MULTI-YEAR PLANNING FOR CUSTOMER AFFORDABILITY

Crystal Knight-Lee, Director, Customer Service

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About WSSC Water➢101-years old: NEVER had

a drinking water quality violation. . . EVER

➢Service area = 1,000 square mile area in Prince George’s County and Montgomery County, Maryland

➢Largest water utility in Maryland

➢1700+ #H2O People!

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Size and Scope

FY 2020 Annual Budget:

$1.5 Billion

➢$817M Operating

➢$638M Capital

Bi-County agency created by the state

Customer Accounts: 485,000

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The Water Sector & Affordability

A Framework 5

#ThisOneDrop – WATER POLICY IS.....

PUBLIC HEALTH POLICY

ENVIRONMENTAL POLICY

ECONOMIC POLICY

SOCIAL JUSTICE POLICY

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Sector Challenges: The “Triple A” Threat

Aging Infrastructure

Aging Workforce

Affordability

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WSSC AFFORDABILITY

PLANNING

Balancing fiscal and social responsibility 8

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“Does WSSC Have an

Affordability Problem?”

Customer Experience

Vision

Rate Structure Change

Stakeholder Input

Policy Priority

Why Did We Evaluate our Programs?

Affordability – Best Practices Model

Low-Income Bill

DiscountsFinancial Counseling Strong PartnershipsArrearage Forgiveness

Water Conservation

AssistanceFlexible Payment Plans

Crisis Intervention

Programs

Social Service

Referral

Plumbing Repair

Assistance

Flexible Billing

Options

Aggressive Outreach

& Marketing

Robust Community

Engagement

Source: Scott Rubin and Jay Sakai

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Step 1: Set Goals & Objectives

Step 2: Identify Target Population

Step 3: Evaluate Current State

Step 4: Conduct Gap Analysis

Step 5: Implement Roadmap

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Months

WSSC’s Affordability Program Review Process

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Step 1: Set Goals and Objectives

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Step 2: Identify the Target Population

Customer incomes are more skewed to the upper end of the income bracket

About 40,000 single-family households are below 175% of the federal poverty limit

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Step 2: Identify the Target Population

Households below poverty level are scattered throughout the service area

Households eligible for energy assistance throughout the service area

• Is the program designed to achieve measurable objective(s)?

• Is the level of assistance being provided sufficient for target population?

• Is program funding sufficient?• Is the program well utilized?• Are the eligibility requirements appropriate?• Is the program helping customers reduce

their water consumption?

Step 3: Evaluate Current Strategies

• How can we help low income customers become current?

• Are payment plans flexible enough?• Are we helping vulnerable customers

identify and fix leaks?• How well do we work with other agencies

to help families in crisis?• Are we building trust in the community

through partnerships? 15

Step 4: Gap Analysis

Best Practice Element Initial Affordabilty Gap

Low Income Bill Discount ➡ Current Fixed charge discount leaves some groups with unaffordable water bills

Water Conservation Assistance ➡ No services for low income customers

Flexible Billing Options ➡ Quarterly billing option only

Arrearage Management ➡ 50% leak adjustment, limited $300 Water Fund grants, no arrearage forgiveness

Flexible Payment Plans ➡ Limited length payment plans available

Crisis Intervention ➡ Limited Water Fund grants available

Financial Counseling ➡ No services for low income customers

Plumbing Repair Assistance ➡ Some State housing loan programs available

Social Service Referral ➡ No services for low income customers

Strong Partnerships ➡ Salvation Army, Office of Home Energy Programs

Aggressive Marketing & Outreach ➡ Programs primarily marketed through website

Robust Community Engagement ➡ Significant outreach to public during rate structure review, Bi-County workgroup

Support Processes ➡ Limited staffing and resources dedicated to affordability

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Step 5: Implement Roadmap

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People

Policy & Process

Improvements

Program Development

Partnership

Peoplewe’re trying to help and serve

Policies & Processes we need to develop or improve

Programswe need to enhance or develop

Partnershipswe need to develop or expand

Building a World Class Affordability Program

Best Practice Element Initial StateShort-Term

(July 1, 2019)

Mid-Term

(July 1, 2020)

Long-Term

(2-3 years)WSSC Strategies

Low Income Bill Discount ✔ ✔ ✔Expanded CAP Eligibility, Indirect Customers,

Increase Discounts

Water Conservation Assistance ✔ ✔Free Conservation Kits, In-Home Inspections,

Water Audits, Fixture replacement

Flexible Billing Options ✔Monthly Billing, Customized Billing, Budget

Billing

Arrearage Management ✔ ✔ Leakage Adjustment, Arrearage Forgiveness

Flexible Payment Plans ✔ ✔ Longer Term Payment Arrangements

Crisis Intervention ✔ ✔ Increase Water Fund, Increase Crisis Grants

Financial Counseling ✔ Wrap-around Customer Support

Plumbing Repair Assistance ✔ Pipe ER Loan Program

Social Service Referral ✔ Wrap-around Customer Support

Strong Partnerships ✔ ✔ ✔ ✔Strengthen existing partnership, Build New

Partnerships with regional NGO's

Aggressive Marketing & Outreach ✔ ✔ ✔ ✔ Enhanced Marketing & Communications

Robust Community Engagement ✔ ✔ ✔ ✔Fund Raising Events, Bi-County Rate-Payers,

Partnering withCounty Governments

Support Processes ✔ ✔ ✔Hired Customer Engagement Specialist, Billing

System Upgrade, AMI

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WSSCAFFORDABILITY IN

ACTION

WSSC Water’s Commitment

To Water Access for All 19

Recent WSSC Affordability Program Enhancements

➢Billing Assistance• Extended payment plans for low-income customers• 100% leak adjustment credit for low-income customers

➢Water Conservation Assistance• Free property inspections for low-income customers• Free conservation kits for low-income customers (pilot)

➢The Water Fund (Hardship Fund)• Increased amount of assistance for hardship from $300 to 500

➢Emergency Pipe Loan Program• Introduced new low-interest emergency pipe loan up to $5,000

Learn more: www.wsscwater.com/assistance

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Estimating Program Costs

Affordability

Program Option

1st Year

Projected

Costs

3rd Year

Projected

Costs

5th Year

Projected

Costs

Leakage Adjustment

Regulation Change $212,000 $212,000 $212,000

Water Fund Admin Fee $58,560 $30,000 $30,000

Water Conservation Pilot $21,000 $42,000 $62,000

Free Plumbing Inspection

$12,000 $15,000 $18,750

Extended Payment Plans No Cost No Cost No Cost

Total $303,560 $299,000 $322,750Assumptions:• FY2020 investment of up to additional $1M for affordability programming.• Projected costs for the Water Conservation Initiative assume an increase to 2000/units in year 3 and 3000 units in year 5.

• The Water Fund is funded by external donations. WSSC pays the Salvation Army a 10% administrative fee that is projected to increase to 12%. The amount of the fee will vary depending upon the Water Fund balance.

• No assumptions made for collections improvements.• Estimated revenue offset due to potential CAP program enrollment increases over 5-year period. 21

Customer Assistance Program (CAP)

➢Waives fixed-fees: up to $28/quarterly bill

➢Also includes Bay Restoration Fee Exemption of $15/quarter

➢Current enrollees: 12,000+

➢Program cost of $990,000+ for FY2019

➢Partnership with Maryland’s Office of Home Energy Programs to enroll customers

➢Eligibility at 175% of federal poverty level

➢Result of 2015 legislation

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The Water Fund ➢Founded in 1994 by WSSC

Water’s #H2O People (employees)

➢Total of $300/annually to eligible customers

➢Since inception, has awarded over $1.275 million to over 3,600 customers

➢Administered by The Salvation Army

➢“Round-Up” program

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Emergency Pipeline Loan Program

➢$5,000 low-interest loan to repair an emergency break on the lateral

➢Annual investment of $100,000

➢Administered by the WSSC Federal Credit Union

➢Effective July 1, 2019 (based on legislation from 2018)

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Key Takeway

All people need access to the basics—water, food, shelter….in order to

participate fully in society. When these basic conditions are met, our

communities and our economy thrive.– US Water Alliance

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Thank you!

Crystal Knight-Lee

Customer Service Director

Crystal.Knight-Lee@ wsscwater.com

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