CWA waives late penalty for Rainbow payment

The electronic payment the Rainbow Municipal Water District made to the San Diego County Water Authority didn’t process by the date it was due, so Rainbow was assessed a late penalty. The fault was in the electronic processing rather than Rainbow's lack of a payment attempt, so March 25, the SDCWA board unanimously approved a waiver of the penalty.

Rainbow purchased 700.5 acre-feet of water from the CWA during January 2021. Including fixed charges Rainbow’s payment to the CWA for that month was $1,299,620.70. The invoice was dated Feb. 9, and Rainbow’s payment was due March 15.

Because the payment was not due until March 15 and was an electronic transaction, Rainbow chose to receive interest on the district’s account balance rather than making the payment before the day it was due.

“You have that in the bank every day you can,” Tom Kennedy, Rainbow general manager, said. “We do it every month. We’ve never been late before.”

The transaction from Rainbow was originally completed March 15.

“You think it goes and somehow it doesn’t line up,” Kennedy said.

Rainbow was notified that the transaction did not process.

“We corrected it the next day. It was just some sort of glitch,” Kennedy said. “It’s all electronic stuff. It’s not frequent, but it happens.”

If the payment is not received by the due date but within five business days after the due date the penalty for the late payment is 1%. That equated to $12,996.21 for Rainbow. The CWA notified Rainbow of the late payment charge Wednesday, March 17. Rainbow finance manager Tracy Largent sent CWA general manager Sandra Kerl a request for a waiver, March 18. CWA staff recommended that the waiver be approved.

Joe Naiman can be reached by email at [email protected].