PURPOSE

To review the policy requiring customers using life support equipment to provide proof of economic need in order to receive the Lifeline Rate. 

BACKGROUND

In 2005, the City Council (Council) requested staff to consider how an income means test might impact participants in the Life Support program.   The Life Support program is for customers who use certain life sustaining equipment to register.  Prior to July 2005, Life Support requirements did not include an income means test. 

Burbank�s rate assistance program, the Lifeline Rate, is the most generous in the region, providing the highest assistance per customer amongst surrounding utilities.  BWP supports the program with approximately $700,000 annually.  The intent of the Lifeline Rate is to provide financial assistance to customers who are having difficulty meeting their monthly expenses.   Based on Council direction, the program provides assistance to our most vulnerable customers, namely our senior and disabled customers with limited income.  The rate provides a substantial discount on energy, approximately 50%, discounts on refuse and sewer charges, and exempts the recipients from the monthly meter charge and utility users� tax.  The typical annual discount equates to approximately $300.

For customers who don�t qualify for the Lifeline Rate yet are experiencing temporary financial challenges, the Council approved modifying the Project Share program to provide annual support, rather than one-time support.   Project Share is funded primarily through community donations and income qualified customers may receive up to $100 in financial assistance each year.  This level of support equals and, in many cases, exceeds the level of support low-income customers receive in surrounding communities. 

ANALYSIS

When the rate assistance programs were reviewed with the Council in 2004 and 2005, Council reconfirmed the structure and design of the Lifeline Program yet questioned whether Life Support customers, without a demonstrated financial need, should continue receiving the discounted rate intended for low-income customers.

Prior to making a decision, Council asked staff to consider the impact of an income requirement for Life Support customers as a prerequisite for receiving the Lifeline Rate.  To help answer the question, a survey of Life Support customers was conducted to determine income and hardship levels.  The results revealed that about half of the Life Support customers receiving the Lifeline Rate would continue to qualify based on their household size and household income.  The remaining customers had monthly household incomes which exceeded the income limits of the program. 

After consideration of these findings, escalating energy costs, and the utility�s continuing challenge to keep rates low, the Council, in July 2005, unanimously elected to continue supporting the community�s most vulnerable customers with a very generous rate assistance program and to judiciously preserve those resources by adding an income requirement to the Life Support Program.   This allows limited funds to be managed for maximum benefit while assisting families and customers who are truly in need and most vulnerable.

RECOMMENDATION

Continue the existing policy of requiring an income means test for Life Support customers to qualify for the Lifeline Rate.

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