Sierra Club Responds To Water Rate Budget Debate

Today the Sierra Club Falls of the James group released the following statement in response to Mayor Jones’ announcement earlier this month:

Sierra Club Declares Only “A Partial Victory” On Richmond Water Rates and Calls For More Reform

The Sierra Club Falls of the James group’s Executive Committee listened to Mayor Dwight C. Jones’ budget announcement from last week that calls for reducing the City of Richmond’s water service fee. We were pleased to hear the Mayor refer to it as an important conservation issue that deserves immediate attention. By almost halving the residential base charge from $49 a month to $26 a month, and making sure that higher users pay more for their use, water utility reformers can declare a partial victory as the City moves to a ‘conservation rate’ structure. We do appreciate this step forward.

At the same time, the creation of a fund for helping low income residents with water bills needs more examination. While the Sierra Club is not against assistance for low-income residents, there is concern that this measure will complicate the overall rate structure and add more bureaucracy to the public water utility. Instead of financial assistance for water customers, the DPU would be wiser to offer a substantial discounted volume rate like Henrico for those customers who use 3 ccf or less of water/month. This would have a twin aim of setting a conservation goal for its customers and providing an affordable water bill for those willing to conserve water.

If the City were going to create this additional assistance program, then it would be wise to consider additional conservation measures. For example, the Sierra Club notes and agrees with Councilperson Parker Agelasto’s suggestion to use a portion of the assistance program’s funds for a new appliance rebate program, low flow adaption kits, as well as other conservation incentives. Other cities fund programs like this to help their citizens modernize and conserve their water resources and make them more self-resilient.

At this juncture, we urge Richmond citizens to listen and follow the budget debate carefully. It has been noted already that, despite the proposed reduction in the base rate, the rise in volumetric rates may mean increased overall bills for residents in the future and more revenue from the sale of a basic necessity. We do not believe that the water utility has shown justification for the relatively high base rate. The Mayor’s proposal is not revenue neutral: with the proposed higher volume rate, the base rate could be reduced to $20/month and, even a 10% drop in water use, still be revenue neutral. The DPU’s Payment-In-Lieu-Of-Taxes (PILOT) demands scrutiny because the base service charge could be reduced further if the DPU is not paying more than required into the general fund. There still exists the glaring differences in residential water prices between the City and the surrounding counties, which may in effect be encouraging suburban sprawl.

In short, despite the Mayor’s positive step, we expect that water rate reformers may have some very good reasons for calling for further reform. Again, Mayor Jones deserves credit for his conservation record, which includes the establishment of RVA Green, the City’s first sustainability plan. That said, we would be remiss on this subject if we did not call for further action.