Title
Consider recommendation from the Finance/Administrative Committee to clear delinquent aquifer management fees of certain former permit holders and other small balances.
Body
RECOMMENDED MOTION:
Move the board approve the clearing of delinquent aquifer management fees of certain former permit holders and other small balances and authorize the General Manager to take all necessary actions to do so.
SUMMARY:
The purpose of this agenda item is for the board to consider a Finance/Administrative Committee recommendation to clear delinquent aquifer management fees of certain former permit holders and other small balances. Edwards Aquifer Authority Rules require all applicable persons withdrawing groundwater from the Aquifer to pay an aquifer management fee (AMF) as assessed by the EAA. To accomplish this, no later than December 31 of each year, EAA staff mails an invoice to all non-agricultural users, based on their permitted amount and the AMF rate set by the Board. These AMF invoices become delinquent if payment is not received by March 1st of that following year. Additionally, if groundwater withdrawal rights are involved in a lease-transfer from a permit holder (‘transferor’) to another well owner (‘transferee’), and the transferor has not paid the AMFs on the rights to be transferred, then AMFs on the amount transferred are invoiced to the transferee for payment. These transfer AMFs become delinquent when not paid by December 31st of the year the transfer is in effect.
An invoice for AMFs for agricultural use is generated and mailed to an irrigation permit holder after submittal of their annual groundwater use report (AUR). This invoice is generated based on the amount of actual use (in acre-feet) multiplied by the $2 statutory agricultural fee rate.
When AMF invoices become delinquent, a violation case file (“Violation Number”) is created and EAA compliance team staff follows up with a written Delinquent Fee notice to the permit holder to solicit payment of these late fees. Additionally, in subsequent years, delinquent AMFs are solicited with current year AMF invoices.
From time to time, groundwater withdrawal permits are transferred through a change in ownership ("sale") without collecting associated delinquent AMFs. EAA Compliance records show ten (10) permit holders were assessed AMF invoices for one or several years that remained delinquent, and that these permit holders have subsequently transferred ownership of the permits. The years of non-payments range from 2009 to 2020, and represent a sum total of $4,117.71. The unpaid fees from these former permit holders is shown, by violation case number, in the attached document.
Since these permit holders no longer own the water rights associated with these delinquent invoices, EAA staff recommends that these invoices be voided, and no further action be taken to collect these amounts.
Separate from the identified list of delinquent invoices, there are 28 permit holders/previous permit holders with a cumulative total of $3.28 in outstanding amounts that EAA staff is recommending writing off of the EAA books. EAA staff has made multiple attempts to clear these balances, but due to the minimal balance amount(s) and the many inactive permit holders, EAA staff requests approval to clear these amounts as well.
At the meeting on March 28, the Finance/Administrative Committee voted to approve the recommended motion above.
M/WBE PARTICIPATION:
This agenda item does not involve the procurement of goods or services by the EAA and, therefore, this section is not applicable.
STRATEGIC PLAN REFERENCE:
This agenda item supports the general EAA mission.
FISCAL IMPACT:
The proposed amounts to be voided are included in the estimated bad debt allowance currently recorded in the EAA Statement of Net Position; therefore, there will be a net impact of $0 to the EAA reserves.