If you have opened September’s water bill, you might be thinking Yogi Berra was right: “It’s Déjà vu all over again.” For the eighth year in a row, the Philadelphia Water Department (PWD) has raised our bills. This time it’s been raised 7.5%, more than twice the increase in labor costs and 2.5% more than the inflation rate.
In 2020, the average bill was $66.73. Bills have risen 44% since then. Every rate increase resulted from a ‘secret’ (PWD calls it ‘private’) negotiation between PWD and the person hired by the regulatory board — the Philadelphia Water Rate Board. In the last proceeding, PWD received 96% of what it originally asked for, and PWD always asks for more than it needs.
Not a single elected official, community group, or advocacy group agreed to the settlement. One well-paid lawyer, appointed by the regulatory board and answering to no one but the board itself, agreed with PWD’s request for higher rates. To add to the misdirection, the rate board calls its lawyer the ‘public advocate,’ despite stating in legal proceedings that the lawyer does not legally represent the public, has no clients, and can only be fired by the rate board itself. At the last ‘Public Input Hearing’ on this rate increase, not a single member of the public testified. The rate board’s advocate, which was paid to do outreach, failed. The public and elected officials have no control over the rate board’s lawyer’s decision to agree to the rate increases.
It is hard to fathom that, at a time when Philadelphia City Council is holding hearings on affordability, the city-owned PWD is not just raising rates; it’s placing a tax (PWD and the rate board’s lawyer call it a ‘surcharge’) on our water bill to cover the needed low-income plan. This is unlike other low-income plans, which are paid for by the general operating budget of the federal, state, or city government. PWD and the rate board have decided to place the greatest burden of the low-income plan on those struggling to keep up with ever-rising water rates.
Neither PWD nor the rate board has ever asked our state legislators or our City Council to allocate budget funds to help low-income citizens. Under PWD and the rate board’s program, SNAP, which helps pay for rising food costs, would be paid for by a sales tax on produce, and Medicare and Medicaid would be paid for by a sales tax on doctors’ bills.
The worst part about ever-increasing water bills is that alternatives exist. Alternatives that PWD, the rate board, and the rate board’s advocate refuse to consider.
PWD could combine services with Philadelphia Gas Works — the other city-owned utility. There is no reason to have two billing departments, collection departments, and two headquarters. PWD could save millions of dollars by moving out of its Center City offices and into PGW offices, or into offices in a part of the city that could use development, like 52nd and Market or Broad and Olney.
Whenever the issue of combining services with PGW is raised, the rate board and its advocate respond that it is beyond the scope of the hearings. According to the logic used to rubber-stamp every secret settlement, all the rate board can do is make sure the budget is balanced and that bondholders are paid. Every mistake, every missed opportunity is covered by reaching into our pockets. PWD has never undergone a management audit to look for savings.
If you are still unsure how much legal collusion there is between PWD, the rate board, and the lawyer the rate board appoints, consider the statements made by the lawyer’s expert.
Lance Haver, Hall Monitor’s consumer reporter, asks the questions. Mr. Morgan, the ‘expert’ whose contract is approved by the water rate board and its Lawyer, answers:
Question: In all the other proceedings that you’ve participated in and provided expert testimony, is there any hearing where you have recommended against an increase in the TAP surcharge?
Answer: No
Question: Do you consider the affordability of the TAP surcharge when making your recommendations for an increase?
Answer: As I said, no.
Question: Do you consider public input when making your recommendations?
Answer: I did not include a factor for public feedback.
Question: Did you consider funding the TAP program from the city’s operating budget like we fund the low-income SEPTA riders program?
THE WITNESS: No,
And the cover-up by the rate board’s appointed hearing examiner:
MR. HAVER: Are you, (Hearing Examiner Sophy), going to force the rate board’s expert to answer how a surcharge on a basic necessity is different than a sales tax on a basic necessity?
HEARING OFFICER SOPHY: I will not.
And finally, the statement the hearing examiner issued while rubber-stamping the settlement:
“Both parties should be commended (PWD and the rate board’s advocate) for continuing to pursue a compromise, adding to their workload even after the filing of briefs in an effort to reach an outcome satisfactory to both.” (Page 11)
Of course, the hearing examiner did not consider whether the outcome satisfied the ratepayers.
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