"If you let politicians set water rates, we'll all be drinking mud."Those words were uttered by someone who knows a thing or two about Philly politicians, former Mayor and Council President John Street.
On Thursday, City Council is set to vote on a bill that will allow a board of political appointees to set water rates.
Currently, water rates are set through a public hearing process in which the Mayor and City Council select a hearing officer and a public advocate, with the final decision to approve rates made by the Water Commissioner.
While not perfect (or completely devoid of politics), the process has allowed the Philadelphia Water Department (PWD) to maintain water infrastructure and set rates that ensure we have clean drinking water. [PennFuture intervened in both the 2009 and 2012 rate proceedings.]
The current rate process has afforded the City the ability to make badly needed investments in stormwater infrastructure through its Green City Clean Waters initiative, the City's Environmental Protection Agency (EPA)-mandated plan to protect and enhance our water supply by managing stormwater.
But thanks to a ballot question last November -- and last-minute amendments in City Council last week -- things could change, and soon. And not in a good way.
Let's back up: Last November, voters approved a ballot question to create an "independent" rate-making board. (Not surprising given that Philly tends to approve the cleverly-crafted ballot questions). PennFuture opposed the ballot question at the time, as it will instantly burden the process with more political actors who may not understand the need to balance low rates with the need to create a good water system.
On Thursday, City Council will vote on a bill that will officially create this rate-making board and regulate how the rates are imposed.
But missing from that bill are key provisions that would provide the water department basic fiscal certainty -- fiscal certainty that is needed to protect our water supply, maintain aging infrastructure, and adapt to unforeseen economic circumstances.
Amendments introduced last Thursday removed essential minimum financial standards that had been negotiated with the Water Department, City Council, and stakeholder groups -- standards that would help guarantee that the department has rates set high enough to cover operating expenses and debt service.
In June, a bill passed out of committee that did just that. We testified in support of the original unamended bill at the committee hearing because it gave the department the best chance to continue its crucial stormwater work and adequately invest in key infrastructure projects.
In addition to harming the Water Department's ability to carry out its mission, the lack of basic financial standards could damage the department's credit rating and cause concern among bond holders -- ultimately leading to higher rates for all ratepayers.
We urge you to contact your Councilmember and tell them that the Water Department needs basic financial certainty to do its job and provide clean, safe drinking water.
Andrew Sharp is PennFuture's Director of Outreach and works out of our Philadelphia office.
