DPW plans another water rate hike; Council president to introduce income-based billing legislation

Baltimore city plans to continue hiking its water and sewer rates for the next three years, while also raising the so-called “rain tax,” in a first, to help pay for ongoing water infrastructure repairs.

According to an announcement today–which precedes a forthcoming unveiling of a bill from Council President Bernard C. “Jack” Young to introduce income-based water billing system–the three-year hike would raise Baltimoreans’ water rates by 9.9 percent annually through June 2022, and their sewer rates by 9 percent each year. The stormwater remediation fee (dubbed by some as the “rain tax”), which has gone unchanged in Baltimore City since its introduction in 2013, would also increase by 9 percent annually.

The increases would would piggyback off of an ongoing 33 percent rate increase from 2016 through next June. Baltimore City Department of Public Works spokesman Jeffrey Raymond said the agency plans to submit its proposed rate hikes to the Board of Estimates when it meets on Jan. 9, 2019.

Mary Grant, the director of the water-rights advocacy group Food and Water Watch’s Water for All campaign, said DPW’s announcement caught advocates by surprise, as Young is planning to unveil a comprehensive bill to help low-income customers, dubbed the Water Accountability and Equity Act, early next week. Advocates were aware of the planned rate hikes, she said, but not that DPW would announce them this week.

Asked about the timing of DPW’s announcement, Raymond said it was made “after making sure the plan was fully vetted by our fiscal staff, financial consultants, and the City’s auditor. We’re not in a position to comment on other plans, but President Young is a strong advocate for affordability and we will continue to work with him.”

Grant said it appears the agency is unveiling the rate increases in response to Young’s bill.

She noted that the council president’s income-based billing proposal and DPW’s rate hikes could “definitely” be put in place at the same time. “We all recognize that water bills are not affordable.”

Baltimore Fishbowl has reached out to Young’s office for comment. According to Grant, the bill would create a “real affordability program capping water bills at a level each household can afford to pay based on their income,” similar to what Philadelphia implemented in 2017.

A legislative analysis prepared by the council president’s office says the program would be available to households at or below 200 percent of the federal poverty level. As an example, it says a household of four with an annual income of $25,000 and water bills totaling $860 annually (the average for 2018) would receive $110 off their bills over the course of a year.

The legislation would also create an “Office of the Water Customer Advocate,” a new city office dedicated to resolving billing disputes between customers and DPW, Grant said. Under that process, a customer advocate would work with the person disputing a bill and write a report to make their case. They would also have the option to appeal a subsequent decision by DPW and, if that proves unsuccessful, to bring their case to court.

“We have a lot of concerns about people going to DPW and not getting any resolution for billing problems,” including if the agency insists someone has a leak the resident cannot locate, Grant said. The new system would “provide the full due process under the law that you typically have under these issues. Baltimore has never provided a clear legal pathway before.”

She said the new office would be accountable to an oversight committee manned by Young, three other city council members, DPW’s director, a city auditor and the inspector general.

Water rights advocates have condemned the city’s continuous rate hikes for water and sewer service. A report from last year by an economist, commissioned by Food and Water Watch Maryland, said the increases have created a spiral-like dilemma in which customers who were already struggling to pay their bills are further challenged, leading them to fall behind, which then reduces the amount of revenue the city can collect and forces officials to keep increasing rates.

The economist, Roger Colton, proposed Baltimore try out Philly’s solution to use income-based billing, which would allow the city to collect more, if not all, of its utility revenues.

But officials have defended the rate increases as a crucial way to help pay for billions in repairs for Baltimore’s network of pipes. The city is under a federal consent decree with the U.S. Environmental Protection Agency, which was extended in 2017, to overhaul water and sewer infrastructure and bring it into the 21st century.

A large chunk of those repairs includes the $430 million Headworks project to replace hydraulic pumps and waste storage tanks at the Back River Wastewater Treatment Plant in Essex, which officials say will eliminate a foul, miles-long sewage backup that contributes to regular sewage overflows when it rains. Crews have also replaced, repaired, re-lined or cleaned hundreds of miles of water and sewer mains, DPW said.

DPW offered some consolation to customers about the more far-flung future in a release today, saying its proposed 30-percent increase could be the climax of rate hikes. “DPW anticipates that as early as fiscal year 2023 rate increases may begin to slow as the crucial multi-billion dollar construction program over the last few years begins to catch up with the backlog of aging infrastructure,” a release said. “As soon as fiscal year 2027 the rates should reach a steady state, with increases closer to the rate of inflation.”

Granted pointed out that “this does not mean that your bills will be reduced going forward. Your bills would continue to be increased for the future, and likely indefinitely… it’s just that how high of an increase would be reduced.”

To go with the 2019-2022 increases, DPW is also rolling out another assistance program to help low-income customers, defined as those with a household income at or below 175 percent of the federal poverty level, or $36,365 for a three-person household in 2019. The new offering, called Baltimore H2O Assists, would cut their water and sewer rates by 43 percent while removing Bay Restoration and stormwater remediation fees from their bill. The agency said that would amount to reduce a typical bill of about $100 for a three-person household to just over $61.

“I am committed to protecting our residents and communities, creating a healthy City, and stabilizing water rates,” said DPW Director Rudy Chow in a statement. “This proposal helps get us there.”

The city has other water billing assistance programs in place, including help for low-income customers, payment plans, discounts for seniors with household incomes of $31,500 or less and a hardship exemption from remediation and restoration fees.

DPW has not responded to an inquiry asking how Baltimore H2O Assists would differ from the existing low-income aid program.

The agency has planned a series of town halls with customers about the round of proposed rate increases and its new assistance program. Those are set for Dec. 11, 6-8 p.m. at Gospel Tabernacle Baptist Church in Walbrook, Dec. 12, 6-8 p.m. at the National Federation of the Blind in Riverside and Dec. 15, from 9 a.m. to noon, at the New Waverly United Methodist Church. Other dates will be announced soon.

DPW also plans to announce its proposed changes at a press conference Friday morning.

Young and water-rights and legal advocates plan to announce his legislation at their own press conference at City Hall on Monday afternoon.

This story has been updated.