This Wednesday at 3 pm,” Via Zoom Online and via Phone only” the Philadelphia Water Rate Board will be voting on “Consideration and Vote on Final Rate Determination in the TAP-R Rate Reconciliation Proceeding” Unlike all other governmental bodies, the Rate Board doesn’t meet in public.
The five members of the Rate Board, comprised of the former Water Commissioner, the Former chief legal counsel for PGW, a Developer, an investment banker, and the State’s former Consumer Advocate, do not have to meet with the people whose rates they will be “Reconciling.”
What will be voted on at the virtual meeting? No one will know unless they attended the last rate board meeting virtually and took notes, as the Hall Monitor did. As of Monday, June 24, there is no posting on the Rate Board’s web page about what motion will be voted on.
But if it passes, and of course it will, as no elected official or member of the rate board objects to raising rates for the fourth year in a row, rates will go up by 12%. However, the rate board will likely state that it’s not an increase but an adjustment. The advocate it selects, judges, and awards no-bid contract extensions to will claim it saves ratepayers money because the increase is less than what the PWD sought. (Historically, PWD has always asked for more than what it needed.)
Philadelphia Hall Monitor Analysis
How have we come to this: Constant water rate increases, a public advocate that does not legally represent the public, and hidden contracts that allow the Rate Board to judge the adequacy of the representation?
The City of Philadelphia owns the Philadelphia Water Department (PWD). The City not only makes a small amount of money from the interest of PWD’s cash accounts but also spends millions of dollars on contracts. And not all of the contracts are given based on the lowest cost. For example, PWD has a surplus of 150 million dollars. It calls the account a” rate stabilization fund.” The bank that gets the deposit isn’t chosen based on what helps the City but on the bank’s connections. The City chooses US Bank, which has no retail branches in the City, over a City credit union, which would offer mortgages, car loans, and employment for Philadelphians.
The lawyers the City hires to represent PWD and act as PWD’s bond counsel are not chosen based on low-cost bids. The system is so opaque that not even the “public advocate’s” contract is posted on any web page.
Millions of ratepayers dollars are spent on contractors, suppliers, and professionals. The City does appear to stop “pay to play” for no-bid contracts by stating:
(a) If an individual makes contributions in excess of two thousand five hundred dollars ($2,500) (as such amount is adjusted from time to time under subsection 17-1404(1)(c) or subsection 17-1404(1)(d)) in the aggregate during a calendar year to a candidate for nomination or election to any elective City office or to an Incumbent, then, during the term of office to which such candidate is elected or during the Incumbent’s term of office, the individual shall not be eligible to apply for or to enter into any Non-Competitively Bid Contract in excess of ten thousand dollars ($10,000).
However, the law does not prohibit anyone from giving to a “Political Action Committee” and has 12 specific exemptions. Including this:
(11) The provisions of this Chapter shall not apply to a Non-Competitively Bid Contract awarded by the Law Department or counsel for a City-Related Agency, whether awarded directly or through outside counsel.
The only institution supposed to protect ratepayers, the “Public Advocate” by contract, serves the rate board, not the public. The Rate Board has refused to hold a public input session to see what the public wants in its advocate. The captured advocate refuses to establish a ratepayer advisory committee to help it make decisions, refuses to meet with RCOs and other community groups to seek input, and claims that sending emails is a sufficient way to interact with the public.
As a result, rates continue to climb, PWD refuses to undergo a management audit, seek other sources of funds for its needed low-income plans other than struggling ratepayers, and refuses to change how it operates.
And why should they? The leaders, the people they contract with, and the City itself are happy with the way things are going. The Board ensures its advocate does its bidding by offering it four years of no-bid contract extensions without any public input and not posting the terms of the contract on the rate board’s web page.
The Rate Board and its public advocate say there is no need for in-person meetings where people can be seen and speak out. They argue that nine people attending a virtual meeting is a good turnout, and there is no reason to hear from anyone else. The nine who spoke all opposed the rate hike. If there were 200 people in a room speaking directly to those who are trying to protect the status quo, it would make a difference.
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