It seems like an easy call: Just like a private utility, the city of Sacramento should threaten to cut off service to customers who don't pay up.
Yet, it's somewhat more complicated for the City Council, which is scheduled to take up the proposal Tuesday evening, because of recent water and sewer rate hikes.
Starting last July 1, the bill for single-family customers increased by $3.44 a month for water and $2.36 a month for wastewater service. The rate hikes are helping fund repairs and upgrades to the city's utility system, including a main treatment plant.
The council approved a "lifeline" program to soften the blow for low-income homeowners. It basically offsets the increases by giving them discounts of $3.50 a month for water and $2.50 for wastewater.
But of the 1,600 applications as of May 31, about 75 percent had been denied, according to a report being heard Wednesday by the city's Utilities Rate Advisory Committee.
The problem, the Department of Utilities says, seems to be that the maximum income to qualify -- the federal poverty level -- is half as much as the income threshold used by SMUD and PG&E -- 200 percent of the poverty line. For a family of four, the maximum income for the city help is $23,050 a year.
Yet, the people applying for the lifeline program are also the most likely to not to be able to pay their bills on time.
Eligibility for the city's program was made so tight to make sure there would be enough money for the discounts. The city has set aside $914,000 the first year from the utility tax that would otherwise flow into the general fund. The utilities department is looking at increasing the discount or making more people eligible in 2013-14.
Some might be surprised that the city doesn't already use its authority to discontinue service. An audit last June found that Sacramento was writing off more unpaid bills than five comparable utilities, and recommended the city consider cutting off service to delinquent accounts.
The department estimates that cutting off service would mean a net revenue increase of $500,000 to $750,000 a year.
Under the staff proposal, there would be extensive public information before the cut-off policy takes effect Jan. 1. Even then, customers would have plenty of time to pay up.
Delinquency notices would go out once a bill is 60 days past due and a shut-off notice would go out at 75 days. There would be a 48-hour warning posted at the property before water or wastewater service is discontinued.
There are additional customer safeguards in state law: they can appeal or seek more time; the department can approve late payment plans; and service can't be discontinued if it would be life-threatening or if the customer makes less than $25,000 a year.
And, according to the staff report, this non-payment problem is likely to ease as there are fewer foreclosures -- without any city action.