Affordability Update Presentation_Final V2 5.9.24 — File 24-0674

City of Somerville Ratepayer Assistance Program – Project Update May 9, 2024 1

Agenda 2 1. Reasons for Project 2. Project Overview 3. Communications & Outreach 4. Preliminary Findings 5. Potential Solutions 6. Next Steps

Reasons for the Affordability Study Concern and confusion over bills, rate increases Rate increases due to increased regulation, aging infrastructure, and MWRA Allocation Somerville resident feedback: they are “struggling with increasing water/sewer bills” 3

Bottom Line Up Front: A standard assistance program may not be right for Somerville, but we have several other recommendations that will enhance equity in billing and help with affordability 4

Study Overview 5 Evaluate current situation • Income, bills, use patterns, household size, customer types • Current programs & communications Obtain feedback & input • Hear public perspective on water/sewer system and bill affordability • Evaluate awareness of existing programs Consider various assistance programs • Examine pros and cons • Consider suitability of Somerville for various program types Design, implement program • Develop effective methodology • Finalize parameters • Provide implementation support Step 1 Step 2 Step 3 Step 4 Where We Are

Step 2: Obtain Feedback & Input 6 • City Council • Constituent Services • Council on Aging • Tenants (Residential and Business) and Property Managers • Office of Sustainability and Environment • OSPCD – Housing Division, Office of Housing Stability, Economic Development • And more.... Multi-Family Residents Residents working multiple jobs to meet financial obligations Recent immigrants and non- native English speakers Low-Income Constituents

Step 2: What we learned • Concern about increased rates is conflated with the meter change-out issue • This issue mostly impacts residential property owners; concern that relief to landlords may not be passed on to tenants • Staff and community advocates offer other assistance programs (housing, energy) to free up money to pay the water bill • Little to no awareness of available assistance programs (LIHWAP and elderly/persons with disabilities) • There is significant interest and support for providing assistance • Billing every four months may exacerbate the issue • Communication is critically important—ensuring that constituents can access information in a way and language they prefer 7

Other Existing Assistance Programs • Rental/Utility Assistance – Programs administered by CAAS, SHC, Just-A- Start and EOHLC – can pay arrears and up to six months prospective in appropriate cases • CARES Fund – Up to $2,000 for non-housing expenses administered through CAAS • Taxi Voucher Program – Transportation for groceries, medical, housing search • LIHEAP fuel assistance – Benefits vary but generally up to $1,950 for winter fueling costs – app close May 10, 2024 but cycle each year • Assessing Exemptions – 41C and 17D State exemptions for low-income seniors – 25% discount on water bills 8

Step 3: Key Findings of Study What the City asked for: • Income-based eligibility for ratepayers • Bill discounts • Ease of administration • Ensure equity for tenants • Required revenue will be raised by non-eligible ratepayers What research determined: • MA DOR rules say that the City cannot charge one group of customers more in order to charge another group of customers less • 80% of properties are multifamily and include tenants with no direct relationship with utility, so standard CAP not viable • Current unit prices already higher for tenants than homeowners 9

Step 3: Recommended path forward 10 1. Make equitable rate structure changes 2. Diversify revenue sources 3. Formulate new policies and practices 4. Enhance communication

Recommendation 1: Make Equitable Rate Structure Changes 11 Tier Water Sewer 0-8 Ccf $5.53 $11.26 >8-13 Ccf $6.17 $12.52 >13-67 Ccf $8.88 $15.97 >67-133 Ccf $9.30 $16.75 >133 Ccf $9.67 $17.34 Existing Rates • Ensure ALL residents are billed equitably • Differentiate rate structure based on property type • Adjust tier cutoffs and pricing to align with usage characteristics of property type • Modify fixed charges to enhance equity and align with industry best practices *Ccf = One Hundred Cubic Feet = 748 gallons

Recommendations 2, 3, & 4: Potential solutions to promote equity and address affordability concerns • Fire protection fee • Separate stormwater fee • Miscellaneous fee adjustments Potential new revenue streams • Monthly billing • Partial payments • Grants for water efficiency investments • Formal written communications plan Potential policy changes 12

Step 4: Design & Implement 13 Finalize recommended classes, tier cutoffs, and tier differentials Calculate and finalize new revenue sources and policies Thorough review of billing system compatibility with new structure Ensure bill integrity when implemented Communicate changes to residents Goal for Go-Live: January 1st, 2025

Contact: Dave Fox, Vice President Email: [email removed] 14 Thank you!