Water Affordability Amidst a Stark Racial Wealth Divide

Screen capture of presentation from South Bend's Eric Horvath, with a photo of Eric in the top right corner, an image of South Bend in the middle, and information about South Bend demographics on the left side

To address expensive and necessary infrastructure improvements, what can cities—especially small and medium-sized cities—do to ensure that water stays affordable for those that need it the most?

With our partners at the Water Center at Penn, we are shining a critical spotlight on the local leaders who are overcoming these obstacles. Joining us at our first-ever Community of Practice in December were South Bend, IN utility leaders, Eric Horvath and Kara Boyles. They shared how they’re addressing equity through water customer assistance, with learning lessons for other cities of all sizes. Below are the main takeaways that can help your city make and keep water affordable.

Are you a mayor new to this issue? Start here with Setting the Agenda: A Mayor’s Guide to Water Affordability.

Three takeaways from South Bend, IN

1. Focus on efficiency.

Innovative technologies optimize current infrastructure and curb the need to raise rates.

To optimize efficiency and address combined sewer overflow issues, South Bend partnered with EmNet to establish a ‘smart sewer technology’. So far, this new technology has reduced sewer overflows by 54%, and is expected to reduce their Long Term Control Plan budget by $120 million. Find more details about their system here.

South Bend made major investments in wastewater technology as an early adopter of the innovative ‘smart sewer’ approach. In 2008, the City installed 150 depth and flow meters in our combined sewer network. Then in 2011 we added ‘Real Time Control’, a series of intelligent gates and valves that maximized system capacity and prioritized access to the waste-water treatment plant for CSO basins that would otherwise have overflowed. This smart sewer network, and to an extent the Phase 1 long-term control plan projects, are the reasons for our massive early CSO reduction success.” – Mayor Pete Buttigieg, South Bend, IN, May 18, 2017

2. Design and implement a Customer Assistance Program (CAP) specific to your service area’s needs.

Engage with the community to collect a diverse range of input to ensure your process is completed equitably—and establish metrics that track progress.  

CAPs create rate structures designed to provide payment options for low income customers or for those whose incomes are fixed or fluctuate. In November 2018, South Bend leaders established a CAP committee, which included members of the common council, tasked with assessing and creating metrics , policy options , and outreach strategies to create and implement the CAP.

A 2019 South Bend Ordinance created a tiered monthly credit for qualifying customers based on Median Household Income (MHI); customers would be considered eligible if they are 100%, 75% or 60% of the state MHI. The proposed monthly credit for qualifying customers lead to $10, $14, and $19 bill reductions respectively. All utility rate payers received a $1.70 reduction in their sewer bill.

However, in response to the COVID-19 pandemic, this ordinance was amended and the monthly credit for qualifying customers increased to reductions of  $17.62, $23.62, and $31.12 respectively. All utility ratepayers received a $2.62 reduction in their sewer bill. To measure the success of the program, South Bend will track the number of delinquencies.

3. Establish key partnerships to keep your administrative costs low.

Partners in your community may already have the connections and data you need to help customers access affordable water.

South Bend partnered with Real Services, a social services organization, to better understand the specific needs in their community. Real Services worked with South Bend to review their data, and to understand how many households receive LIHEAP funds. This partnership enabled the City to minimize administrative costs and establish metrics for qualification.