Testimony of Ed Lazere, Executive Director, to the Board of Directors of DC Water and Sewer Authority

Chairman Walker and other members of the Board, thank you for the opportunity to submit testimony today on this important issue. My name is Ed Lazere and I am the executive director of the DC Fiscal Policy Institute. DCFPI engages in research and public education on the fiscal and economic health of the District of Columbia, with a particular emphasis on policies that affect low- and moderate-income residents. 

Thank you for opportunity to comment on rates proposed for the Fiscal Year beginning October 1, 2012. My testimony focuses on the rapidly rising  “impervious area charges,” or IACs.  I fully support DC Water’s Clean Rivers initiative to address the combined sewer overflow problem that contributes adversely to the health of our region.  I also support the idea of basing such charges on impervious surfaces. 

But I am concerned that sharply rising fees will be particularly harmful to low-income DC residents and hope the Board will address this. 

First, I recommend that the impervious area charges be levied at higher rates on commercial properties than on residential properties.  The IACs are based on impervious surfaces for each property owner,  but they do not include  transportation rights of way, even though streets, sidewalks, and alleys account for nearly half of DC’s impervious area.  Impervious transportation surfaces are more beneficial to commercial customers generally than to Residential customers.  Commercial properties rely on roads for employees to get to work, and most of those employees are non-DC residents.  Retail and other businesses rely on transportation infrastructure to enable customers to get to them.  

Yet DC Water proposes identical IACs for Residential and Non-residential customers. Because commercial property owners can treat IACs as a cost of doing business and pass them on to tenants and customers, it would make sense to have higher rates for non-residential customers than for residential customers. 

In addition, while there is a history and tradition of offering lower utility rates to low-income residents, including DC Water’s Customer Assistance Program (CAP), it does not now apply to IACs.  As IACs become larger and grow as a share of a customer’s water bill, we recommend that the Board  set a 50 percent discount for the IAC component of bills to CAP customers. 

Thank you again, for the opportunity to testify.