Thousands of San Jose residents behind on water bills

The number of San Jose homes and businesses with overdue water bills spiked during the COVID-19 pandemic, and many could see their taps run dry when the state ban on water shutoffs ends in December.

At least 1,160 customers have unpaid bills totaling a combined $1.1 million with the San Jose Municipal Water System as of June, according to a city audit published earlier this week.

The amount owed is 18 times greater than the balance owed in December 2019, according to the city auditor--a testament to the financial struggles of San Jose residents during the pandemic. City spokesperson Carolina Camarena told San Jose Spotlight the average residential customer owes $678 as of June.

On Monday the city's transportation and environment committee will hear the auditor's report, which includes recommendations for how to improve billing practices, such as automatically enrolling delinquent customers in payment plans and making it easier for residents to access billing information.

Owned and operated by the city, Municipal Water serves about 12 percent of the city's population--26,000 customers based in North San Jose, Alviso, Evergreen, Edenvale and Coyote Valley. Two other water retailers--San Jose Water Company and Great Oaks Water Company--serve about 80 percent and 8 percent of the city population, respectively. Earlier this year, the City Council approved a rate hike for Municipal Water's ratepayers.

Keeping taps flowing

The audit's most serious recommendations focus on how to prevent water being shut off once California's moratorium ends Dec. 31. Municipal Water can shut off the tap if a bill is delinquent for more than 60 days. When the moratorium ends in a few weeks, hundreds of Municipal Water customers will be in danger of having their water turned off.

Camarena said the city is applying for a state program which covers water debt for customers accrued between March 4, 2020 and June 15, 2021. The city will also develop a detailed work plan for preventing shutoffs.

"We need to give this issue the same level of seriousness and attention as we have for evictions," said Councilmember David Cohen, who serves as vice chair of the committee. He told San Jose Spotlight he's concerned about the lack of financial aid information in languages other than English on the Municipal Water site.

Bills piling up

San Jose suspended late fees for Municipal Water customers from March to June 2020. But late fees resumed in July 2020--residents are generally charged 10 percent of their bill. As of June, customers have been charged $489,000 in late fees collectively.

Municipal Water has assistance programs for low-income customers, including fee waivers and extended payment plans. But as of September, no customers have enrolled, according to the audit. The auditor recommends automatically enrolling customers with overdue balances in payment plans when the moratorium ends.   

Camarena said the city is developing a web-based electronic form for customers to register as low-income and receive benefits, such as late fee waivers or extended installment plans, and expects to have this available on the city website within the next two months.

Neither of San Jose's other water retailers charges late fees. San Jose Water Company offers payment plans to customers and uses a water rate assistance program that lets qualifying customers reduce their water bills.

Liann Walborsky, spokesperson for San Jose Water Company, said she couldn't divulge how many of the company's roughly one million customers are behind on bills. But she said the number swelled during the past two years.

"We do certainly have a fair amount of customers who are in arrears," Walborsky told San Jose Spotlight. "It is mainly due to the pandemic. It grew during that time to a larger amount than it would be compared to another year."

Walborsky said if the moratorium on water shutoffs ends on Dec. 31, the company will give customers a grace period of at least 72 days to catch up on bills.

Tim Guster, general counsel and vice president of Great Oaks Water Company, said about 2,000 of its 22,000 customers reported past-due bills in September, totaling roughly $250,000 to $275,000. By comparison, there were zero past-due bills at the end of 2019.

Guster noted that Great Oaks has applied for a state program that helps local utilities pay off unpaid pandemic bills. He told San Jose Spotlight that assuming Great Oaks receives the funds, it will be able to clear the debt for virtually all of the accounts in arrears.

"We do not expect there to be dire consequences when the moratorium ends," Guster said.