New Tool Helps Communities Assess the Affordability of Services

When the five small water systems in Hampton County, South Carolina decided to band together to create the Lowcountry Regional Water System (LRWS), they, like many other small water systems across the country, faced a number of managerial and financial obstacles. Among these challenges were a flat growth rate, degraded and inadequate infrastructure, artificially low rates, and an economically disadvantaged population. Each of the five communities in this rural county charged vastly different amounts for their service, with monthly rates for 5,000 gallons of water and sewer ranging from as low as $36.50 to as high as $62.67. Whether the rates of the new, regionalized water system were “affordable” for all customers became a top concern for the LRWS. The Lowcountry Regional Water System is not alone. Increasingly, many communities are concerned about whether the services they offer their citizens are affordable, including water and wastewater service. One way to measure the affordability of a service, and the most common way for water and wastewater systems, is “Percent MHI”—that is, the percentage of the monthly or annual income the median household within a community would spend for a particular service. But there are known problems with using Percent MHI as the only indicator of affordability. It’s better to assess affordability using a range metrics, not just one, in order to get a more comprehensive view of affordability for different groups within a community. The Census Bureau’s American Community Survey offers other data that can help us have a more complete picture of affordability. In addition to reporting the MHI, the American Community Survey [...]