The Hearings on the proposed 20% water rate hike have begun. Rest assured, the Philadelphia Water Department (PWD) doesn’t need nor seek the 20% increase. The regulatory agency, the Philadelphia Water Rate Board (Board) appoints a lawyer, which it calls the “public advocate.” Millions are spent on well-connected lawyers, consultants, and hearing examiners to make the proceedings seem respectable. But it is not. The rate increase will be lowered to what PWD wanted, the consultants and lawyers will all cash large paychecks, and the lawyer hired by the Rate Board, which it calls the “public advocate,” which, has no public clients and answers only to the Rate Board will complete the charade. In a back room, which they call private and others call secret, they will negotiate a rate increase that allows PWD to get what it wants.
This has been going on for over 10 years. Water and Sewer rates have far outpaced inflation, and no end is in sight. Unless PWD is forced to put the public first, it will raise rates this year, next year, and the following year and file for another rate increase.
To illustrate how bad it is, Hall Monitor’s Consumer Reporter Lance Haver filed to participate in the hearings. This gives him the right to seek information in what is called discovery. As upsetting as what was discovered, it’s what the PWD and the Rate Board refused to answer, which is maddening.
PWD has acknowledged that it will hire five different consultants to argue for a rate hike. It will pay its private lawyers as much as $ 750 an hour. However, it does not hire a consultant to keep rates down.
Question:
PLEASE LIST ALL THE RECOMMENDATIONS FOR COST SAVINGS
PROVIDED BY THE CONSULTANTS AND ADOPTED BY PWD
RESPONSE:
Answer
No consultant was delegated the responsibility of
recommending cost savings for this proceeding.
Question:
PLEASE LIST THE NAMES AND POSITIONS OF ALL PWD EMPLOYEES
IN THE COST CONTAINMENT COMMITTEE
Answer:
The Water Department does not have a “cost containment committee.”
One of the drivers of water rate increases is the large number of people experiencing poverty in Philadelphia. The program allows low-income families to pay a percentage of their income to keep their service. Unlike other anti-poverty programs paid for by the tax base, PWD taxes water; they call it a surcharge to pay for the program. If more people had living wage jobs, the cost of the low-income program would decrease, and rates could be lowered.
One of the advantages of Philadelphia is our plentiful and relatively low-cost water (sewer service is a different situation). If they are water-intensive, like food processors and distillers, businesses looking to relocate must consider the water cost. The southeast and southwest are all suffering from water shortages. Philadelphia could take advantage of this but does not:
PLEASE LIST THE EMPLOYEE (S) TASKED WITH IDENTIFYING BUSINESSES WITH THE NEED FOR WATER IN THEIR PROCESSING AND ALL THE REPORTS
PROVIDED TO THE CITY’S COMMERCE DIRECTOR
RESPONSE:
The Water Department does not have employees tasked with the specific responsibility
Question:
PLEASE PROVIDE THE INCENTIVE RATES OFFERED NEW BUSINESSES
TO LOCATE IN THE CITY OF PHILADELPHIA
RESPONSE:
The Water Department does not have a program as surmised in the information request.
As upsetting as all this is, the refusal of PWD to look for cost savings, find ways to save on procurement, and miss opportunities to bring businesses into the City, it is the information PWD, the Public Advocate and Hearing Examiner refuse to provide that is truly shocking:
Question:
Please provide a list of all PWD vendors with employees living in Philadelphia;
the amount of money spent with each of those vendors and the percentage of all
expenditures spent on those Philadelphia vendors.
OBJECTIONS AND RESPONSE:
The Department objects as it unduly burdensome and irrelevant to the
proceeding. The Department has literally hundreds of vendors. Confirming the locations of all
vendor offices (where employees assigned to PWD projects are housed) and then undertaking a
headcount of vendor employees in Philadelphia would take an inordinate amount of time and to
no constructive end.
Haver’s response to PWD objection:
What is shocking about this objection is that it shows how little the PWD Counsel understands about Philadelphia, PWD consumers, and the cost of poverty.
The City must have low-income plans because Philadelphia has a large population of people experiencing poverty. The tax base does not bear the cost of those income plans as it should be, but by the utility’s rate base, as a sales tax on a basic
necessity of water.
The idea that it is burdensome would be laughable if was not so illustrious of the lack of interest PWD has in hiring Philadelphia residents and giving contracts to Philadelphia businesses.
The Rate Board’s Hearing Examiner, agreeing to keep the information private, writes:
While the City of Philadelphia itself may have a broader interest in the revenues and associated taxes generated by various vendors from a City economic policy perspective, this is outside the scope of the Water Department filing here . . While Mr. Haver may believe that it is the responsibility of PWD to use “its buying power to create living wage jobs in the City of Philadelphia,” there is nothing in the Rate Ordinance that identifies this as a relevant factor.
In the coming weeks, there will be more exposure of how we are all being failed by the current system.
Our reporters sit through hours of city council meetings, dig through piles of documents, and ask tough questions other media overlook. Because we’re committed to addressing Philadelphia’s poverty crisis — and challenging those who sustain it. If you think this work is important too, please support our journalism.
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