Percent of Median Household Income Spent on the Average Annual Residential Austin Water Bill

Status

To keep rates affordable for customers, Austin Water uses award-winning financial strategies so that the average residential customer’s annual combined water and wastewater bill is less than 1.5% of median household income. In 2021, we surpassed that target, with customers spending just 1.22% of median household income on their water bill.

Trending

Since 2017, the percentage of median household income spent on the average annual Austin Water bill has steadily declined. Austin Water has maintained flat rates since 2018, but a modest increase has been approved for 2024. Even with this rate increase, we expect to stay well below the target of less than 1.5% of median household income.
Note: To see the underlying data for the chart, please select the "View Source Data" link.”

Additional Measure Insights

Annual bills for water and wastewater services as a percentage of median household income (MHI) is a benchmark commonly used within the industry as a measure of affordability. The challenge comes with identifying targets for what is considered affordable. An often-used standard ranges from 2.0% to 2.5% of MHI based on Environmental Protection Agency guidelines. Some utilities use the standard of 2.0% for water and 2.0% for wastewater, for a combined 4.0% of MHI. To ensure affordability for our customers and surpass other industry benchmarks, Austin Water has set a goal for average annual water and wastewater bills as a percentage of MHI of less than 1.5%.
Using this measure of affordability, in 2021, Austin Water customers spent 1.22% of median household income to pay their water bills. This is more affordable than water bills for many other major Texas cities.  Austin Water uses debt management strategies to deliver affordable water service, including securing low-interest Texas Water Development Board (TWDB) loans and using capital recovery fees to manage debt service costs, improve our financial stability, and mitigate rate increases.
For further information, click on the link below to view the 2023 Austin Water Affordability Metrics Report and MHI data.

Measure Details and Definition

1) Definition: This dataset demonstrates the affordability of the average Austin Water residential customer’s annual combined water and wastewater bill as a percentage of median household income. 
2) Calculation method: Average residential annual combined water and wastewater bill divided by the median household income for Austin. 
3) Data Collection Process: Austin Water rates and fees, American Community Survey data reported to the U.S. Census Bureau, and Census Reporter. 
4) Measure Target Calculation: The measure target is an often-used standard of what is considered affordable based on US Environmental Protection Agency guidelines. Austin Water's target of less than 1.5% of median household income (MHI) surpasses these benchmarks. The Austin Water Rates and Charges Group calculates the average monthly combined non-CAP residential water and wastewater bill and multiples this number by 12 for the number of months in the year. This is the average annual combined bill. The average annual combined bill is divided by MHI for the City of Austin. The result is the percent of MHI spent on the average residential customer's annual combined water and wastewater bill. 

[Formula: Average Monthly Bill * 12 months = Annual Combined Bill
Annual Combined Bill / City of Austin MHI = Percentage]

Austin Water initiated the Austin Water Affordability Benchmark Study in response to City Council Resolution No. 20180201- 068, which directed the City Manager to provide information on internal affordability benchmarks, conduct a comprehensive affordability study, and make recommendations on affordability metrics to track and communicate. The first Austin Water Affordability Benchmark Study was completed and provided to Council in December 2018. 
5) Frequency Measure is Reported: Annually (Calendar Year)

Date page was last updated: September 2023