Finding a Balance: Weighted Average Residential Index Affordability Guide for Akron’s Capital Improvement Program Needs

The City of Akron has committed significant funds to comply with the Clean Water Act and its 2009 Consent Decree to eliminate combined sewer overflows (CSOs) into the Cuyahoga River; however, the funds needed for compliance are competing with the City’s infrastructure renewal, stormwater management and control, and other local environmental priorities. Recent economic conditions and associated funding constraints compound the financial stress on the City and its ratepayers. Using EPA’s Integrated Planning Framework, the City is developing a more cost-effective approach to meeting these requirements. The overall goal of Integrated Planning is to protect public health and the environment at an affordable cost.A long-term financial model was used to balance impacts of funding projects on customer affordability to sustainably maintain the City’s wastewater system. The City worked with Hawksley Consulting, a wholly-owned subsidiary of MWH Global, to present its affordability case before USEPA. Hawksley’s approach to measuring affordability more accurately is called WARi™ for Weighted Average Residential Index. It enhances visibility of residential affordability for utility managers by focusing on three key areas that EPA’s traditional calculation of financial capability neglects: population details by neighborhoods; full distribution of income unique to the community; and real rather than hypothetical bills.Applying WARi™ in Akron, we provided a more detailed picture of the City’s service area financial capability. WARi™ was used to demonstrate that over time, the Integrated Planning capital improvement plan resulted in fewer communities in the City’s service area under high financial impact than with the baseline plan.This better measurement of affordability is being used as a tool to aid the City’s USEPA negotiations. The convergence of WARi™ with a financial planning model helps the City evaluate how affordability metrics shift in the community over time.