How water utilities can address the issue of water poverty when customer concerns are raised

This week, the website Vox posted a piece titled, "America has a water crisis no one is talking about."  It focuses on a recent Michigan State study that details the number of high-risk and at-risk households for water poverty or unaffordable water services based on the EPA's recommendation that water and wastewater services should not make up more than 4.5 percent of a household’s income. 

 

Article author Sarah Frostenson writes, "Access to clean water is a basic human right. Yet for 14 million US households, or 12 percent of homes, water bills are too expensive. And as the cost of water rises, even more Americans are at risk of not being able to pay their monthly water bill.

 

According to a paper from researchers at Michigan State University, water prices will have to increase by 41 percent in the next five years to cover the costs of replacing aging water infrastructure and adapting to climate change. That will mean that nearly 41 million households — or a staggering third of all US households — may not be able to afford water for drinking, bathing, and cooking by 2020.

 

There is no law that guarantees water access for poor Americans. And most financial assistance is left to the discretion of individual water utilities. So customers who have fallen behind in payments can have their water services abruptly shut off."  

 

Frostenson then details the situation that have drawn national attention in Detroit and Flint, Michigan, where turnoff efforts drew adverse attention.  The article about the study is actually a very responsible one; it talks at length about the reasons why the nation finds itself in such a situation.  It doesn't make a dramatic case that anything untoward is being done; there aren't any hints of greed or a desire to punish the poor.  

 

Instead, the piece simply lays out the fact that the bill has come due on our water and sewer infrastructure and it provides information about what water utilities are doing to help the poorer among us pay what they can for the services that are being provided and must be funded almost exclusively by rates and fees.

 

As detailed on the map showing counties with water poverty concerns, North Carolina has a more pronounced issue than other states.  Eastern North Carolina and counties along the border with South Carolina are especially at risk.  

 

What is clear from the article is that if water utilities continue to discuss their needs to deal with aging infrastructure in an open, honest and transparent way, such a communications effort greatly helps a utility address customer concerns about the issue of water poverty when it arises.  Income equality measures are obviously helpful but many water utilities are not allowed to offer them because of their governing statutes.

 

One key source of information that helps water utilities throughout North Carolina proactively explain their situation is the water rate survey data supplied by the UNC School of Government's Environmental Finance Center.  Every year, the Center conducts a survey of more than 400 water utilities across the state.  They crunch the numbers against the backdrop of their benchmarks for responsible water financial performance and produce a visual dashboard that clearly shows how well they feel a utility is doing when it comes to the affordability of their rates (and that's only one of several data points).  A person does not need a Finance degree to see how well water utility professionals are managing the money they pay.

 

When I first joined Cape Fear Public Utility Authority, the utility had been slammed for doing exactly what it stated it would need to do:  raise rates from their untenably low point to address repeatedly failing infrastructure.  At the same time, when CFPUA was formed in 2008 by the City of Wilmington and New Hanover County, its governing statutes eliminated the ability to offer income equality measures that had been offered before by the City of Wilmington.  

 

When I arrived, CFPUA's reputation was in tatters.  I immediately turned to the Center's tool to push back against unduly harsh criticism about our rates.  While it didn't completely turn off the criticism, I showcased the data at every turn; every person who came to us or the media angry about our rates has shown how a highly respected, independent, third-party supported how CFPUA was properly conducting its affairs.  After I combined the data with the cuts in sewer spills that was being achieved, the opposition weakened.

 

Before I left the organization last month, I provided CFPUA with the rate study data so it could use it as it announces today that it will seek a 2.2% rate increase for the next fiscal year.  Opposition from the public is not expected.  Why?  Because a proactive and completely transparent communications process, combined with the use of a powerful, third-party-provided tool, informed ratepayers to such a degree that their concerns were addressed for years.  

 

The roadmap I used, and WaterPIO now uses, can help any utility deal with difficult financial matters, like water poverty, as it grapples with aging infrastructure.

 

Mike McGill is the president of WaterPIO, a communications firm focused on helping water and wastewater professionals, and local government officials, improve their relationships with ratepayers.  You can email Mike at mike@WaterPIO.com or visit www.WaterPIO.com for more information.

 

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