Targeted Relief or Political Credit? A Better Way to Help Residents After the Freeze

This discussion topic was requested by Council Member Courtney Johnston regarding Ordinance No. BL2026-1294, relative to a proposed Metro Water Services bill credit.

From CM Johnston:

When residents were told to drip their faucets during the recent freeze, many did exactly what they were asked to do. If that guidance led to higher water bills for some households, then relief should be targeted to those residents—not diluted into a universal credit for customers who never experienced the problem.

When 74% of customers didn’t see higher bills, an across-the-board credit isn’t relief—it’s a political gesture that weakens meaningful help for the people who actually need it.

Key Facts:

• 74% of customers did not see higher water usage during the freeze.

• Only 26% experienced increased usage, mostly small increases.

• An across-the-board credit gives relief to everyone, including customers who were not impacted.

• That approach dilutes meaningful relief for residents who actually saw higher bills.

• My substitute ordinance provides targeted relief funded by unused ARPA dollars, protecting the financial stability of Metro Water Services.

The Numbers Tell the Story:

Metro Water Services reviewed customer usage during the freeze and compared it to the same time last year.

Here’s what they found:

• 26% of customers saw increased usage

• 74% of customers saw no increase

For those who did see increases, most were relatively small:

• 1 CCF increase – 48% (1971 customers)

• 2 CCF increase – 21% (876 customers)

• 3 CCF increase – 12% (513 customers)

• 4 CCF increase – 7% (310 customers)

• 5 CCF increase – 5% (213 customers)

• 6 CCF increase – 4% (160 customers)

• 7 CCF increase – 2% (99 customers)

A total of 4143 customers were impacted. A VERY SMALL number.

For reference:

• 1 CCF equals about 748 gallons

• Each CCF costs roughly $12.76, increasing by tier.

Any increase above 7 CCF was excluded because usage at that level likely indicates a leak or burst pipe, which Metro Water Services already handles through existing bill adjustment policies.

So the bottom line is simple: 

Nearly three-quarters of customers did not experience the problem this policy is meant to solve.

Why the Across-the-Board Credit Doesn’t Work:

An across-the-board credit sends the same benefit to everyone:

• customers who saw higher bills

• customers whose bills never changed

That means the majority of the credit goes to people who were never affected.

And because the same pool of money is spread across the entire customer base, the residents who actually saw higher bills receive less meaningful relief. A $25.51 credit for water/sewer customers and a $10.07 credit for water only customers is NOT going to go very far for them.

The principle here is simple:

Relief should be targeted to the problem—not spread across people who never had one.

It Also Weakens the Utility’s Financial Model:

Our water system operates as an enterprise fund.

Customers pay for the service they use, and those revenues maintain the infrastructure that delivers that service.

Returning nearly $6,000,000 of system revenue broadly to customers who did not incur higher costs breaks that model.

It also reduces funds available for the things that keep the system running:

• infrastructure maintenance

• treatment operations

• pipes and pumps

• system upgrades

• debt service on capital projects

Policies like this may feel good in the moment, but they can create pressure for future rate increases.

A Better Option Is on the Table:

After reviewing the data and working with MWS, Finance, and Metro Legal, I filed a substitute ordinance that takes a far more responsible approach.

Instead of using restricted utility revenue for a universal credit, the substitute uses unused federal ARPA funds that must be spent before June 30.

Because those funds are not subject to the same utility restrictions, they allow us to provide targeted relief.

Under the substitute:

• $180,000 in unused ARPA Funds would go to the Metro Action Commission, which already administers assistance programs. This amount was calculated from data given by MWS on numbers of customers and how much they were impacted by CCF, with an added buffer. Yes - the number is quite a bit less than $6 Million, which is a statement in and of itself on the unnecessary nature of this across-the-board credit.

• Relief would go to customers who experienced increases greater than 1 CCF and up to 7 CCF.

• Customers with leaks or burst pipes would continue using the existing Metro Water adjustment process.

• The relief amount would equal the actual increase calculated by Metro Water Services.

This approach:

• helps the people who actually incurred higher bills

• protects Metro Water Services revenues

• uses federal funds that must be spent anyway

• preserves the financial integrity of the water system

The Bottom Line:

This issue isn’t about whether we should help residents who saw higher water bills. We absolutely should.

The real question is whether we do it in a way that actually helps them.

A universal credit spreads relief broadly to customers who didn’t incur higher costs while weakening the assistance available to those who did.

The targeted approach I have proposed directs relief where it is needed while protecting the financial stability of our water system and using federal funds that must be spent anyway.

I expect that the administration will have at least two people ready to raise procedural objections to this late filed substitute to prevent it from being discussed on the floor, which would unfortunately limit the Council’s opportunity to debate a targeted solution that both helps affected residents in a meaningful way and protects the financial stability of our water system.

If that occurs, I will ask colleagues to vote NO on the ordinance on third reading. Subsequently I will file this substitute as a new resolution that provides meaningful relief without compromising the long-term health of our water system to be heard the first meeting in April.

Metro Water Services does not ultimately answer to the Mayor on utility governance matters. The Council serves as the Water Board, and it is our responsibility to oversee the financial health of this system.

As the Water Board, our responsibility is not simply to approve the easiest political response in the moment, but to make decisions that provide meaningful relief while protecting the long-term stability of the system our residents depend on.

UPDATE:

In the absence of a NO vote, at the very least, this legislation should be deferred. I just learned today, despite having multiple meetings with MWS leadership over the past several weeks, that the data given and the calculations of the across-the-board credit were based on a sample size of roughly 7.55% of residential customers. Yes – 7.55%. Why? At the time this legislation was filed, that’s all that had been billed. So, 26% of that 7.55% (or 1.96%) saw an increase that looks like this:

• 1 CCF increase – 48% (1971 customers)

• 2 CCF increase – 21% (876 customers)

• 3 CCF increase – 12% (513 customers)

• 4 CCF increase – 7% (310 customers)

• 5 CCF increase – 5% (213 customers)

• 6 CCF increase – 4% (160 customers)

• 7 CCF increase – 2% (99 customers)

A total of 4143 residential customers in this sample size of 15,660 were impacted. A VERY SMALL number given that MWS has a total of 207,294 residential meters. Yet THIS is what this credit is based on which adds up to an almost $6,000,000 cost to MWS. This legislation is being rushed for no reason as MWS isn’t even prepared to give this credit logistically. I’ve asked for new numbers now that all customers should have been billed at this time but am told they cannot get this to me today as it’s a large amount of data.

I still believe the targeted relief is the best path forward to provide meaningful relief while protecting the financial health of MWS. An across-the-board credit is fiscally irresponsible.

PS – Keep in mind that both MAC and United Way both already have significant funds to help residents impacted by Winter Storm Fern and any effort by metro is complimentary and in addition to that support.