This past Thursday, May 14, the Philadelphia Water Department (PWD), the Philadelphia Water Rate Board — the body that decides on water rate increases — and an “advocate” appointed by the rate board, argued before a hearing examiner appointed by the rate board about how much more water rates will go up. In the last five years, PWD has raised rates by over 55%. The average Philadelphian will now pay $1,157.92 a year, $391 more, as a result of settlement agreements between the PWD and the “advocate” appointed by the rate board. PWD and the rate board’s advocate agree the rates should go up further, and their only disagreement is by how much.
The size of the rate increases, and the failure of the PWD and the rate board’s “advocate” to seek solutions beyond continual rate hikes, are issues the water department and the “advocate” are hiding from the public.
A lawyer, representing the Water Revenue Bureau, Renardo Hicks, did not want Hall Monitor viewers to see the hearing or collusion. He told the Hall Monitor that it did not have his permission to use video from the hearing. The law is very clear: Public events can be recorded, and no permission is needed.
The rate board did hold public hearings. There was little to no outreach, and not a single water consumer testified in-person or “virtually.” The rate board’s “advocate,” paid to inform consumers, failed to list the hearings on its web page. It refused to list the groups it met with in person before deciding to support the increases. The advocate’s expert said it does not consider affordability or public comments before agreeing with the water department that rates should increase.
The Water Department did send out a notice, but it failed to mention that a rate increase was pending. The notice said: “You can be part of the conversation about how to keep water affordable for all customers in Philadelphia.” The PWD’s expert stated that it did not consider affordability either.
The rate board’s advocate’s web page makes no mention of the proposed rate increase or what consumers can do to stop the ever-increasing rates.
As to why the Water Department, the rate board, and the rate board’s “advocate” failed to conduct adequate outreach — there is only speculation as to why not. It may be that the PWD lawyers don’t want to call attention to the failure to explore options for continual rate hikes. Over the past 10 years, PWD has never hired an expert to identify cost savings. It has hired many experts to argue for rate increases.
The rate board may not want people to know the backgrounds of its five members: the former Water Commissioner, the former chief legal counsel for PGW, a real estate investor, an asset manager, and the former State Consumer Advocate who previously supported rate hikes.
The rate board’s “advocate” may not want people to know that they have agreed to every rate hike over the last six years, have no client group, are controlled by the rate board, and answer to a board of directors composed of corporate lawyers.
Most likely, though, it is that they didn’t want people to know this very necessary public program is funded by a sales tax on water bills. A tax they call a surcharge.
When the Hall Monitor asked, “What is the difference between a surcharge and sales tax?” the rate board’s “advocate” refused to allow an answer. Hicks called for Hall Monitor’s Lance Haver to be “admonished” for pressing the hearing examiner to explain the difference. I was insulted that Mr. Hicks thought “admonishing me” would stop me from seeking the truth.
It is illegal in Pennsylvania to charge sales tax on tap water, food, clothing, and other necessities. The TAP program, which allows struggling families to pay a percentage of their income for water, is funded by a sales tax that hits hardest those who make too much to qualify for TAP but not enough to live a middle-class life. A family earning $40,000 a year and one earning $400,000 pay the same tax rate.
When City Council sought to create a fund to help people ride SEPTA, they didn’t ask for a sales tax on SEPTA passes. They asked all taxpayers, including real estate and stock speculators, to share the cost. By using a water sales tax, PWD, the rate board, and the “advocate,” all shield some businesses and speculators from sharing the cost of the TAP program.
Council is allocating $33.65 million from the city’s proposed budget of $6.73 billion for SEPTA rides. It could eliminate the water sales tax by funding the TAP program in a similar way.
And that may be why PWD, the “advocate,” and the rate board don’t want anyone to know about the proceedings. They like things as they are and don’t want anyone to challenge the status quo. After all, another $400 a year in troubles is a real burden to some, but may not be to Ivy League lawyers, corporate executives, and well-paid consultants.
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