Urging U.S. EPA to Revise Financial Capability Assessment Guidance Document to Accurately Reflect Community Affordability
Adopted at the 93rd Annual Meeting in 2025
WHEREAS, the U.S. Environmental Protection Agency encourages communities to use Integrated Planning and Permitting to achieve compliance in a timely and cost-effective manner; and
WHEREAS, local governments and the U.S. Environmental Protection Agency utilize the Financial Capability Assessment to assess costs that are passed through to ratepayers to meet federal mandates in a mutually agreeable timeframe; and
WHEREAS, low-income and disadvantaged communities are disproportionately impacted by increasing water rates, as a larger portion of their income is allocated towards paying higher water and sewer bills; and
WHEREAS, EPA interprets statutory authority in the current Financial Capability Assessment to rely heavily on medium household income (MHI) to determine affordability resulting in federal policy that masks the financial impact on lower income ratepayers; and
WHEREAS, the current Financial Capability Assessment uses a single metric for cost of living and compares it with national benchmarks, with no consideration to regional variation;
WHEREAS, with an improved financial analysis, water providers can create a schedule of improvements that detail needed infrastructure investments to meet federal and public health guidelines without burdening customers, especially low, medium, and fixed income families
NOW, THEREFORE BE IT RESOLVED, that the United States Conference of Mayors urges the U.S. Environmental Protection Agency to revise the Financial Capability Assessment Guidance tool to incorporate the components included in the 2020 version including the Lowest Quintile Residential Indicator (LQRI) as a key factor in relative importance or greater importance than MHI to ensure that consideration is given to the lowest income earners when determining community affordability and to utilize local cost of living data.