While local governments throughout the country grapple with maintaining aging water and wastewater infrastructure while trying to keep rates affordable for all, Philadelphia has a new plan: set water rates based on income.
The City of Philadelphia launches its first-of-its-kind program this week, reports Governing. From that coverage:
In Philadelphia, more than 40 percent of the city’s water utility customers are delinquent in paying their water bills, amounting to about $242 million in uncollected revenue, according to the Philadelphia Water Department.
The city’s solution? Charge residents based on how much money they make.
“It’s never our goal to shut off water,” says Michelle Bethel, the city’s deputy revenue commissioner. “By having an affordable bill, it will allow all of our customers [to] pay.”
The utility will charge lower water rates for households with incomes at or below 150 percent of the federal poverty line (which is roughly $3,075 a month for a family of four). Participating households will pay between 2 percent and 4 percent of their monthly income, which could mean bills as low as $12 a month. Last year, the average Philadelphia resident paid about $71 a month in combined water, sewer and stormwater charges. The city estimates that as many as 60,000 households are eligible for the income-based program. …
Beyond the adjusted water rates, Philadelphia will offer a few other benefits to attract applicants. The city is waiving past-due amounts for customers who enter the program. If participating households stay current on water bills for two years, they can get any additional financial penalties waived as well.
The program is the result of legislation that the Philadelphia City Council approved in 2015. Councilwoman Maria Quiñones-Sánchez, who authored the bill establishing it, says she became interested in the affordability of water rates while looking for ways to stem foreclosures and address the rising cost of living in her district.
Read the full article here.