Council talks customer assistance for water and wastewater

The Gunnison City Council discussed options for providing financial assistance to water and wastewater customers at its Oct. 27 regular meeting.

Mayor Diego Plata introduced the discussion, explaining that it arose from a council request during the council’s Oct. 8 discussion of water and wastewater rate increases to hear more about options to assist customers.

City Manager Amanda Wilson said that her focus for the discussion was to have the council discuss the issue and give staff direction on which approaches the council would like staff to pursue. She added that council was also presented with an extensive memo on the various customer assistance options.

Wilson outlined that Customer Assistance Programs (CAPs) are designed to help customers pay for essential services, such as water and sewer, that they are struggling to afford.

Wilson said the city’s water and wastewater operations are run like independent businesses, with rates set to ensure sufficient revenue to provide services and maintain the system.

She said that the cost offsets that CAPs provide must be paid for by someone, and that different funding options come with different pros and cons, which are partly shaped by state and federal regulations on what can be done with certain types of funding.

One option for funding CAPs is voluntary donations, Wilson said, which could be administered either by the city utility or by an outside organization.

Another option would be funding CAPs with city sales or property tax revenues, she said. She said this approach would likely require cutting other city programs, since the city's tax revenues are not currently sufficient to continue all current programs and provide offsets.

A final option would be funding CAPs with money raised from water and sewer rates, said Wilson. She said that one approach to doing this would be to offer rebates for things like customers replacing leaking pipes, since this would reduce a customer’s water bill and the overall system by reducing water loss and inflow and infiltration.

However, she said, providing rebates or rates that benefit one customer over another would be more problematic. Wilson said this could be possible but would require additional legal analysis and could be subject to changes in the rules due to future litigation on the issue.

Wilson outlined that the assistance CAPs provide can come in five basic forms, including one time help that helps customers after a crisis like job loss or illness, a monthly credit or annual rebate to reduce bills, a past-due balance credit that reduces old debt when a customer keeps up with a payment plan, free tools and advice to reduce water use, and repair or yard design help that assists with fixing leaks or designing water wise landscaping.

Plata said that he appreciated the thoroughness of the analysis of options. “We know there are going to be challenges to this,” he said. “It’s just great to know that there are options.”

Councilor Matt Schwartz said that offering free tools and advice stood out to him, which he felt were “low hanging fruit” and something the city should look at.

Councilor Audrey Zahradka said that she agreed and that this would be “a low-cost way for us also to support the people in our community.”

She said she was also “intrigued” by the concept of a voluntary donation pool as a way to assist customers and as a “low cost way to cost share.”

Councilor Loren Ahonen said he saw value in free tools and advice. Still, these might not address cost issues for many people, and he would like to see the city “at a minimum” examine options for a voluntary donation pool.

He said he was also interested in a tiered assistance plan that would lower rates for low-income customers and raise them for higher-income customers.

A voluntary donation pool is “unlikely to address the scope and scale of the substantial increases that may hit individual folks’ pocketbooks, but at least it’s a starting point, and to me it is a more aggressive and admirable starting point than merely offering people education and dye tablets,” Ahonen said.

He added that he would also be interested in exploring programs in partnership with Colorado State University Extension or other partners to assist with yard design and help residents reduce outdoor potable water use.

“Certainly, no one solution is going to solve the problem,” he said.

Mayor Pro Tem Marisela Ballesteros said that donation pools might be a way to find funds that are more flexible than many of the city’s funding options.

She added that free tools and advice could also be valuable for community building and for partnering with other individuals and organizations.

Ahonen said that natural gas utility Atmos provides showerheads to help reduce customers' natural gas usage by reducing the amount of water they have to heat, and that working with companies and groups already focused on water conservation could be valuable.

The council also discussed how the city could use programs such as AmeriCorps and various workforce development funding sources to staff initiatives that assist residents.

Plata said that he felt that pursuing CAP options would be valuable. However, he highlighted that “somebody’s going to have to pay” for the plant and infrastructure upgrades the city is undertaking.

He raised concerns about the city staff time and investment required to launch an assistance program. “I think there are many existing resources that we could potentially tap into that make it far easier for individuals to not only get something that has already been proven to work, but it reduces the cost to the city when it comes to implementing the program or potentially losing that revenue through staff time being put out to run this program,” he said. “I think there’s a really fine balance here that we need to strike as we have this conversation when it comes to who’s paying for this and how do we, again, leverage existing partnerships, resources, AmeriCorps, whatever that scenario is.”

Ahonen said he was having difficulty tracking the “opportunity cost” Plata highlighted.

Plata explained that any program the city implements would have costs to city departments to run them and that he wanted to avoid the city bearing that cost as much as possible.

Ahonen said that he did not see that there were sufficient existing programs to assist people.

Plata replied that he wanted to direct staff to explore potential options for such partnerships and to focus on what the city should take on and what could be done with outside partners.

He said he fully supported both customer education and the voluntary donation program and wanted to explore partnership options for those programs.

Ballesteros said the city might have to facilitate connections with outside organizations, and Plata agreed.

Ahonen said that, while using general fund dollars would introduce a variety of new considerations, one of the city’s missions is improving quality of life and that this includes “being able to pay your bills.”

He continued that if the city is building assets to support people they would struggle to pay for, this would negatively impact quality of life.

Ahonen said he may consider using general fund dollars for a CAP.

Plata said he would want to ramp up support through a CAP, beginning by offering more “low hanging fruit” and potentially moving to things like using general fund dollars if necessary later.

Ballesteros said she would like resources presented both in person and online to engage the community better.

She also thanked staff for the presentation and the ideas for implementing a CAP to reach people in need as well as for being “realistic” about the financial circumstances of Gunnison residents.

Zahradka said she would be interested to know whether there are CAP initiatives in towns similar in size to Gunnison and how they might be structured.

Wilson said that the American Water Works Association has done studies on this topic and that most municipalities of Gunnison’s size do not have similar CAP initiatives. However, Gunnison is also somewhat unique because it has fewer customers to spread costs among and fewer financial resources.

“I think it’s okay to set the standard and be a leader for jurisdictions of our size,” Wilson said, adding that Gunnison is also a leader in hosting events like Welcoming Week, which is held only by Aurora, Denver and Gunnison in Colorado.

Wilson concluded by thanking the council for the discussion and input on potential approaches for customer assistance moving forward.

“Thanks for a fruitful conversation,” said Plata.