affordability,of,water,rates, au3lity’s,perspec3ve, · 2014-12-01 · aloha $60,297 $75.37...
TRANSCRIPT
Affordability of Water Rates A U3lity’s Perspec3ve
Paul L. Ma=hews Chief Financial Officer
Tuala3n Valley Water District
Presenta(on to Council of Infrastructure Finance Authori(es
Washington County, Oregon
2 2
Overview of the Presentation
• Defining “affordability”
• Brief insight into our customers • Legal authority to address
affordability issues
• Key policy decisions for addressing affordability issues
Washington County, Oregon
3 3
Three Concepts
Reducing the Pie
• Reductions in service levels
• Efficiency measures
• Economies of scale
• Long-term debt
• SDCs
Reallocating the Pie
• Low-income assistance
• Lifeline rates • Fund external
organizations like Care-to-Share
Serving the Pie Differently
• Increase billing frequency
• Encourage voluntary contributions to Care-to-Share
Washington County, Oregon
4 4
“Affordable” Bills Under Various Measures of Median Household Income
Is it really this simple?
Range of AffordabilityCommunity MHI 1.50% 2.00% 2.50%Beaverton $55,115 $68.89 $91.86 $114.82Aloha $60,297 $75.37 $100.50 $125.62Tigard $62,521 $78.15 $104.20 $130.25Hillsboro $64,197 $80.25 $107.00 $133.74Cedar Hills $68,793 $85.99 $114.66 $143.32Cedar Mill $106,429 $133.04 $177.38 $221.73Washington County $63,814 $79.77 $106.36 $132.95Median Household Income (MHI) based on US Census Quick Facts at hCp://quickfacts.census.gov/qfd/states/41/41067.html
Washington County, Oregon
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MHI Distribution Across Households
- A Tale of Two Communities
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
$5,000 $12,500 $20,000 $30,000 $42,500 $62,500 $87,500 $125,000 $175,000 $200,000or more
Distribution of Median Household Income
Beaverton Cedar Mill
Washington County, Oregon
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TVWD Serves a Diverse Community
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
Beaverton Aloha Tigard Hillsboro Cedar Hills Cedar Mill Washington County
Comparison of Households Receiving Food Stamps and MHI
MHI % with Food Stamps
Washington County, Oregon
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Legal Considerations for Reallocating the Pie
• Adoption of a discounted water rates is a policy decision for the Board
• No legal requirement to establish a discounted rate or assistance program
• Policy may consider economic and social objectives
• Policy should define who receive discounts
Discounted Water Rates and the Law
Washington County, Oregon
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Policy Considerations
• Low-income • Low-income senior citizens • All senior citizens • Disabled
Who Receives a Discount
Washington County, Oregon
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Policy Considerations
• Other residential customers • Business customers • Both residential and business
customers
Who Pays for the Discount
Washington County, Oregon
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Policy Decision 1: Overall Policy on Low-Income
Assistance
Low-income assistance is typically addressed in three different ways
Don’t address the issue at all
Direct customers to low-income or assistance programs (Care-to-Share)
Create a program within the District’s rate structure to address low-income issue
Washington County, Oregon
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Policy Decision 2: Nature of the Assistance
• All residential customers have the same rate schedule, but the first block of consumption is for “essential needs” and priced below cost
• Advantage: Administrative easy. All customers qualify
• Disadvantage: May not really help target customers
Lifeline Rate
• Establish a separate rate schedule for targeted customers
• Advantage: Targets and benefits the specific customers
• Disadvantage: Administratively difficult. Need to qualify customers
Low-Income
Rate Schedule
Washington County, Oregon
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Policy Decision 3: Determining Eligibility
• Percentage of the MHI that the U.S. Department of Housing and Urban Development estimates
• Percentage of U.S. Department of Health and Human Services Poverty Guidelines
• Other standard that the Board determines (e.g., customer qualifies for another low-income program like SNAP, Oregon Health Plan)
Methods to Determine Eligibility
Washington County, Oregon
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Policy Decision 4: Level of Discount
• Water • Sanitary sewer • Stormwater
Which Bills Receive Discount
• Fixed charge • Volume charges • Minimum or maximum discount • One or more blocks
• Consideration: Is it important to maintain an incentive for efficient use?
What’s the Level of the Discount?
Washington County, Oregon
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Policy Decision 5: Revenue Recovery to Support
Program
• Other residential customers only • All utility customers (residential and non-residential)
Where to Recover Lost Revenue
Washington County, Oregon
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Closing Thoughts
• Diversity in customers makes affordability programs difficult to focus
• Legal requirements can vary by state and local charters
• Affordability program may increase in importance as you pass through major investment cycles
• Generally a policy question—not a technical question
• Recommend programs be sustainable from both an operational and funding perspective.
Contact Info
Paul Matthews Chief Financial Officer
Tualatin Valley Water District
1850 SW 170th Ave
Beaverton, OR 97003
Thank You!
Washington County, Oregon
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Defining Disabled
• Individuals qualifying for special parking privileges
• Proof of disability from the Social Security Administration
• Others
Disabled May be Defined By:
Washington County, Oregon
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Affordability Policy Considerations
Washington County, Oregon
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Defining a Lifeline Rate Structure
$/CCF
3rd Block Peak-‐Use Rate: Priced Above Average Cost
2nd Block Basic Use: Priced Near Average Cost
1st Block -‐-‐ Lifeline Block Essential Needs: Priced Below Average Cost
Usage in CCF
Washington County, Oregon
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Determining Essential Needs
Liters Gallons Gallons LitersPer Person Per Person Per Person Per PersonPer Day Per Day Per Month Per Day
Drinking Water 5 1.32 40 2 to 5 0.53 to 1.32 16 to 40Sanitation Services 20 5.28 158 0 to over 75 0.00 to over 19.81 0 to over 594Bathing 15 3.96 119 5 to 70 1.32 to 18.49 40 to 555Cooking and Kitchen 10 2.64 79 10 to 50 2.64 to 13.21 79 to 396
Total 50 13.2 396 4.49 52.83 135 1,585
Monthly -‐ Gallons Assuming Family of 3 1,188 404 4,755
Source: Adapted from: Basic Water Requirements for Human Activities: Meeting Basic Needs, Peter Gleick, Pacific Institute for Studies in Development, Environment and Security
GallonsPer Person Per Month
Recommeded RangeRecommeded Minimum
Per Person Per DayGallons
Washington County, Oregon
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Example “Lifeline” Water Rate Design
1For presenta(on purposes only. Actual numbers would require detailed analysis.
RatesBill Component Existing Example1
Consumption per Month0 to 3 CCF $2.014 to 14 CCF $2.74 $2.7614 CCF and Above $3.91 $3.94
Fixed (5/8-‐inch Meter) $8.43 $8.43
Washington County, Oregon
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What to Discount
First block
All blocks
Fixed charge
Fixed and block 1 (Combines 1 and 3)
Fixed and all blocks (Combines 2 and 3)
Washington County, Oregon
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Review of Eligibility Methods
• Verify income tax records or other documents • Use taxing agency records (e.g., State) • Require customer affidavit verifying qualifications with penalty
for perjury • Require presentation of Electronic Benefit Transfer (EBT) card
or other evidence of selected low-income program enrollment • Others?
Income Verification
• Verify qualification for special parking privileges • Require written proof from the Social Security Administration • Others?
Disability Verification
Washington County, Oregon
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Who Verifies Eligibility
TVWD
Outside agency
• Customer service representatives
• Require hardening of IT systems if personal information is maintained
• Outside agency is responsible for verifying and qualifying customers
• Outside agency is paid by TVWD to provide service
• Typically an agency that works extensively with the target group of customers