A Chicago Alderman Introduced A Water Affordability Ordinance. Does Baltimore

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Baltimore can get more revenue for new water infrastructure by charging what residents can afford to pay, says Mary Grant of Food and Water Watch

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Story Transcript

DHARNA NOOR: Welcome to The Real News Network. I’m Dharna Noor, joining you from Baltimore. Water is a basic human need. It’s easy for many of us to take it for granted, but in cities across the country, it’s becoming increasingly unaffordable for many people. In light of this, Chicago Alderman Carlos Ramirez Rosa introduced a bill calling for water affordability in his city. The ordinance aims to reduce water and sewer bills for low-income Chicagoans. It also aims to shield Chicago’s water and sewer system from privatization by requiring a super-majority approval from voters for any privatization deal.

While by next summer here in Baltimore, the price of water will have doubled in the past eight years. According to an Abel Foundation report, here in Baltimore, over 10,000 homes were in jeopardy of losing water as of May 2016 due to unpaid bills, and currently as many as 4900 Baltimore families don’t have access to running water. Does our city also need a water affordability ordinance? Here to discuss all of this is Mary Grant. Mary is the Public Water for All campaign director at Food and Water Watch, a national non-profit organization that champions healthy food and clean water for all. Thanks for joining us today, Mary.

MARY GRANT: Thank you for having me.

DHARNA NOOR: So, let’s start with Chicago. What’s your reaction to this new ordinance passed by Alderman Rosa? Water bills are going up in Chicago, as we mentioned. This proposal came after the city also instated a new utility tax. How could this bill change or offset the increasing price of water?

MARY GRANT: Well this bill is actually really ground-breaking. It’s based on a bill that was done in Philadelphia but it goes even further than that. It actually caps water bills at a level that each and every household can afford to pay. This is a percentage of income water affordability program. It’s commonly done in the gas and electricity sectors, but Philadelphia was the first city in the country to do it for water.

Now, Chicago is moving towards doing it for water. This is, as water prices continue to increase to levels that are unaffordable, this is ultimately where I think more water utilities will need to get to, in order to make sure that each and every household can afford to pay for water service.

DHARNA NOOR: Can you talk more about that cap? What is the cap? Who’s going to be most impacted by this new legislation?

MARY GRANT: It’s for people who live in poverty. At 200 percent of federal poverty level and below, can qualify for this program. It caps it at 3 percent of a household’s income, but it’s a tiered system, just like Philadelphia. So if you’re living at 50 percent or less of the federal poverty level, your cap will be at 0 percent. Your affordability would be 0 percent. The understanding is that if you’re a household of three, living on $10,000 a year, that you shouldn’t pay for water service when you can redistribute those costs elsewhere.

For a household living at 100 percent of the federal poverty level, for households living in poverty, the cap would be 2 percent of the household’s income. Then, for households living from 100-200 percent of the federal poverty level, the cap would be 3 percent of the household’s income.

DHARNA NOOR: So I do want to come back to ask you about Philadelphia, but before we do that, the Chicago Sun Times said that the ordinance was, “sent to the Rules Committee, the traditional burial ground for legislation opposed by the mayor’s office.” Is there any chance that this bill in Chicago could actually pass?

MARY GRANT: Well, we’re working to get it out of that committee. We think that it was assigned to the wrong committee, that it should have been sent to the Finance Committee. We’re working to get it shifted over. We’re working with the Alderman to get it shifted over to the correct committee. I think that if it does actually move out of committee, there’s a good chance it would pass. I mean, Chicago is not in as dire a situation as cities like Baltimore or Detroit, but I think, as many cities are, there’s widening income inequality, wealth inequality, and so even though the median income might not be that low, there’s a lot of people who are living in poverty and who are really struggling to pay their bills. This is a safety net for water services, recognizing that water is a public service, should be held in public hands, but it also should be available for everyone.

DHARNA NOOR: Right. Yeah. Absolutely. There are cities across the nation who are facing similar problems. Nationally, who is most impacted by the increasing price of water?

MARY GRANT: Well, we did a survey back in 2015. We actually found that Flint had the highest rates in the country, among the 500 largest water systems. So Flint, the city with toxic water was actually paying the highest rates. There was a new census report that came out that showed that Flint was also the poorest city in the country now. I think Flint is a place that needs federal support to make sure that its water is safe and affordable for all. It needs an inter-emergency management, local control over decision-making.

There was, earlier this summer we heard about how there are homes being sent to tax sales over unpaid water bills in Flint where water is still unsafe to drink. The issue of tax sales is an issue in Baltimore we hear about a lot. It’s done in Detroit as well, and Detroit also has massive water affordability problems. This idea of percentage of income billing for water actually originated in Detroit, more than a decade ago. Groups with the people’s water board in Detroit, so this is a Michigan Welfare Rights organization. We The People of Detroit, a lot of grassroots groups in Detroit came together, working with a consultant named Roger Colton to look at the situation in Detroit and they proposed this model of income-based water billing for the city of Detroit. The city council passed it, but it was never implemented because the city didn’t have control.

Detroit’s water system is managed by a board and so the city council has limited control over it, but there’s still groups working there now to try to get this percentage of income water affordability program established in Detroit because still today, we just heard a news report that one in ten households in Detroit lost water service this year over unpaid bills. The city’s water director called it a huge success because it’s a decline from previous years. They had been having higher rates of shutoffs, but you can’t call one in ten people without water services a success. There’s real solutions that need to be made in the city, and it’s possible to make it so that water service is affordable for each and every household, and that’s percentage of income billing program like Philadelphia has implemented.

DHARNA NOOR: Roger Colton actually, who you mentioned has worked on a similar bill for Baltimore. Here in Baltimore, a spokesperson for City Council President Jack Young told the publication Circle of Blue that council here is developing water affordability legislation, to be introduced next year in 2018. What do you hope to see in that bill?

MARY GRANT: Well we hope to see percentage of income billing, capping water bills at a level that households can afford to pay. We hope to see a robust legislation from the council. We’ve heard that it might include something to address water billing problems. That’s a widespread issue, not just affecting low income households, but churches are affected by water billing problems. The stadiums were affected by water billing problems. I think there’s larger issues in Baltimore too, so I think what I’m hearing is the City Council President and Council member Bill Henry are working on a really comprehensive piece of legislation to address our water needs. We were hoping it would be done this year, but we’re excited to see that it’s coming early next year.

DHARNA NOOR: Earlier this year, Baltimore actually hiked its water bill cost by an average of 9.5 percent. In 2019 the price is actually going to go up again at the same rate. The Department of Public Works said that those additional funds would go to developing better physical infrastructure for water and a more efficient billing system. They noted that they especially needed the money because they were getting less funding from the federal government. I should mention here that since then Baltimore has actually applied for a $200 million loan from the EPA to repair infrastructure, but they say that they have spent $900 million in the last 15 years on sewer repairs. Does the city need to hike water bills so that they can afford to better infrastructure?

MARY GRANT: I think we are going to need to raise our water bills in order to make these improvements. We can’t avoid making these improvements. Roger Colton did an analysis with Baltimore and he talks about the conundrum we’re facing, the need to make these improvements and to pay for these improvements is coming up against household’s ability to pay for the improvements, so the city is actually spending more and more money each year on collection practices that are actually yielding less and less revenue.

It’s, by not having an affordability program, it’s actually fiscally irresponsible of the city not to address the affordability problem, because they’re going to keep having to use these really expensive collection methods, these punitive collection methods like shutting off water service, sending homes to tax sale. These methods of collecting on households that are just punishing them for being poor. It’s not really where we need to go for a real solution for the city or for households. Making an affordability program, implementing an affordability program will have widespread benefits for the city, not in terms of just equity and justice, public health, but also in terms of fiscal responsibility. It’s the fiscally responsible thing to do as well.

DHARNA NOOR: By upping water bills for people who are actually more well off, you’ll be generating more revenue? Because I think many people in Baltimore would hear that water prices are going down for many people and say, “But we need like a new sewage system.” The sewage system is over 100 years old. Lots of the pipes still have lead in them, and we know how dangerous that can be. There was just a water main break in the middle of the city that’s going to cost money to repair. Does this actually draw in more revenue?

MARY GRANT: Well it draws in more revenue because it’s collecting more. When people can actually afford to pay their bills, they pay their bills. It’s pretty common sense, so what they’ve found is that, looking at the gas and electricity sector, Roger Colton’s analyzed it and he’s found that when you make water, utility services affordable, people pay a higher percentage of their bills. A utility is actually collecting more revenue from these low income households by making the bills affordable, because again when people can afford to pay their bills, they’re more likely to pay their bills.

DHARNA NOOR: Again, Roger Colton, he actually wrote a water affordability program for Baltimore. He worked on the one that’s implemented in Philadelphia. He’s actually going to be presenting the one for Baltimore here at The Real News headquarters in January. Could you just talk a little bit about how the income-based water billing system has impacted the city of Philadelphia, to give us a little bit of a preview of what he’ll be speaking about here next month?

MARY GRANT: Yeah. So Philadelphia just implemented it in July of this year. There’s no data yet about their collections, but we do know that they already have, as of October, they have 4000 households enrolled, which just to put that in perspective, that’s more than the city of Baltimore in its existing low-income credit program and in senior-citizen discount programs. This is a really robust program and a lot of people are getting enrolled right now.

There have been some delays I’ve heard with the enrollment process. Philadelphia has done a really good job of revamping their website to try to facilitate it. They have bar-coded applications, so they really are aggressively trying to get people enrolled into this program now. It’s only been a couple months, but we’re hoping that it will dramatically reduce water shutoffs, and reduce the amount for the city of uncollected bills. Before Philadelphia implemented its program, 40 percent of households were behind on their water bills. I think that by making water service more affordable, you’ll actually see that the city’s going to be collecting more revenue for its water system.

DHARNA NOOR: All right, Mary Grant. Thank you again for joining us. Again, Mary is the Public Water for All campaign director at Food and Water Watch. Thank you so much for joining us today. I hope to talk to you soon.

MARY GRANT: Thank you for having me.

DHARNA NOOR: And thank you for joining us on The Real News Network.