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San Marcos council asks staff to waive late/reconnect fees and tighten assistance counting to stretch utility help
Summary
Facing rapidly depleted partner allocations, councilmembers directed staff to waive late and reconnection fees for customers assisted through the city's utility payment assistance program and to change how multi‑month pledges count toward annual assistance limits; staff will implement changes now and return with data in September.
At a May 19 work session the San Marcos City Council reviewed the expanded Utility Payment Assistance (UPA) program and gave staff immediate direction to preserve limited funds and extend help across more households.
Program background: staff said the city expanded UPA in fiscal year 2025 to distribute funding through four local partners (BCL; Community Action; Communities in Schools; Salvation Army). That expansion enabled distribution of more than $133,000 over roughly 300 households in FY25; FY26 is on track to deliver a similar level of support, but partner allocations are spending down rapidly. "In FY25 we provided this assistance to 335 households and this year to date we have 302," staff told council during the presentation.
Why council acted: agencies reported fast spend‑out rates (for example, BCL spent its initial allocation in 28 days; Salvation Army used its allocation in four months), and staff warned a gap in available resources would appear before the fiscal year ended. Councilmembers asked whether reconnection and late fees were consuming assistance dollars; staff confirmed the fees were billed and counseled council that a policy direction could stop assistance dollars being used to pay those fees.
Council direction: after discussion the council reached consensus on two near‑term operational changes: - Waive late, reconnection and similar fees for customers receiving assistance through the city UPA program so donated/allocated funds are used for utility charges rather than fees; and - Change how a single multi‑month pledge counts toward the annual instance limit so that, for example, a three‑month pledge counts as two assistance instances rather than three (the council also discussed reducing the number of allowed instances per year). Several councilmembers asked staff to track the fiscal effect of these changes and report back with a data set by September for possible further refinement.
Staff details and next steps: program staff recommended maintaining the program limit of four assistance instances per fiscal year and covering up to 60 days in arrears plus fees, but they suggested counting each month's bill as one 'instance' to shrink large single pledges that exhaust partners' allocations. Agencies suggested adding 'hardship/emergency' to eligibility criteria so staff could prioritize urgent needs. Council asked staff to return with clearer data on seasonality and how partner funds (such as Community Action’s larger SEAP pool) interact with city allocations.
What customers said: in a short survey staff ran in April customers praised the program's ability to keep utilities on but flagged barriers such as lengthy applications, lack of transportation to agency offices and limited access to printers for documentation.
Outcome: staff will implement the fee waivers and the modified counting approach now and provide a comprehensive report with usage data and fiscal impacts at the September meeting cycle so council can consider any further eligibility or cap changes before the FY27 budget adoption.
