Creative Opportunities for the Funding of Water Industry Customer Assistance Programs (CAPs)

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2 Creative Opportunities for the Funding of Water Industry Customer Assistance Programs (CAPs) Robert Chambers, Principal Black & Veatch Management Consulting, LLC

3 Presentation Outline Energy Industry Lessons Learned Funding of Existing Water Industry CAPs Creative Opportunities to Fund Water Industry CAPs Closing Thoughts 3

4 Energy Industry Lessons Learned 4

5 Energy Industry Lessons Learned 1 Development of a Dynamic Water Industry Customer Assistance Statutory Framework. 2 Establishment of a Dynamic Utility Level CAP Planning and Operations Framework. 3 Perform the appropriate due diligence to understand and appropriately define the Underlying Need within the Water Industry. 5

6 Energy Industry Lessons Learned Dynamic Water Industry Customer Assistance Statutory Framework Federal Programs 1 Energy Telecom Water 1. LIHEAP - $3.4 billion allocated in FY Weatherization Assistance Program - $213.8 million allocated in FY Clean Power Plan* *As of April 2017, the Supreme Court has note issued a ruling on the constitutionality of the Low. 1. Universal Service Fund - $7.8 billion allocated in FY 2016 i. High Cost Support ii. Low Income Support None Source: UNC Environmental Finance Center - Navigating Legal Pathways to Rate Funded Customer Assistance Programs 6

7 Energy Industry Lessons Learned Dynamic Water Industry Customer Assistance Statutory Framework Statutory Ability of States to Use Rate Revenue for CAPs 21 State Commission Regulated (IOUs) Commission Regulated (Municipals) Florida Yes No North Carolina Yes No California Yes No New York Yes No Pennsylvania Yes Yes Virginia Yes No Washington Yes No IOU (Utilize Rate Revenue) Georgia No No N/A Municipal (Utilize Rate Revenue) Key CAPS Prohibited CAPS Not Prohibited Laws May Prohibit Laws Do Not Prohibit Source: UNC Environmental Finance Center - Navigating Legal Pathways to Rate Funded Customer Assistance Programs 7

8 Energy Industry Lessons Learned CAP Planning and Operations Framework 2 8

9 Energy Industry Lessons Learned Perform the Appropriate Due Diligence to Understand the Underlying Need 3 EPA Review - Customer Assistance Programs Offered by U.S. Drinking Water and Wastewater Utilities Type of Drinking Water and Wastewater Utilities Reviewed Number of Utilities Reviewed Number of Utilities Found to have One or More Programs Total Number of Programs Identified during the Review Large Utilities (> 100,000 people) (30.6%) 308 (84.4%) Medium Utilities (10, ,000 people) (21.7%) 57 (15.6%) Source: EPA Drinking Water and Wastewater Utility Customer Assistance Programs, April

10 Energy Industry Lessons Learned Perform the Appropriate Due Diligence to Understand the Underlying Need 3 Military Type of Customers Assisted Lifeline Rate Type of CAPS Other/Unknown Water Efficiency Disabled Seniors Hardship Low Income Number of Customer Groups within the Surveyed Utilities Temporary Assistance Flexible Terms Bill Discount Number of Programs within the Surveyed Utilities Source: EPA Drinking Water and Wastewater Utility Customer Assistance Programs, April

11 Funding Existing Water Industry CAPs 11

12 Funding Existing Water Industry CAPs City of Atlanta, Georgia Relevant Features Funded through Rate Revenue Financial Assistance and Plumbing Repair Leak Vouchers Up to $3,000 Temporary Assistance Up to $1,000 Rate Oversight, Citizen, and Tax Payer Association Committees Eligibility: Income less that 200% of poverty index FOMB Highlights Georgia law provides broad Rate Setting Authority Georgia Constitution Gratuities Law highlights concerns Rate Setting Process and CAP is ratified by ordinance Program transitioned from Donations to Rate Revenue Funding MHI - $47,527 Source: UNC Environmental Finance Center - Navigating Legal Pathways to Rate Funded Customer Assistance Programs 12

13 Funding Existing Water Industry CAPs City of Portland Water Bureau, Oregon Relevant Features CAP program is rate revenue funded Potential bill discounts per quarter Water - $50.70 Wastewater and Stormwater - $91.34 Wastewater Only - $79.99 on a 60-day bill Eligibility: HHI at or below the State MHI Highlights No statutory law preventing the use of Rate Revenues to fund the CAP Rate Setting Process and CAP is ratified by ordinance Other Assistance: Debt forgiveness, crisis /emergency assistance, and financial assistance for repairs MHI - $55,003 Source: UNC Environmental Finance Center - Navigating Legal Pathways to Rate Funded Customer Assistance Programs 13

14 Funding Existing Water Industry CAPs Orange Water and Sewer Authority, North Carolina Relevant Features Funded through private contributions/donations Program is administered solely by the Inter-Faith Council (IFC) Customers Apply for support and IFC administers the support accordingly Highlights Public and private entity partnership North Carolina Law No Rate Revenues to fund CAP Contributions Monthly OWASA Bill Lump Sum Gift Honorary/memorial gift Source: 14

15 Funding Existing Water Industry CAPs City of Raleigh Public Utilities Department, North Carolina Relevant Features Funded from general Local Government Revenues Raleigh and Garner Each year the Cities contribute General Fund Revenues One-time Financial Assistance of $240 per year Eligibility: Income less than 130% of the Federal Poverty Level Highlights North Carolina Law No Rate Revenues to fund CAP Inter-governmental Cooperation Raleigh maintains services agreements with neighboring utilities Wake County Human Services Process Applications Third Party Entity Source: UNC Environmental Finance Center - Navigating Legal Pathways to Rate Funded Customer Assistance Programs 15

16 Funding Existing Water Industry CAPs Summary of CAPs Assistance Provided Bill Discounts Flexible Terms Emergency Assistance Assistance for Repairs Debt Forgiveness Conservation Education Lifeline Rates High Efficiency Fixtures Source of Funding Rate Revenues Private Donations Inter-government Cooperation Limited Public and Private Entity Partnership General City Revenues Others Sources Late Fees Utility Bill Contributions 16

17 Creative Opportunities to Fund CAPs 17

18 Creative Opportunities to Fund CAPs How do we build on existing funding resources and programs? 18

19 Creative Opportunities to Fund CAPs Enhanced Intra/Inter- Governmental Cooperation Pooled Public and Private Partnership Other Enterprise Fund CAP Income Sources 19

20 Creative Opportunities to Fund CAPs Enhanced Intra/Inter Governmental Cooperation Jurisdictional Cooperation Enhancement/Development of Services Agreements Shared CAP Funding Burden Funding based on the tenets of Service Agreements Coordinated Customer Outreach Pooled Public and Private Partnerships Multiple Public Jurisdictional Cooperation Multiple Private Entities to Fund, Implement, and Manage the CAP Targeted Sourcing of Funding Alignment of CAP Goals, Objectives, & Desired Outcomes Programmatic Community Development Effort Other Enterprise Fund Income Sources Identify or Develop Additional Enterprise Fund Sources of CAP Income Tax Revenue Ad/Signage Revenue Community Development Surcharge/Rider Facilities Rental Revenue Diversify CAP related Income Streams Sources must by ratified by the Municipal Government Ordinance 20

21 Closing Thoughts 21

22 Closing Thoughts Establish an Overarching Statutory Framework Funding, Implementation, and Maintenance of Water Industry CAPs Understand the Need The Affordability GAP Utilize a Programmatic Operating Framework to procure Funding and manage the CAP Maintain the CAP as a Business and not a Stand-Alone Service Identify opportunities for Municipal Government and Private Entity Cooperation Diversify CAP related Income Sources 22

23 Creative Opportunities for the Funding of Water Industry Customer Assistance Programs (CAPs) Robert Chambers, Principal Black & Veatch Management Consulting, LLC