The city is continuing with use of a hardship policy for residents who are behind on utility payments.

The action is in response to a situation where approximately 40 south Modesto households receiving sewer service were retroactively charged up to three years' worth of service and sent out large delinquent bills. Last month the Ceres City Council appeared willing to look into waiving finance charges and give some delinquent residents terms of up to five years.

However, last week the council affirmed the policy on the books - adopted in 2011 - to allow the Finance Director to arrange payments for those who offer proof of a financial hardship.

City Manager Toby Wells said that some of those who protested the retroactive billings did not want to offer proof of a hardship.

City officials are giving those residents up to 15 months to complete payments since the bills were unexpected and large. In some cases, the city may work with the delinquent accounts for longer periods of time.

The city policy allows residents, who find even the 15-month repayment time frame too financially straining, to write a letter to the Finance Director indicating their requested change in the terms and conditions of the repayment agreement. Documentation is requested as part of the request. One of their options is the ability to have the outstanding balance placed as a lien on the property.

The policy was adopted in 2011 after it was discovered that there were about 50 delinquent accounts totaling under $500 and 44 accounts with balances of over $500.

Earlier this year the city shocked about 40 county households in south Modesto with bills for sewer services three years back for which they had not been receiving a bill. The households were mostly in the area south of the river and between Bystrum and Herndon roads. In most cases the city discovered that some second units on a single lot were being serviced but not billed. City Manager Toby Wells said that the discoveries were made from satellite photos. They were notified that the city is offering payment plans for the bills, which are due April 1.

State law allows cities to collect underbilled service for a maximum of three years but Wells said some second units escaped billing for decades.

The neighborhoods outside of the city limits began receiving service about 10 years ago. Since that time the city did not have the benefit of knowing about second units because it doesn't provide water service. Most of those units were garages converted to living space without a building permit. Audits through satellite photos allowed the city to flag the situation.

Wells said the city cannot disregard the shortages at the expense of other residents who pay their fair share of impacts to the city sewer system.

Rebecca Harrington, who sits as an elected member and chair of the South Modesto Municipal Advisory Council, said her 87-year-old mother, Emily Ortega was billed for $1,842.72. The extra charge stems from the city not realizing for years that a second unit on the property was getting service. Another son of Harrington's lives in the granny flat.

"We had no prior communication that there was a problem," Harrington told the council in March. "This is an exorbitant fee ... we're being made to feel as if we did something wrong."

Harrington believes residents should pay the extra fee going forward but not the retroactive bill, claiming they were unaware of the city's mistake.

Mayor Chris Vierra said he feels for the residents but cannot ask other residents to pay for the deficit.
Harrington didn't get anyone on the council to waive the debt but Bret Durossette suggested waiving the interest charges on those who need to make payments. The council agreed that, as a matter of policy, it would extend the same policy to others with second units who are found owing on under-billing.

The council said it would extend repayment to a five-year period.