NPU bills can’t be paid with grant

City agency had hoped to use virus relief funds to help some residents

Norwich — With nearly 19% of Norwich Public Utilities customers behind on their bills, Norwich Human Services had hoped to use a federal COVID-19 relief grant to help hardship customers pay at least a portion of their bills.

The city agency had planned to use $50,000 of a $200,000 COVID-19 relief federal Community Development Block Grant to help pay utility bills for some of the 518 city residents who have applied for hardship assistance.

But community development program coordinator Kathryn Crees said a directive from the U.S. Department of Housing and Urban Development prohibits the grant from being used for city-owned utility bills, saying that would amount to the city using federal grants to pay itself.

“As our office understands it, paying utilities to a grantee if it’s publicly owned may result in double-payments if the utility and the CDBG-(coronavirus) recipient are part of the same government,” a letter from Hartford HUD office representative Alanna Kabel said.

Norwich has been awarded two CDBG coronavirus relief grants, the first totaling $506,569 in April and a second grant totaling $544,143 announced last week but not yet allocated. The City Council approved allocating $200,000 from the first grant to Norwich Human Services to provide direct relief to residents, including rent payments, mortgage, car payments and utility bills.

The HUD restriction on so-called “double payments” to the city includes a prohibition on using CDBG coronavirus grants to help residents pay property taxes, Crees said. So, if a resident’s property taxes are included in a mortgage bill, any grant assistance to help make a mortgage payment would have to subtract the portion for property taxes, Norwich

Human Services Director LeeAnn Gomes said.

City officials were disappointed and disputed the ruling on utility bills, saying the assistance is for the low-income Norwich residents to help them get through tough economic times, including job loss caused by the coronavirus economic shutdowns.

“In reality what we’re doing is keeping low-income people in their homes,” Crees said.

“A lot of landlords have provisions in their leases that say if you don’t have power, you can get evicted. It’s a really awful Catch-22 we’re in here.”

On Monday, U.S. Rep. Joe Courtney, D-2nd District, and HUD Regional Administrator David E. Tille will meet with Norwich city officials at 11:30 a.m. at City Hall to discuss the use of the CDBG coronavirus grants.

Kassel wrote that if NPU can show through its auditors that the utility and the city have “a separation of interests,” the ruling could be reversed. NPU and the city Finance Department are working on documentation to make that argument.

Meanwhile, Norwich Human Services is rushing to apply for other grants to help the more than 500 residents seeking emergency assistance. About $25,000 in utility bill payments have been made through separate grants thus far, Gomes said, including a $15,000 donation from the Unitarian Universalist Church and small grants from the Chelsea Groton Bank Foundation, the Emergency Food and Shelter Program and donations from the public.

“We were fortunate to have other grants,” Gomes said. “We paid all the utilities bills under other grants that we had wanted to use the CDBG money for. It’s about $25,000 so far. I know it’s a drop in the bucket compared to the total amount owed to NPU.”

Through Sept. 17, NPU spokesman Chris Riley said, 18.9% of NPU customers across all rate classes are in arrears, for a total of $1.5 million in outstanding balances, both numbers up slightly from the previous week. NPU has worked out special arrangements with 758 customers, also up slightly from the previous week, he said.

Riley said the utility continues to advocate for the use of CDBG funds for customers to pay their past-due utility bills. NPU is working with the city’s corporation counsel to communicate with HUD officials in Hartford to try to change the ruling.

Gomes said she will be applying for other grants specifically for utility bill payments to replace the CDBG money and still is seeking donations from the public to help residents affected by the coronavirus pandemic.

Donations can be made out to Norwich Human Services and sent to Norwich Human Services, 100 Broadway, Norwich, CT 06360.