment on such loan from a prior bill. Nothing in this Rule and Regulation shall be construed to alter in any way the duty of
the Customer to pay any installment on a loan from CPAU when due, or to alter the rights of
CPAU to enforce the payment of such installments. H. DISPUTED BILLS
BILLING, ADJUSTMENTS AND PAYMENT OF BILLS
RULE AND REGULATION 11
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 3-01-2022
Sheet No 5
If bill accuracy is questioned or disputed by the Customer, Customers shall request an explanation from CPAU within the current Billing Period or as soon as reasonably possible. After reviewing the disputed bill, CPAU will:
1.Issue a corrected bill to the Customer or reflect the correction on the bill in a subsequentBilling Period.
2.Determine if an amortization period (“payment arrangement”) for the Charge-in-question
shall be provided by CPAU. If a payment arrangement is offered by CPAU and agreed to by
the Customer, Utility Services will not be discontinued for nonpayment while the Customercomplies with the payment arrangement for the “past due” balance , and subsequent Utilitiesbills are paid on time during the payment arrangement period.
3.Advise the Customer that the bill is correct as presented. The Customer may choose, at the
Customer’s option, to have the Meter removed for testing under the Provisions of Rule 15“Metering” and payment of the applicable fee found in Rate Schedule C-1 “Exchange Meterfor Accuracy Test”.
I.METERED SERVICE BILLING ERRORS AND ADJUSTMENTS
Where a Customer has been undercharged or overcharged for metered Service, the date and cause ofwhich can be reliably established by CPAU, the retroactive billing adjustment (back bill or refund)shall not exceed three years. The maximum bill adjustment for undercharges shall be $500 per
Account, per incident.
1.When, as a result of either a CPAU or a Customer-initiated accuracy test, an Electric or GasMeter is found to register more than two percent (2%) fast or a Water Meter is found toregister more than one and a half percent (1.5%) fast, CPAU will refund the Customer the
overcharge based upon the corrected Meter readings for the period the Meter was in use, or
three years, whichever is less. Any applicable late payment will be waived.
2.When, as a result of a test, a Customer’s Electric or Gas Meter is found not to register or toregister more than two percent (2%) slow, or a Water Meter is found not to register or to
register more than one and half percent (1.5%) slow, CPAU may bill the Customer for the
undercharge base on an average bill. The bill will be computed based on an estimate of theCustomer’s consumption during a prior month in the same season or on the consumption inthe same period of the prior three years.
BILLING, ADJUSTMENTS AND PAYMENT OF BILLS
RULE AND REGULATION 11
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 3-01-2022
Sheet No 6
3. When, a billing or consumption problem has been investigated and verified, Utilities will attempt to notify the Customer within 30 working days or a reasonable amount of time depending on the complexity of the error.
4. When CPAU is the cause of an error that results in an overcharge, CPAU will refund the full amount of the overcharge, subject to the three year retroactive billing adjustment period described above. Back bills for undercharges will be determined and approved by the General Manager of Utilities, or delegate, and may be waived in an amount up to $2,500 per
Customer Account, per incident, subject to the three year retroactive billing adjustment
period described above. J. UNMETERED SERVICE BILLING ERRORS AND ADJUSTMENTS
Where a Customer has been undercharged or overcharged for unmetered Service, the date and cause
of which can be reliably established where a customer has been undercharged or overcharged, the retroactive billing adjustment (back bill or refund) shall not exceed three years. K. THEFT OF SERVICE
Where there is evidence that meter tampering or theft of Utility Service has occurred, CPAU will retroactively bill, and collect any underpayment or nonpayment of Charges as well as any labor or material costs related to investigating the theft and making any required corrections. The applicable period to assess Charges shall commence from the date it can be reasonably established the theft
began to the date in which the underpayment was discovered and initially established. The labor and
material costs related to investigating the theft will be calculated in accordance with Utility Rate Schedule C-1 and/or any other applicable Utility Rate schedules. All underpayments or non-payments shall become immediately due and payable. Customers committing theft of Utility Service may also be subject to legal action pursuant to Rule 1, California Penal Code sections 487,496, 498,
591, 592, 593 and California Civil Code sections 1882 through 1882.6.
Customers billed for theft of service can dispute the charges by following the process described in Rule and Regulation 11.H. If that process does not resolve the matter, customers billed for theft of service may, within thirty (30) calendar days, request (by telephone, in writing, or in person) an
administrative hearing. If a hearing is requested, the city manager or his designee shall schedule a
date and time for said hearing as soon as possible after the request is filed, but no later than ten (10) business days after the filing of such request for hearing. At the hearing, the customer billed for theft of service may offer evidence in person or in the form of
a written statement, setting forth the reasons why the customer believes the determination of theft is
incorrect. Utilities personnel shall also be allowed to offer whatever evidence they may have as to
BILLING, ADJUSTMENTS AND PAYMENT OF BILLS
RULE AND REGULATION 11
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 3-01-2022
Sheet No 7
why they have established the customer engaged in utilities theft. The city manager or his designee shall make a determination as to whether the customer is liable for the charges for theft of service.
L.WATER LEAK CREDITS
The General Manager of Utilities, or delegate, may approve Water leak adjustments forCustomer’s Water and Wastewater Accounts (when Wastewater charges are based on Water
consumption) under the following conditions:
1. Customers having higher-than-average Water consumption for a particular billingperiod due to leaks may request a Water and/or Wastewater Leak bill adjustment, asapplicable.
2.Applications for Water and Wastewater leak bill adjustments must be submitted to the
Utilities Department within 60 days from the bill’s due date, for the bill covering theperiod in which the higher-than-average Water consumption occurred.3.Customers are restricted to one Water and/or Wastewater leak billing adjustment in each36-month period.
4. Higher-than-average Water consumption is defined as the volume of water greater than
100% of the Customer’s normal consumption compared to the Customer’s historicalconsumption over the prior three years, calculated by CPAU using prior averages for therelevant billing period(s).5.Leaking systems must be repaired before the Customer receives a Water or
Wastewater leak bill adjustment, to ensure future bills are not impacted by the same leak.
Shutting off the source of the leak is not considered a repair. Undetermined or generalhigh water consumption is not eligible for adjustment.6.Water leak bill adjustments will be applied to Customer bills based on the higher-than-average water volumes calculated by CPAU. Water leak bill adjustments will be applied
to 50% of the calculated higher than average water volume, to a limit of $2,500, using the
Tier 1 Commodity Rate cost of the appropriate residential or commercial Water RateSchedule.7.Wastewater bill adjustments related to Water leaks will be made based upon the adjustedWater volume, and are not included in the $2,500 Water leak bill adjustment limit.
8.Utility User Tax (UUT) billing adjustments related to Water leaks will be made based
upon the adjusted Water volume and are not included in the $2,500 Water leak billadjustment limit.9.Administrative decisions regarding Water and Wastewater leak bill adjustments,including eligibility, volume calculations, and adjustment costs will be made by the
General Manager of Utilities, or delegate, and are final.
BILLING, ADJUSTMENTS AND PAYMENT OF BILLS
RULE AND REGULATION 11
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 3-01-2022
Sheet No 8
M.REFUSE BILLING ERRORS, DISPUTES AND ADJUSTMENTS
1.Adjustments to the Refuse bill shall be requested to the City’s Collector. Customers with
adjustments unresolved by the City’s Collector, may dispute their claim with the City’s
Public Works Department, Refuse. Billing adjustments will be resolved by following theCity’s Rules and Regulations, Chapter 5.20 of the Palo Alto Municipal Code and specificregulations promulgated by the City Manager pursuant to the authority established inChapter 5.20.
2.When an error in billing has occurred, the date and cause of which can be reliably established
where a Customer has been undercharged or overcharged, the retroactive billing adjustmentshall not exceed three years.
(END)
BILLING, ADJUSTMENTS AND PAYMENT OF BILLS
RULE AND REGULATION 11
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 4-2-20183-01-2022 Sheet No 1
Formatted: Right, Tab stops: -0.5", Left + 0.26", Left + 0.58", Left + 0.91", Left + 1.24", Left + 1.49", Left + 1.74", Left + 6.55", Decimal aligned,Leader: … + Not at 7"
A.BILLING UNITS
All metered billing units used for billing purposes shall be determined to the nearest whole unit.Such units may include, kW, kWh, kVA, kVar, hp, Therms, and/or ccf.
B.PAYMENT OF BILLS
CPAU issues bills to its Customers on a regular interval. Bills shall be deemed received uponphysical or electronic delivery to Customer, or three calendar days following the deposit of the bill inthe United States Mail to the Customer’s billing address. Bills for CPAU Services are due andpayable 20 calendar days following issuance of the bill statement. Bills unpaid after the 20 dayperiod are considered delinquent (“past due”). If a Customer’s payment is not received by CPAUafter 25 days of bill issuance, the outstanding balance will be assessed a late payment Charge.
For the convenience of Customers there are a number of ways to pay CPAU bills:
1.By enclosing the bill stub and check and mailing to: CPAU, P.O. Box 10097, Palo Alto, CA94303-0897.
2.By enrolling in the Utilities Bank Draft Program.auto-pay bank draft. Payments will bedrafted from a Customer’s designated checking or saving account and automatically appliedto the Customer’s Utility Account for each current Billing Period. Customers may enroll bycalling Utilities Customer Service at 650-329-2161 or sign up through “MyCPAU” on-lineportal.
3.By enrolling through automated clearing house and wire transfer. Customers may contactUtilities Customer Service at 650-329-2161.
4.By paying in Personperson at the Civic Center, Revenue Collections, 1st or UtilitiesCustomer Service Business counter, Ground Floor, 250 Hamilton Avenue, Palo Altobetween the hours of 8:00 a.m. and 4:30 p.m. The City offices are closed on alternateFridays. Customers should call 650-329-2317 to ensure the office is open. a.Credit card payments are accepted at both Revenue Collections. and UtilitiesCustomer Service Business counter. Effective March 2022, customers are limited tomake a maximum of $5,000 per account, per monthly invoice. Customers should callto see which credit cards are accepted. b.Effective March 2022, credit card payments over the $5,000 limit listed in 4(a) willbe assessed a cost recovery fee of up to 2.7 percent to recover the merchant fees imposed upon CPAU for these payments.
Attachment B
BILLING, ADJUSTMENTS AND PAYMENT OF BILLS RULE AND REGULATION 11
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 4-2-20183-01-2022
Sheet No 2
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c. Customers can pay delinquent bills with a credit card by phone by calling the UtilityUtilities Customer Service Center during business hours.
45. By depositing the payment in the walk-up Night Depository Box in the front of the City Hall building on the Civic Center Plaza, or at the drive-up Night Depository Box in the Civic Center Garage, on “A” Level.
5. 6. By paying online through the “My Utilities Account” applicationMyCPAU” on-line portal, accessible from the Utilities’ website. Payment through the “My Utilities Account”MyCPAU” on-line portal may be made by credit card or by bank draft.
6. 7. By enrolling at a financial institution or service company that can provide electronic payments to CPAU on behalf of the Customer.
7. By Property Managers8. By completing a “Revert to Owner (RTO) Agreement” in order to maintain utility serviceUtilities Service to units during the interim period between tenants. (this option is available to customers who are property managers and landlords).
C. BUDGET BILLING PAYMENT PROGRAM The Budget Billing Payment Program establishes equalized monthly payments and is available to all Residential Customers who qualify as set forth below:
1. Customers may join the Budget Billing Payment Program at any time providing the Customer Account balance is zero and the Customer has not been previously removed from the Budget Billing Program for non-payment.
2. A Customer electing to utilize the program shall agree to make monthly payments based on CPAU’s forward estimate of the Customers’ Charges for the subsequent twelve-month period.
3. CPAU does not guarantee that the total actual Charges will not exceed, or be less than, its original estimate. Customers should review their Account on an ongoing basis and request changes to the budget billing amount in response to changes in their household usage. CPAU may require that Customers pay a revised monthly amount as a condition to continuing participation in the plan, if CPAU determines that substantial changes in Customer usage patterns or consumption has occurred.
4. CPAU will perform an annual true-up on Customer Budget Billing Accounts every twelve months. This will result in either a Customer credit for CPAU over-collection or an
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BILLING, ADJUSTMENTS AND PAYMENT OF BILLS RULE AND REGULATION 11
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 4-2-20183-01-2022
Sheet No 3
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outstanding balance due from the Customer for under-collection by CPAU during the prior twelve months.
D. DISCONTINUANCE OF BUDGET BILLING The Customer’s Budget Billing Payment Program shall remain in effect, subject to review of the monthly payment amount, and shall terminate when:
1. The Customer notifies CPAU to terminate participation in the Budget Billing Program;
2. CPAU notifies the Customer of the termination of its Budget Billing Payment Program:
3. The Customer no longer takes Service at the Premises; or
4. The Customer owes an amount of two or more monthly payments. However, if the Customer eliminates the delinquency, removal from the program will not occur. Upon termination of either UtilityUtilities Service or participation in the Budget Billing Payment Program, any amount owed by the Customer for actual Charges shall immediately become due and payable or any amount due to the Customer shall be refunded or credited.
E. INSUFFICIENT FUNDS FOR PAYMENT
1. A Service Charge will be made and collected by the City of Palo Alto for each check returned by a bank to CPAU for the reason of insufficient funds in accordance with Rate Schedule C-1.
2. Unsuccessful Bank Drafts due to insufficient funds will be subject to late payment fees in accordance with Rate Schedule C-1.
F. PRORATION OF BILLS
1. Bills for UtilityUtilities Services will be prepared for each Billing Period in accordance with the applicable Rate Schedules or CPAU contract applicable to the Premises served.
2. Proration is intended to produce a uniform average unit cost for the commodity regardless of the number of days in the Service period. Services will be prorated if the number of actual Service days differs from the number of days in the applicable Billing Period. Electric
BILLING, ADJUSTMENTS AND PAYMENT OF BILLS RULE AND REGULATION 11
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 4-2-20183-01-2022
Sheet No 4
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Demand (kW) and Electric Power Factor Charges will not be prorated. Proration will not occur for those Rate Schedules that contain Meter fees, connection fees, deposits, and other miscellaneous fees.
3. If Rate Schedules change during the Billing Period, Charges will be prorated on the basis of the number of days covered by the previous Rate Schedule and the number of days covered by the new Rate Schedule.
G. DELINQUENT BILLS AND LATE PAYMENT CHARGES
1. Utilities Charges incurred in the applicable Billing Period are due and payable by the “Due Date” indicated on the front of the bill statement. Bills unpaid by the due date are delinquent and a late payment Charge will be added to the outstanding balance as specified in Rate Schedule C-1.
2. Residential and commercial Accounts having unpaid balances older than 180 days shall be subject to collection action by the City. Collection action may result in notifications to credit reporting agencies.
3. Late payment Charges may be suspended by CPAU if the Customer is withholding full or partial payment pending final resolution of disputed bill. The late payment Charge may be waived by CPAU based upon the ultimate resolution of a disputed Charge.
4. Full or partial payments towards outstanding balances will be applied to the oldest outstanding Charges. Failure to pay outstanding balances will result in late fees and termination of Service for non-payment.
5. In the event that a Customer donating to the ProjectPLEDGE Program has a delinquent bill, the late Charge percentage will not be applied to the amount of the Customer’s pledge. However, the Customer’s participation in ProjectPLEDGE will be discontinued after three consecutive Billing Periods in which the Customer has not included their pledge amount in the bill.
6. Customers whose Utility bills include payments of principal and/or interest on loans from CPAU which are secured by deeds of trust on real property shall be charged a late payment Charge when any current Utility bill includes an unpaid installment on such loan from a prior bill. Nothing in this Rule and Regulation shall be construed to alter in any way the duty of the Customer to pay any installment on a loan from CPAU when due, or to alter the rights of CPAU to enforce the payment of such installments.
BILLING, ADJUSTMENTS AND PAYMENT OF BILLS RULE AND REGULATION 11
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 4-2-20183-01-2022
Sheet No 5
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H. DISPUTED BILLS If bill accuracy is questioned or disputed by the Customer, Customers shall request an explanation from CPAU within the current Billing Period or as soon as reasonably possible. After reviewing the disputed bill, CPAU will:
1. Issue a corrected bill to the Customer or reflect the correction on the bill in a subsequent Billing Period.
2. Determine if an amortization period (“payment arrangement”) for the Charge-in-question shall be provided by CPAU. If a payment arrangement is offered by CPAU and agreed to by the Customer, Utility Services will not be discontinued for nonpayment while the Customer complies with the payment arrangement for the “past due” balance , and subsequent Utilities bills are paid on time during the payment arrangement period.
3. Advise the Customer that the bill is correct as presented. The Customer may choose, at the Customer’s option, to have the Meter removed for testing under the Provisions of Rule 15 “Metering” and payment of the applicable fee found in Rate Schedule C-1 “Exchange Meter for Accuracy Test”.
I. METERED SERVICE BILLING ERRORS AND ADJUSTMENTS Where a Customer has been undercharged or overcharged for metered Service, the date and cause of which can be reliably established by CPAU, the retroactive billing adjustment (back bill or refund) shall not exceed three years. The maximum bill adjustment for undercharges shall be $500 per Account, per incident.
1. When, as a result of either a CPAU or a Customer-initiated accuracy test, an Electric or Gas Meter is found to register more than two percent (2%) fast or a Water Meter is found to register more than one and a half percent (1.5%) fast, CPAU will refund the Customer the overcharge based upon the corrected Meter readings for the period the Meter was in use, or three years, whichever is less. Any applicable late payment will be waived.
2. When, as a result of a test, a Customer’s Electric or Gas Meter is found not to register or to register more than two percent (2%) slow, or a Water Meter is found not to register or to register more than one and half percent (1.5%) slow, CPAU may bill the Customer for the undercharge base on an average bill. The bill will be computed based on an estimate of the Customer’s consumption during a prior month in the same season or on the consumption in the same period of the prior three years.
BILLING, ADJUSTMENTS AND PAYMENT OF BILLS RULE AND REGULATION 11
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 4-2-20183-01-2022
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3. When, a billing or consumption problem has been investigated and verified, Utilities will attempt to notify the Customer within 30 working days or a reasonable amount of time depending on the complexity of the error. 4. When CPAU is the cause of an error that results in an overcharge, CPAU will refund the full amount of the overcharge, subject to the three year retroactive billing adjustment period described above. Back bills for undercharges will be determined and approved by the General Manager of Utilities, or delegate, and may be waived in an amount up to $2,500 per Customer Account, per incident, subject to the three year retroactive billing adjustment period described above.
J. UNMETERED SERVICE BILLING ERRORS AND ADJUSTMENTS Where a Customer has been undercharged or overcharged for unmetered Service, the date and cause of which can be reliably established where a customer has been undercharged or overcharged, the retroactive billing adjustment (back bill or refund) shall not exceed three years.
K. THEFT OF SERVICE
Where there is evidence that meter tampering or theft of Utility Service has occurred, CPAU will retroactively bill, and collect any underpayment or nonpayment of Charges as well as any labor or material costs related to investigating the theft and making any required corrections. The applicable period to assess Charges shall commence from the date it can be reasonably established the theft began to the date in which the underpayment was discovered and initially established. The labor and material costs related to investigating the theft will be calculated in accordance with Utility Rate Schedule C-1 and/or any other applicable Utility Rate schedules. All underpayments or non-payments shall become immediately due and payable. Customers committing theft of Utility Service may also be subject to legal action pursuant to Rule 1, California Penal Code sections 487,496, 498, 591, 592, 593 and California Civil Code sections 1882 through 1882.6. Customers billed for theft of service can dispute the charges by following the process described in Rule and Regulation 11.H. If that process does not resolve the matter, customers billed for theft of service may, within thirty (30) calendar days, request (by telephone, in writing, or in person) an administrative hearing. If a hearing is requested, the city manager or his designee shall schedule a date and time for said hearing as soon as possible after the request is filed, but no later than ten (10) business days after the filing of such request for hearing. At the hearing, the customer billed for theft of service may offer evidence in person or in the form of a written statement, setting forth the reasons why the customer believes the determination of theft is incorrect. Utilities personnel shall also be allowed to offer whatever evidence they may have as to
BILLING, ADJUSTMENTS AND PAYMENT OF BILLS RULE AND REGULATION 11
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 4-2-20183-01-2022
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why they have established the customer engaged in utilities theft. The city manager or his designee shall make a determination as to whether the customer is liable for the charges for theft of service.
L. WATER LEAK CREDITS
The General Manager of Utilities, or delegate, may approve Water leak adjustments for Customer’s Water and Wastewater Accounts (when Wastewater charges are based on Water consumption) under the following conditions: 1. Customers having higher-than-average Water consumption for a particular billing period due to leaks may request a Water and/or Wastewater Leak bill adjustment, as applicable. 2. Applications for Water and Wastewater leak bill adjustments must be submitted to the Utilities Department within 60 days from the bill’s due date, for the bill covering the period in which the higher-than-average Water consumption occurred. 3. Customers are restricted to one Water and/or Wastewater leak billing adjustment in each 36-month period. 4. Higher-than-average Water consumption is defined as the volume of water greater than 100% of the Customer’s normal consumption compared to the Customer’s historical consumption over the prior three years, calculated by CPAU using prior averages for the relevant billing period(s). 5. Leaking systems must be repaired before the Customer receives a Water or Wastewater leak bill adjustment, to ensure future bills are not impacted by the same leak. Shutting off the source of the leak is not considered a repair. Undetermined or general high water consumption is not eligible for adjustment. 6. Water leak bill adjustments will be applied to Customer bills based on the higher-than-average water volumes calculated by CPAU. Water leak bill adjustments will be applied to 50% of the calculated higher than average water volume, to a limit of $2,500, using the Tier 1 Commodity Rate cost of the appropriate residential or commercial Water Rate Schedule. 7. Wastewater bill adjustments related to Water leaks will be made based upon the adjusted Water volume, and are not included in the $2,500 Water leak bill adjustment limit. 8. Utility User Tax (UUT) billing adjustments related to Water leaks will be made based upon the adjusted Water volume and are not included in the $2,500 Water leak bill adjustment limit. 9. Administrative decisions regarding Water and Wastewater leak bill adjustments, including eligibility, volume calculations, and adjustment costs will be made by the General Manager of Utilities, or delegate, and are final.
BILLING, ADJUSTMENTS AND PAYMENT OF BILLS RULE AND REGULATION 11
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 4-2-20183-01-2022
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M. REFUSE BILLING ERRORS, DISPUTES AND ADJUSTMENTS 1. Adjustments to the Refuse bill shall be requested to the City’s Collector. Customers with adjustments unresolved by the City’s Collector, may dispute their claim with the City’s Public Works Department, Refuse. Billing adjustments will be resolved by following the City’s Rules and Regulations, Chapter 5.20 of the Palo Alto Municipal Code and specific regulations promulgated by the City Manager pursuant to the authority established in Chapter 5.20. 2. When an error in billing has occurred, the date and cause of which can be reliably established where a Customer has been undercharged or overcharged, the retroactive billing adjustment shall not exceed three years.
(END)
6055259
Resolution No. _____
Resolution of the Council of the City of Palo Alto Amending Utilities Rule
and Regulation 11 (Billing, Adjustments and Payment of Bills)
R E C I T A L S
A.In 2006, the City of Palo Alto created a credit card policy (ASD 1-47) to
establish guidelines on the acceptance of credit card payments. The City did not charge
a convenience fee for credit card payments. To limit credit card processing fees
absorbed by the City of Palo Alto Utilities (CPAU), CPAU did not accept credit card
payments of more than $10,000 per month from a single account.
B.The $10,000 payment limit was lifted in 2013, in order to provide more
payment flexibility to CPAU’s large commercial customers.
C.Since then, more customers have been paying their utility bills by credit
card. In addition, credit card companies have been increasing their credit card charges.
Credit card fees for utility payments have increased by 141% in the past five years from
$472,217 in FY 2017 to $1,139,418 in FY 2021.
D.In November 2021, CPAU received 9,200 credit card payments ranging
from $1 to $75,000. Of the 9,200 credit card payments; 9,100, or 98.9%, of the
payments were less than $5,000.
E.Staff recommends amending Utility Rule and Regulation 11 to set $5,000
as the maximum amount customers may charge when paying their utility bill via credit
card. With the new maximum credit card amount of $5,000, approximately 100 utility
customers will be required to switch to an alternative payment method, which would
potentially reduce the total credit card fee amount charged to the City by 50%, or
$550,000.
NOW, THEREFORE, the Council of the City of Palo Alto RESOLVES as follows:
SECTION 1. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code,
Utility Rule and Regulation 11 (Billing, Adjustments and Payment of Bills) is hereby
amended as attached and incorporated. Utility Rule and Regulation 11, as amended,
shall become effective February 08, 2022.
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Attachment C
6055259
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SECTION 2. The Council finds that the adoption of this resolution does not meet
the definition of a project under Public Resources Code Section 21065 or CEQA
Guidelines Section 15378(b)(2), thus, no environmental assessment under the California
Environmental Quality Act is required.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST: APPROVED:
____________________________ _________________________________
City Clerk Mayor
APPROVED AS TO FORM: _________________________________
City Manager
____________________________
Assistant City Attorney _________________________________
Director of Utilities