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Can You Keep Yourself in Ice Cubes? – Water and Sewer Affordability

In browsing the E-zines a few weeks ago, I ran across this headline: “U.S. Water Affordability Crisis on the Horizon?,” which was based on a research paper by Elizabeth Mack, an assistant geography professor at Michigan State University. In it she notes:

Water is a fundamental right for all humans. However, a growing number of people in the United States and globally face daily barriers to accessing clean, affordable water.

Can that happen in Washington State?  Water and sewer utility bills are increasing statewide as cities, counties, and water/sewer special purpose districts replace aging infrastructure, deal with the twin devils of droughts and floods, seek new or more stable water sources, increase utility resiliency and security, and comply with new rules and regulations.  Will there be many more Washington families and, potentially, whole communities that will need financial assistance in order to afford basic water and sewer bills?

The Cost of Water and Sewer

For grant and loan funding agencies, water/sewer affordability is measured by the annual cost of water and sewer bills as a percentage of median household income. Households paying an amount for water that exceeds an affordability threshold are considered to be paying a cost that is unaffordable and a “high burden.” A 2013 American Water Works Association (AWWA) publication, Assessing the Affordability of Federal Water Mandates, notes:

EPA’s stated view on potable water—that it is affordable if it costs less than 2.5% of small community median household income (MHI)—influences the perceived affordability of combined water and wastewater bills. Specifically, it is inferred that EPA would consider a combined annual water and wastewater bill of less than 4.5% of MHI to be affordable (2.5% for water, plus 2% for wastewater services and CSO controls).

The Departments of Health (DOH) and Ecology (DOE), which are the grant and loan funding agencies in Washington State, use 2% for both water and sewer instead of the EPA percentages. The Infrastructure Assistance Coordinating Council (IACC) website hosts a Summary of Some Grant and Loan Programs for Drinking Water and Wastewater Projects (Updated 10‐1‐16).

What is Affordable in Washington?

DOH and DOE rely on income data provided by the U.S. Census Bureau to determine affordable water and sewer rates for specific communities, as shown in Appendix L of the DOE’s Funding Guidelines for the Water Quality Financial Assistance program in Fiscal Year 2018. If an applicant disputes the Census Bureau data, the applicant may conduct an income survey of their community using the IACC Income Survey Guidelines.

David Dunn, PE, DOE Water Quality - Financial Management, notes that the DOE’s program for addressing sewer rate hardship (un-affordability) is shown in Table 2 on page 6 of the Funding Guidelines. The “Sewer Fee ÷ MHI“ is based on the cost of the project before grant and interest rate subsidy is applied.  He adds: “Every year there are a few sewer utilities applying for funding with an affordability index more than 5%.”

DOE's Hardship Interest Rates & Grant Continuum for FY18

Sewer Fee ÷ MHI <2% >2% but <3% >3% but <5% >5%
Hardship designation Non-hardship Moderate hardship Elevated hardship Severe hardship
20-year loan rates 1.5% 1.0% 0.5% 0.0%
Grant eligibility Not eligible 50% (up to $5M) 75% (up to $5M) 100% (up to $5M)

Are there communities where average household rates exceed the 2% affordability index? Using the last column (Monthly Sewer Fee Needed to be 2% of MHI) in Appendix L of DOE’s Funding Guidelines in conjunction with an online and very random search for water and sewer rate information for 20 cities, I created the two different comparison tables for water and sewer affordability.

Water Bill (WB) Comparison

Community County Monthly AWB Actual Water Bill
Morton Lewis 60 50
Omak Okanogan 51 31
Walla Walla Walla Walla 71 65
Waitsburg Walla Walla 74 34
Vader Lewis 75 ---
Washougal Clark 101 43
Kalama Cowlitz 79 30
Ephrata Grant 91 49
Snoqualmie King 217 64
Port Townsend Jefferson 72 38
North Bend King 123 68
Raymond Pacific 58 45
Aberdeen Grays Harbor 66 32
Lynden Whatcom 98 45
Granger Yakima 66 49
Yakima Yakima 67 18
Goldendale Klickitat 61 37
Colfax Whitman 76 30
Colville Stevens 57 34
Deer Park Spokane 52 28

Note 1: The Monthly 2% AWB in this table is from Appendix L of the DOE's Funding Guidelines SFY18 (DOH uses the same table for its funding programs).

Note 2: The Actual WB fees are my best estimate of water charges based on 7,000 gallons (or about 935 cubic feet) per month, excluding utility taxes.

Sewer Bill (SB) Comparison

Community County Monthly ASB Actual Sewer Bill
Morton Lewis 60 62
Omak Okanogan 51 77
Walla Walla Walla Walla 71 53
Waitsburg Walla Walla 74 43
Vader Lewis 75 68
Washougal Clark 101 55
Kalama Cowlitz 79 105
Ephrata Grant 91 38
Snoqualmie King 217 49
Port Townsend Jefferson 72 72
North Bend King 123 162
Raymond Pacific 58 119
Aberdeen Grays Harbor 66 37
Lynden Whatcom 98 47
Granger Yakima 66 49
Yakima Yakima 67 35
Goldendale Klickitat 61 32
Colfax Whitman 76 45
Colville Stevens 57 78
Deer Park Spokane 52 54

Note 1: The Monthly ASB in this table is from Appendix L of the DOE's Funding Guidelines SFY18.

Note 2: The Actual SB fees above are my best estimate of water/sewer charges based on 7,000 gallons (or about 935 cubic feet) per month, excluding utility taxes.

So, out of these 20 randomly selected cities, 8 have (as best as I can tell) monthly sewer rates that match or exceed the affordability guidelines. Washington, as a whole, seems to be “safe” on the water affordability side for now.

Within the most affluent communities, of course, there are individual households that definitely need assistance to pay their water and sewer bills. MRSC‘s Utility Discounts and Financial Assistance Programs discusses the legal authority for Washington local governments to offer assistance to low-income and/or senior customers, as well as those with disabilities, but notes that eligibility requirements for low-income and senior, low-income assistance programs are not defined by statutes. Thus, agencies are free to define eligibility requirements as they see fit.

MRSC is a private nonprofit organization serving local governments in Washington State. Eligible government agencies in Washington State may use our free, one-on-one Ask MRSC service to get answers to legal, policy, or financial questions.

Photo of John W. Carpita, PE

About John W. Carpita, PE

John was MRSC’s resource for many years on engineering design, purchasing and contracting issues, local improvement districts, and other infrastructure issues. He had a widely varied career as a consultant, county engineer, city engineer and project manager. He is now retired.