Consumer advocates protest 28.5 percent hike in Philadelphia water rates

FILE — In this Dec. 15, 2010 file photo, clear treated water flows from a tap continuously for random testing at the intake facility of the Beaver Falls Municipal Authority in Beaver Falls, Pa. Citing potentially unsafe drinking water, on Tuesday April 19, 2011, Pennsylvania state called on companies drilling in the Marcellus Shale natural gas formation to stop taking wastewater to 15 treatment plants by May 19, 2011. The announcement was a major change in the state's regulation of gas drilling and came the same day that an industry group said it now believes drilling wastewater is partly at fault for rising levels of bromide being found in Pittsburgh-area rivers. (AP Photo/Keith Srakocic, File)
FILE — In this Dec. 15, 2010 file photo, clear treated water flows from a tap continuously for random testing at the intake facility of the Beaver Falls Municipal Authority in Beaver Falls, Pa. Citing potentially unsafe drinking water, on Tuesday April 19, 2011, Pennsylvania state called on companies drilling in the Marcellus Shale natural gas formation to stop taking wastewater to 15 treatment plants by May 19, 2011. The announcement was a major change in the state's regulation of gas drilling and came the same day that an industry group said it now believes drilling wastewater is partly at fault for rising levels of bromide being found in Pittsburgh-area rivers. (AP Photo/Keith Srakocic, File)
Posted: July 11, 2012

A consumer advocate on Monday denounced the Philadelphia Water Department's request to boost its rates 28.5 percent over the next four years following three years of rate increases that outpaced inflation.

"A 30 percent increase is just not reasonable in today's economy," Thu B. Tran, a lawyer for Community Legal Services Inc., said at the first of five public hearings that the water department is holding on its $316 million rate increase.

The city says it needs the rate increase to cover higher costs of operating the utility, including its storm water management system, and that its rates are still lower than those paid by suburban customers served by investor-owned utilities.

But the advocate protested that the increases are based on unproven estimates and financial forecasts.

The city's proposal would increase rates an average of 6.5 percent a year for each of the next four years, raising a typical homeowner's bill $196 a year over today's rate. The last of four proposed increases would go into effect on July 1, 2015.

The city's rates have increased 27 percent over the last three years, during a time when the Consumer Price Index increased less than 10 percent. The water department had revenue of $558 million in the year ended June 30, 2011.

Tran questioned why the water department was seeking an increase when its reserve fund, which had been projected to contain $50 million in 2012, actually contains $186 million.

But Joseph Clare, deputy water commissioner, said that about $30 million of that fund, called the rate stabilization fund, would be needed to balance accounts at the end of the fiscal year, and the water department's rate proposal already calls for reducing the fund further over the next few years.

Hearing examiner Michael A. Bowman, a lawyer, will conduct the hearings and make his recommendation to City Water Commissioner Howard Neukrug, who makes the final determination. During its 2008 proceeding, the water commissioner largely ignored the hearing examiner's recommendation, prompting a legal challenge from Community Legal Services.

The water department's rate request inspired City Council to approve a ballot issue for November to create an independent body to review water and sewer rates, but the vote won't affect the current proposal.

About 50 people attended Monday's hearing at the Philadelphia Senior Center in Center City, including several commercial customers who complained about the dramatic increase in storm water charges imposed in recent years on businesses with large, impervious surfaces, such as warehouses or auto dealers.

"It's hurting these businesses," said Richard Gorodesky, a commercial real estate broker for Colliers International.

Ruth Bazemore, Action Alliance of Senior Citizens Greater Philadelphia, called the proposed increase "outrageous."

Joanne Dahme, the department's general manager of public affairs, said the hearings were useful "to make our customers understand why their rates are going up."

The water department will hold four more hearings: from 6-8 p.m. Tuesday at Roxborough Memorial Hospital, 5800 Ridge Ave.; from 6 p.m. to 8 p.m. Thursday at Holy Family College, Campus Center Conference Room 115, 9801 Frankford Ave.; from 6:30 p.m. to 8:30 p.m., July 16, at the YMCA, 1400 N. Broad St.; and 6:30 to 8:30 p.m. July 17 at White Rock Baptist Church, 5240 Chestnut St.

More information is available on the department's website: www.phillywatersheds.org/rates.

Contact Andrew Maykuth at 215-854-2947 or amaykuth@phillynews.com or follow on Twitter @Maykuth.

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