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June 10, 2013
Changing the affordability criteria in water regs

The U.S. Conference of Mayors, the American Water Works Association (AWWA), and the Water Environment Federation (WEF) have jointly released an issue brief that proposes that the EPA reassess the manner in which it determines if communities can afford to implement water mandates in federal law.  Primarily, the brief recommends that the Agency revise its policy of using median household income (MHI) as an indicator of a community’s ability to pay for capital improvement and infrastructure renewal projects that can reach billions of dollars in some communities.

Under the Clean Water Act and Safe Drinking Water Act, the EPA requires that communities meet requirements for drinking water quality, treatment of wastewater, and control of stormwater runoff.  Recognizing the high cost of compliance with these requirements, the EPA may provide extended compliance timelines to communities that can demonstrate that they will experience financial hardship or will be forced to delay or cancel other critical projects.  For example, in assessing the affordability of a drinking water standard, the Agency says that the standard is unaffordable to small communities (those with populations under 10,000) if it results in a household drinking water bill in excess of 2.5 percent of the national MHI in such communities. 

No unaffordability finding

According to the issue brief, to date, the EPA has never determined that a drinking water regulation is unaffordable for small systems.  If the EPA were to make such a finding, it would be required to identify technologies for small systems that might not result in meeting a particular drinking water standard but that are found to protect public health. Then, on a case-by-case basis, states may approve the use of such affordable small system technologies (called a variance) or approve an extended deadline for compliance (called an exemption).

Little relation to poverty
According to the report, the MHI:

  • Is a poor indicator of economic distress and bears little relationship to poverty or other measures of economic need within a community;
  • Does not capture impacts across diverse populations;
  • Provides a snapshot that does not account for the historical and future trends of a community’s economic, demographic, and/or social conditions; and
  • Does not capture impacts to landlords and public housing agencies.

Alternative metrics

The issue brief offers several alternative metrics for better gauging the affordability of water mandates.  These include assessing the impact on customer water bills across entire income distributions and especially at the lower end; as a percentage of income for potentially vulnerable populations; across neighborhoods known to be economically at risk; and  through a variety of other indicators, such as the unemployment rate and the percentage of households receiving public assistance.

Assessment tool

In addition to the issue brief, the mayors and water organizations released a tool to help communities consider the many factors impacting affordability and fully understand the implications of the federal water mandates they face.  The tool includes worksheets that the organizations say will help communities accurately discern the burden of higher water bills on households at different income levels and with various demographic characteristics.

The issue brief and the assessment tool are available at the U.S. Conference of Mayors website.

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