Does the Shutdown Mean Shutoffs?

As the partial Federal government shutdown persists, local governments from around the state have begun to ask how to handle requests from furloughed federal workers for utility bill deferments and/or fee waivers. For utility deferments and fee waivers, the key is to have policies in place to avoid gifting of public funds, and to ensure that the jurisdiction is not being arbitrary in its decision-making. Examples of current codes and programs are at the end of this post, in addition to other resources.

While we’ve seen many stories about federal and contracted workers who are furloughed without pay, and those continuing to work without pay, there are further complications waiting in the wings if the partial shutdown continues beyond January 31 and funding runs out for nutrition and housing assistance programs.

Deferred utility payments

Last week, a city asked MRSC if it could legally grant extensions on utility bills only for those residents affected by the federal government shutdown. The answer is that if your city or town has a process in place to grant extensions on utility bill payment, you should follow that procedure. Those affected by the shutdown and applying for deferment would presumably be claiming financial hardship and would likely qualify under an existing program if your jurisdiction has one in place.

West Richland allows for up to two payment deferrals each year. The account holder must apply. If the account holder is a tenant, the property owner must sign the application. A fee of 10% of the total balance due—to a maximum of $20—is charged for the deferment.

Cashmere allows for one deferred payment in a 3-month period. The application must be made by the property owner, and the city's Clerk-Treasurer arranges a ‘reasonable and feasible’ payment program for the customer.

Fee Waivers

MRSC also received a question about fee waivers for delinquent accounts (see below):

We are trying to find out if we have the authority to remove water, sewer, and/or storm drainage assessment penalties when correctly charged to an account? This would be a 1-time penalty waiver to the account. Is this considered a gift of public funds? Is there an RCW for or against this type of waiver?

MRSC’s position has been that a utility can waive late charges and penalties, but only when done pursuant to an ordinance or written policy that clearly describes the circumstances under which the waiver will be granted. Having a policy in place helps the jurisdiction avoid any accusations that it is making a gift of public funds or that its decision-making is arbitrary.

Bainbridge Island and Stanwood are two jurisdictions that have policies in place codifying the terms of fee waivers.

Utility Donation Programs

Utility donation programs are different than utility discount programs. These programs generally offer temporary emergency assistance for utility customers.

Last week, a city contacted MRSC to ask whether it could administer its own utility donation program. The short answer is: “No.” Water and sewer districts are given direct statutory authority to solicit voluntary contributions for utility bills (RCW 57.46.010). Other utility providers collect donations from customers and the program is administered separately by a nonprofit. Utility customers may contribute to the program via their utility payment. The utility payment is recorded to the customer account, and the donation is recorded into a separate fiduciary account established for the donation program. Donations are held in a fiduciary capacity and a separate, private nonprofit organization reviews assistance requests and provides direction to the agency on which customers qualify for assistance.

What Else May Be Affected?

If the partial shutdown continues past January 31, funding for some programs will be exhausted or nearly so. Residents who access these programs may be at greater risk of losing their housing, and local support entities can expect an increase in demand for assistance. Here are some of the assistance programs that may be affected, possibly impacting Washington State residents.

The Department of Housing and Urban Development

The Department of Housing and Urban Development (HUD) released a Shutdown FAQ that includes which HUD activities will continue and which will be affected in the event the shutdown continues.

Among the activites that may be affected is rental assistance in the form of housing choice vouchers, public housing, and tribally designated housing. The HUD recommends contacting local public housing authorities or tribally designated housing authorities, as these entities have been informed to use ‘prior year funding’ until it is exhausted. The housing choice voucher program is funded on a calendar year basis, and housing assistance payments to public housing authorities will not be processed during the shutdown.

The Department of Agriculture

These Department of Agriculture programs are funded through February and may have funds to continue through March:

• Supplemental Nutrition Assistance Program (SNAP) benefits
• Subsidized school lunches
• Special Supplemental Nutrition Program for Women, Infants, and Children (WIC)

However, shelter space, food bank stocks, and meal programs for students may be pushed beyond their current resources.

Additional Resources

Below is a sample of municipal codes addressing utility bill deferment:

• Bremerton Municipal Code 15.07.100—Deferred payments
• Cashmere Resolution 02-2016—Deferred payments allowed once every three months
• Cashmere Application for Deferred Payment
• West Richland Municipal Code 13.90.020—Deferred payment agreements
• West Richland Application for Deferred Payment

Below is a sample of municipal codes addressing fee waivers:

• Bainbridge Island Municipal Code 3.88.190—Penalty for late payment
• Stanwood Municipal Code 12.20.020(3)—Late penalty

Below is a sample of municipal codes addressing utility donation programs:

• Friday Harbor, which has had a program in place since 2005
• Washougal
• Seattle
• Lake Stevens Sewer District

Here is some additional information and general resources:

• MRSC’s Utility Discounts and Financial Assistance Programs webpage
• Employment Security Department's webpage for furloughed Federal workers
• The Washington State Attorney General’s Office Consumer Alert webpage with resources and advice to federal workers during the shutdown.

Questions? Comments?

If you have comments about this blog post, please comment below or email me. If you have questions about this or other local government issues, please use our Ask MRSC form or call us at (206) 625-1300 or (800) 933-6772.