The Philadelphia Water Department, in response to our discovery requests, is finally revealing how much it paid to renovate its Center City offices. While PWD claims to be unable to pay its bills and is forced to raise rates, its executives have spent over $1.5 million renovating its offices. The money to pay for these renovations comes from the rate increases, increases that were agreed to by the Public Advocate.
While 1.5 million out of PWD’s budget is a small percentage, it is indicative of PWD’s Strategy. PWD chooses not to contain costs or seek money from the City’s surplus American Recovery Plan Act. Instead, PWD seeks rate increase after rate increase. If the current proposal is allowed to go forward, there will 4 consecutive years of rate increases, increasing rates by over 30%, far more than the inflation rate.
As upsetting as it may be to discover rather than cutting costs, PWD is renovating its Center City offices, this fact is really the tip of the proverbial iceberg. What is perhaps as illustrative is the Hearing Examiner’s response to people who testified at the Public Hearings.First, a member of the Public asked if PWD was spending millions on renovating its offices. Despite there being a deputy water commissioner, 15 members of PWD’s staff, and two of PWD’s many lawyers attending the Zoom hearing. No one answered.
When I pressed the Deputy Water Commissioner to answer, the Hearing Examiner protected him and every other PWD employee attending the hearing allowing them to say they didn’t know if the headquarters were being renovated. By allowing PWD to avoid public scrutiny of how much it is spending on renovations, the hearing examiner protected the reputation of the PWD.
The Hearing Examiner’s defense of the Water Department exposed what the Public is up against in fighting the rate increase.
The ongoing hearing is making clear saving money isn’t a priority for PWD. Its headquarters are located in some of the highest price real estate in the City. PWD rents 110,000 sq feet in 1101 Market St. PWD has not submitted any proof that it is trying to lower its rent either through negotiations, using less space, moving its headquarters into a neighborhood to help stabilize a part of the City that needs help, or combining office space with PGW.
Nor has PWD tried to cut costs by combining services with PGW. It has made no attempt to change the current rules for procurement so PWD can join a buying co-op and save millions. PWD, rather than hire consultants to find ways to cut costs and save money, PWD has hired consultants to help it raise rates.
Most people would prefer that PWD look to cut costs, forgo office renovations, and find lower-cost office space before PWD seeks another rate increase. Will the Public Advocate take that position? Will it discover what the public wants and fight for it?
Probably not. It was made clear during the hearing the Public Advocate does not have the public as a client. No matter what position the public wants the Public Advocate to take, the only entity that can remove the Public Advocate is the Water Rate Board, a five-member board that has the former water commissioner, the former chief legal counsel for PGW, and two real estate developers on it.
Unlike with other public advocates, there are no checks and balances on the position. The elected Attorney General nominates the State’s Public Advocate, and the State Senate confirms the appointment. The public advocate in the water rate case has no confirmation process. And no independent elected official appoints someone to serve as the Public Advocate. Instead, the Philadelphia Rate Board, appointed the Mayor, who also hires the Water Commissioner and is responsible for the operation of the Water Department, has twice, without public input, extended the public advocate’s contract.
To make matters worse, the Public Advocate’s law firm, Community Legal Services, receives contracts from the Mayor to provide other services. Angering the Mayor by opposing his Water Department’s rate increase proposals may have repercussions. And that may be a reason the public advocate has settled the last rate increases.
It may be up to the next mayor and next Council President to find a better way to protect consumers. It should be obvious to all, after consecutive rate increases, that what we are doing now only works for the water department and its paid consultants.”
And I thought you might enjoy this. What my family of “Hillel” Jews did to celebrate easter.
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