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COVID-19 and Water Utilities: FAQ

COVID-19, the illness caused by the novel coronavirus, has caused numerous shutdowns and cancellations around the globe since it first appeared last December. The TRWA Legal Department has fielded a high volume of calls about how best to conduct business, elections and annual meetings during these uncertain times. This is a special edition of "Keep It Legal" to address some of these more common COVID-19/Coronavirus-related questions.

 


Updated Tuesday, May 12             

 

Q:  On March 27, congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $2 trillion package designed to aid individuals and entities impacted by the coronavirus situation and subsequent business shutdowns. Are rural water systems eligible for the Paycheck Protection Program (PPP) or Economic Injury Disaster Loan (EIDL) program?

 

A:  While the CARES Act has already been signed into law, its true value to water utilities will likely come down to the manner in which it is implemented, a process which our national organization, the National Rural Water Association (NRWA), is monitoring closely. The bill includes provisions that can assist customers in paying bills (the PPP), as well as a Small Business Administration (SBA) loan program to help employers cover payroll, rent, and other expenses (the EIDL). Please note that as of April 21, 2020, the funds allocated by Congress for these programs have been depleted; however, Congress is expected to allocate additional funding which might be available by the time this article is published. Additionally, we have heard of some WSCs and Districts both in Texas and other states who have successfully obtained funding through these programs despite the eligibility criteria discussed below, and Congress could expand eligibility for these programs by the time this article goes to print; therefore we encourage all interested utilities to apply and let lenders make the final determination as to their eligibility.


The PPP provides forgivable loans to assist qualifying entities in covering payroll costs; unfortunately, neither WSCs nor Districts qualify for the program at this time, though NRWA is working in Washington to have them included in the next round of Coronavirus legislation. The program is administered through local lenders, so TRWA encourages interested members to work with their banks to put together an application regardless so that they are ready to apply if eligibility is expanded in future legislation. The EIDL program is available to all nonprofits, including WSCs, and provides eligible organizations with non-forgivable loans at a rate of 2.75 percent. Loans can be for up to $2 million and can be used for any business purpose due to temporary loss in revenue, but not for business expansion. Applicants can also receive a $10,000 grant within three days of applying for the loan, though the loan may take up to a month to receive. Applications for this program are processed directly through the SBA website. As political subdivisions, districts are not eligible for this program, either.


Additionally, NRWA is working closely with legislators in Washington for more tailored relief for water utilities in subsequent coronavirus relief bills. Specifically, they are advocating for funding to USDA Rural Development to assist utilities that are financially impacted by lost or reduced customer revenue during the crisis. The goal is to provide affordable financial assistance necessary to keep staff employed and ensure the utility’s current and ongoing financial sustainability. NRWA is also seeking funding for utilities that have to backfill operators or other staff if their employees become infected or are quarantined during this time. We will let you know as soon as we learn more about funding opportunities in the CARES Act or any subsequent legislation.

 

Q: A member of our water supply corporation has asked us to disconnect service at a rental property they own. The tenant of that property does not want service disconnected. Should we disconnect service here in light of the Public Utility Commission’s (PUC) recent guidance that utilities not disconnect service during the ongoing pandemic emergency? Does it matter whether the tenant has kept up with their utility payments?

A: This is a tricky situation that WSCs might find themselves in given the unique nature of their relationships with property owners and their renters. Under normal circumstances, we would advise members that they are free to disconnect service regardless of whether the tenant’s account is current, because most WSCs have a customer relationship with the property owner, not the renter. However, given the PUC’s recent steps to prohibit disconnections by investor-owned utilities, as well as many jurisdictions’ prohibiting landlords from evicting tenants for nonpayment during the crisis, we caution our members against disconnecting a tenant’s water service during this time.


In normal times, a property owner can request that the utility disconnect service regardless of whether the tenant has kept their account current. The Property Code gives the renter some remedies against their landlord for interfering with their utility service, but that is a private dispute between them that can be resolved without the utility’s involvement. While the PUC’s recent order only directly prohibits investor owned utilities from disconnecting water service, we have advised our WSC and district members to voluntarily implement similar policies to avoid any negative or legislative attention that might come from disconnecting service during this emergency.


Unfortunately, the renter/landlord scenario places the WSC in a tenuous position. Landlords will likely take issue with being forced to pay for water service they no longer want if utilities refuse their disconnection requests, but renters could cause problems for systems in the court of public opinion if their service is disconnected during a pandemic. If a WSC chooses to comply with a property owner’s request to disconnect service to their rental property, the system should be careful to follow all required steps in their tariff, including giving adequate notice to the renter before disconnecting. Also, be sure that the landlord’s request is documented in writing before disconnecting service.


Q: Due to social distancing guidelines and reduced revenues caused by the COVID-19 pandemic, we are having to look at reducing the hours of some of our employees. How do we go about doing that while minimizing the financial impact on those employees?


A: Since utilities provide an essential service and they will need the full strength of their workforce once this crisis ends, TRWA recommends maintaining your workforce at full capacity as long as it is financially feasible. However, if the continued sustainability of your utility depends on reducing hours for some employees, you can help soften the blow for them by utilizing the Texas Workforce Commission’s shared work program, which allows employers to reduce an employee’s hours and supplement their wages with partial unemployment benefits.

 

Employers can tailor a shared work program based on different departments, shifts or units, each of which must have at least two employees. This allows the employer to focus benefits on areas most affected by the current downturn. Additionally, the employer is free to return individuals to full-time on a temporary basis and then continue the plan as needed. Employees participating in shared work unemployment benefits must reduce their normal weekly work hours by at least 10 percent but not more than 40 percent, and the reduction must affect at least 10 percent of the employees in any business unit or shift. More information can be found at: https://www.twc.texas.gov/businesses/shared-work.

 

Q: Would reducing an employee’s hours impact their insurance coverage under our policy?

A: You will want to verify with your insurance carrier, but generally employers may continue paying their employees’ premiums to maintain their coverage even if the employee drops below 30 hours per week.

Q: What benefits are available if we have to lay people off entirely?

A: In the case of layoffs, you might consider filing a mass claim with the Texas Workforce Commission on the affected employees’ behalf. This can help streamline the process of obtaining unemployment benefits for those employees, and possibly alleviate some of the long wait times people have experienced due to the high volume of claims the commission has been processing during this emergency. You might also consider directing affected employees to the commission’s step-by-step tutorial and remind them that the Commission encourages people to file their claim in off hours (between 10:00 p.m. and 8:00 a.m.) to avoid overburdening their system. The tutorial can be found online at: https://www.twc.texas.gov/files/jobseekers/tutorial-apply-for-benefits-online-twc.pdf.


Individuals who are laid off during this emergency might also be eligible for up to $600 per week in additional benefits, which the federal government passed in the Coronavirus Aid, Relief and Economic Security (CARES) Act. Texas Workforce Commission will automatically notify applicants for standard unemployment benefits if they qualify for these additional benefits.


Q: An employee is displaying symptoms of COVID-19, can an employer require the employee to go home?

A: Yes. During a pandemic, an employer is allowed under the ADA to require an employee to leave the workplace, particularly if the employee is exhibiting symptoms that would pose a threat to the remaining workforce.

Q: Can an employer ask an employee whether the employee has symptoms of COVID-19 (e.g., fever, shortness of breath, etc.)?

A: Yes, an employer can ask if an employee is experiencing symptoms of COVID-19. However, any information received from the employee must be treated as confidential medical information. Therefore, as with any other employee medical information, such information must be stored in a confidential file, separate from the employee’s personnel file. Additionally, employers should not disclose the identity of an employee diagnosed with COVID-19 or experiencing symptoms of COVID-19.

Q: Many jurisdictions have limited the number of people who can congregate in one place, and some have restricted public gatherings altogether. Can we conduct our board meetings and annual meetings by phone or videoconference?

A: Yes, subject to a special order of Governor Greg Abbott. Under normal circumstances, the Texas Open Meetings Act (TOMA) reserves telephone and videoconference meetings strictly for emergencies, and in the case of videoconferences they are subject to extremely burdensome technical requirements that often make them impractical. While well-intentioned, these rules are simply unworkable during an ongoing pandemic. TRWA joined with the Texas Municipal League in requesting the Governor make exceptions to these requirements. In March, Governor Greg Abbott signed an executive order suspending many of these requirements until his March 13, 2020 disaster declaration is lifted or expires.


Under the order:

  • Boards may meet by phone or videoconference without a quorum or presiding officer being physically present at a specified location, provided that a quorum participates in the meeting.
  • Systems are not required to post physical notice of the meeting as long as their online notice includes a toll-free dial-in number or free-of-charge videoconference link, along with an electronic copy of any agenda packet.
  • Systems are not required to provide the public with audio access to a phone or videoconference meeting to members of the public who are physically present at a specified location, as long as the dial-in number or videoconference link provided in the notice allows for the public’s two-way communication with the board.
  • The board must make a recording of any phone or videoconference meeting available to the public.
  • The new law requiring a public comment period at meetings is still in effect. However, boards are not required to facilitate face-to-face interaction if they offer alternative methods for the public to communicate with them. Dial-in communications, participation in group videoconferences, submission of questions by email, or other reasonable means of communication would presumably satisfy this requirement.

The governor’s order would also apply to your annual members’ meeting. There are numerous conference call services out there — TRWA uses Telspan for our phone meetings. For a fee, attendees can call a 1-800 number to listen and participate in the call.

For a complete list of the open meeting provisions that have been temporarily suspended, visit texasattorneygeneral.gov. Systems may contact the Office of the Attorney General with questions about the suspension order by telephone at (888) 672-6787 or via email at TOMA@oag.texas.gov. Officials with questions about teleconference and videoconference capabilities offered by the Texas Department of Information Resources should visit dir.texas.gov or call (512) 475-4700.

Q: Can we still disconnect customers’ service for nonpayment or other violations of our tariff or rules during a declared state of emergency? What do we do about late fees?

NOTE: The answer below is subject to the Governor’s ongoing emergency declaration, which was still in effect as of April 21, 2020. Utilities will be able to disconnect service as usual once the emergency declaration has been rescinded. Please check www.trwa.org/covid19 to verify the current status of the governor’s declaration.

A: WSCs, Districts and Cities are free to decide the policy that is best for their communities, but TRWA recommends that they not disconnect service during the COVID-19 emergency. On March 26, the Public Utility Commission (PUC) issued an order banning disconnection of water and power service by privately owned utilities and requiring them to put customers on deferred payment plans. The order lasts until the governor’s ongoing disaster declaration is terminated, and although it only applies to investor-owned utilities, other types of utilities are strongly encouraged to voluntarily implement similar measures to avoid negative press and possible legislative repercussions in the future. No system wants to be painted in the media or in a legislative hearing as being responsible for exacerbating a pandemic in their area by disconnecting service at a time where people are required to be home and vigilantly washing their hands.

As for late fees, utilities are free to implement whatever policy makes the most sense for their communities. Some systems have chosen to waive fees, at least for a time. Others are allowing the fees to accumulate, but putting customers on a payment plan. I have also heard of some systems who are requiring customers to demonstrate financial need due to the COVID-19 situation, such as a letter from an employer describing a layoff or furlough, or proof that they recently applied for or obtained unemployment benefits. No matter what policy you implement, if you’re not waiving late fees entirely, it is important to communicate to your customers that they are still responsible for their fees and bills, even though you aren’t using your usual enforcement mechanism — disconnection –— during this time.

 

If you have a legal question you would like answered, please email legal@trwa.org.

 

 

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