Ability to Pay and Ability to Continue in Business. The ability to pay and to continue in business factor must be considered when assessing administrative civil liabilities. If the Water Board has sufficient financial information to assess the Discharger’s ability to pay the Total Base Liability or to assess the effect of the Total Base Liability on the Discharger’s ability to continue in business, then the Total Base Liability amount may be adjusted downward. In this matter, the Discharger is an ongoing governmental entity with the ability to raise revenue to satisfy the liability proposed through the imposition of fees and taxes and there is no information presented to date that would evidence the inability to pay.
Ability to Pay and Ability to Continue in Business. The ability to pay and to continue in business factor must be considered when assessing administrative civil liabilities. The California Department of Correction and Rehabilitation is a state agency with a Fiscal Year 16-17 budget of over $10 billion3. As such, it should have the ability to pay a penalty in the millions of dollars.
Ability to Pay and Ability to Continue in Business. SCORE = 1.0 (neutral) • TECHNICAL CONSIDERATIONS:
Ability to Pay and Ability to Continue in Business. The ability to pay and to continue in business factor must be considered when assessing administrative civil liabilities. The Enforcement Policy states that if the Water Board has sufficient financial information to assess the Discharger’s ability to pay the Total Base Liability or to assess the effect of the Total Base Liability on the Discharger’s ability to continue in business, then the Total Base Liability amount may be adjusted downward. In this matter, the Discharger is an ongoing entity with the ability to raise revenue to satisfy the liability proposed through the imposition of fees and taxes. In addition, a review of the Sacramento Area Sewer District’s 2015-2016 Final Budget (xxxx://xxx.xxxxxxxx.xxx/sites/main/files/file-attachments/2015-16_budget_book.pdf) shows that the District has a balanced budget which includes $1 million for contingencies and $4 million in reserve. Review of the publicly available financial information shows the Discharger has incoming revenue and there is no information presented to date that would evidence the inability to pay.
Ability to Pay and Ability to Continue in Business. The ability to pay and to continue in business factor must be considered when assessing administrative civil liabilities. The Enforcement Policy provides that if staff anticipates that the Discharger’s ability to pay or ability to continue in business will be a contested issue in the proceeding, then staff should conduct a simple preliminary asset search. Here, the Discharger is one of the nation’s largest electric utilities, serving a population of nearly 14 million via 4.9 million customer accounts. SCE had 18,069 full-time employees at December 31, 2011. SCE's operating revenue was approximately $10.6 billion in 2011, realizing a net income of $1.14 billion on assets of $40.3 billion and liabilities of $30.4 billion (SCE Annual Report, 2011, pages 16 and 39, available at xxx.xxxxxx.xxx) The Discharger thus has significant assets available to pay the proposed liability, as modified in Step 7 below, without causing undue hardship to the service population or to the Discharger. Moreover, the Discharger is a public entity with the power to levy fees that can be used to pay the some or all of the proposed liability.
Ability to Pay and Ability to Continue in Business. The Discharger’s ability to pay factor is 0.3. The Discharger will have difficulty paying the total base liability amount based on the following information: The State Water Resources Control Board (SWRCB) has determined that the Discharger’s POTW serves a small community, approximately 1,300 people, with a financial hardship as defined by CWC Section 13385(k)(2). The community of Niland has historically been an economically disadvantaged area, as is evidenced by the Discharger’s inability to make restitution on prior civil liability actions taken by the Regional Water Board. The median household income is $17,461 by the 2014 American Community 5-Year Survey, US Census Data, which represented 28 percent of the State’s median income for the same time period. Niland has a very high unemployment rate (35.6 percent unemployed, according to the Employment Development Department 2012 Average) and a Poverty Level of 45.2% per 2014 ACS. Another overriding factor is environmental justice to a population that is 77 percent minority and severely disadvantaged. The Discharger’s revenues are fixed and any additional revenue—which must be secured for proper operation and maintenance of the Preferred WWTF Project—will likely require substantial rate increases on a relatively small and limited community. NSD’s fees are collected by way of assessments on the property tax bill. NSD does not serve treated water and cannot terminate serve. These factors make collection very difficult and problematic. NSD experienced a 12% decline in population between 2000 and 2010. That trend continues.
Ability to Pay and Ability to Continue in Business. The Discharger’s ability to pay factor is 0.3. The Discharger will have significant difficulty paying the total base liability amount based on the following information: Please refer to previous discussion for “Ability to Pay and Ability to Continue in Business” (p. 3) for the CDO violations. Based on that information, the total base liability amount is adjusted to $11,812.50 ($39,375 x 0.3).
Ability to Pay and Ability to Continue in Business. The ability to pay and to continue in business factor must be considered when assessing administrative civil liabilities. The City of Lincoln is a public entity with the ability to raise funds. The City’s 2014-2015 budget was $82 million2 with a wastewater fund of $5.2 million.
Ability to Pay and Ability to Continue in Business. The Enforcement Policy provides that if a Regional Water Board has sufficient financial information to assess the violator’s ability to pay the Total Base Liability Amount, or to assess the effect of the Total Base Liability Amount on the violator’s ability to continue in business, then the Total Base Liability may be adjusted. In this case, the Discharger is a publically-owned entity and the 2015 fiscal year audited financial statements are available through the Imperial Local Agency Formation Commission, with whom they are currently associated.2 To evaluate the Discharger’s ability to pay, the Prosecution Team utilized the US EPA financial model MUNIPAY (Version 5.6.0). MUNIPAY uses financial information input from the most recent financial statement and demographic data collected by the US Census Bureau for the local area. In this case, the MUNIPAY output indicates that the Discharger does not have the ability to pay the Total Base Liability Amount. The 2015 financial statements indicate that the Discharger’s current liabilities (or liabilities payable in the near- term) exceed current liabilities (e.g. cash) by over $350,000. In addition, annual operating expenses exceed revenue by nearly $20,000. Demographically, NSD’s service area has a median household income of $19,653 and has seen a population decline from 2000 to 2014 of 7%. Nearly 50% of the population within this service area earns less than 125% of the poverty line. Based on this analysis, it is unreasonable to conclude that the Discharger can afford to pay the Total Base Liability Amount without additional funding. Based on their financial situation, outside funding may not be available without a substantial user rate increase. Based on the demographic analysis, a rate increase may be prohibitive as the Discharger’s rates appear to exceed $40 per month. As funding was secured from Imperial County, the Discharger may have the ability to pay. Based on financial and demographic concerns, the Prosecution Team recommends a reduction in the Total Base Liability Amount, which assumes the funding secured from the County. The proposed Total Base Liability Amount reduction is discussed under the subsequent section.
Ability to Pay and Ability to Continue in Business. Please refer to previous discussion for “Ability to Pay and Ability to Continue in Business” for the CDO violations.
