If you find that there is a gap, that the rates needed to operate and maintain the system exceed the amount that most customers are able to pay, then you may want to consider a management model that includes partial subsidization of the water system. If you find that most customers are able to pay the required rates, but perhaps lower income customers or elders are not, you may want to consider an affordability program to assist those particular community members.
For anyon serious about gaining a deeper understanding of affordability programs, the Water Research Foundation offers a thorough resource on the topic: Best Practices in Customer Payment Assistance Programs.
Here are some examples of affordability programs you may wish to consider:
- Allowing customers to set up payment plans to pay down debt in increments over time.
- Connecting customers to public or private social assistance programs that help low income households pay utility bills.
- Offering reduced rates to elders, disabled or lowest income community members. This could be financed by:
- Slightly increasing rates for all other customers
- Subsidization from a variety of sources such as:
- Taxes at local store
- Profits from local industry such as tourism or fishing
- BINGO revenue
- Community general fund
- Debt forgiveness; offering a one time forgiveness of debt to customers experiencing extenuating circumstances.
Visit the Tohono O’odham Utility Authority’s website to view the outline of their Subsidy Program for assisting qualifying elders and low-income customers. Visit the Navajo Tribal Utility Authority’s website to read about their Customer Programs which include a 10% discount for senior citizens and customers with serious health conditions.