The Philadelphia Water Department is seeking a combined 20.7% increase; it wants $ 16.47 monthly, $197.64 per year more than the average Philadelphian currently pays. According to PWD’s filing, the rates are already “not affordable by industry standards.” Rates have gone up every year since the Water Rate Board, its regulatory body, has hired the same hearing examiner and same lawyer to “represent the public.” Six years of continual rate increases. Part of the proposed rate increase will increase the money kept in PWD’s two cash funds, the “Rate Stabilization Fund” and the “Residual Fund.”
The” advanced notice” issued by PWD does not include the size of the increase. Nor is the size found in any single document. The water bill has many different parts: service charges, usage charges, stormwater charges, and a surcharge to pay for the water department’s low-income plan, TAP, and its low-income senior discount. It is challenging to grasp just how large a rate increase PWD seeks. If the different parts of the bill are added together, the bill for the average household will go from its current $ 81.77 to $ 98.74 a month.
The filing acknowledges that PWD’s two surplus funds have more than enough in the accounts to cover this year’s proposed $76.3 million rate increase. Combined, the two funds have over $120 million. The funds are kept in a bank with no local branches that don’t market mortgages or loans in Philadelphia.
PWD claims it needs a rate increase partly because its collection rates have fallen well below its projections. People struggling to keep up with the bills are conserving and using less than PWD’s contracted consultants projected.
The 20.1% percent spike will increase the extra that is collected. PWD’s experts claim that bondholders want the bills to increase so that instead of PWD collecting $1.20 for every dollar borrowed, it will collect $ 1.30. The millions in the surplus funds will increase. The filing focuses on the “comfort” of the bondholders without raising concerns about how working people, who make too much to qualify for any of the low-income plans, can find the additional money.
There are many raised by the filing: Why can’t the Water Revenue Bureau, PWD’s bill collector, collect at historic levels? Why does PWD say costs are increasing when its reports state otherwise? Why does the City charge a sales tax on water, collecting $ 5 million a year through another euphemism, a scoop? How many “nonprofits” are not paying water and sewer bills? Why don’t properties in the land bank accumulate water bills that new owners must pay? Why do other water utilities that provide less “comfort” for bondholders have lower rates? And when will the constant year-after-year double-digit rate increase stop?
If the Water Rate Board appointed advocate and its hearing examiner represented the public, PWD would have to answer those questions and more. For example, what steps has the water department taken to lower operating costs? Why does it keep its surpluses out of city banks? Why doesn’t PWD join the buying cooperative to keep the cost of its supplies down? If usage is down, PWD has the surplus capacity; why can’t that bring in more businesses, like Dietz Watson and Jacquin’s Spirits, to create living wage jobs here in Philadelphia?
The problem is the public is not represented in these proceedings. According to the Chair of the Rate Board, the regulatory body hires a lawyer who has no client relationship with the public. The Rate Board’s advocate refuses to meet with community groups to seek guidance in what positions to take. And every year, for the past 6 years, it has settled, giving the Water Department every penny it wants while the ratepayers advocate collects a check. Despite repeated requests, the rating board has refused to post the contracts of its advocate and hearing examiner, and neither has filed conflict of interest statements.
There is little doubt that PWD will get slightly less than the 20% increase. The private, well-compensated PWD lawyers know the system well: Ask for more than what you want, get the Rate Board’s advocate to agree to settle, the Rate Board’s advocate claims they have done some good, and everyone is happy except, of course, the ratepayers, who will see a 7th and 8th year of continual rate increases. The rate increases will never stop as long as the Rate Board and its advocates play the game and protect the water department and the bondholders at the expense of the public.
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