Council Committee Heeds Cries Over Stiff New Stormwater rates

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HAPPY at passage of water-rate legislation change by Committee of Law & Government were Jeff Allen, Controller Alan Butkovitz and Stuart Parmet.

BY JOE SHAHEELI/ The one City agency that listens to no one, except possibly the Mayor, is the Water Dept. That’s because its Commissioner is empowered by the City Charter to set rates to insure we have enough revenue for that Department to insure we drink safe, sanitary water and we don’t drown in our own waste, which gets flushed into tanks, recycled, and only then returned to the waterways.

That’s the way it’s been since the City Charter was voted in by Philadelphians when they approved the City Charter in 1951, which gave the City a constitution, with prerogatives including self-rule, with the blessing of the General Assembly.

But the recent steep hikes levied by the Water Dept. in rates and the unevenness in which these rates are being placed on the citizens and businesses in this City have evoked cries from hundreds of small-business owners, with thousands of jobs dependent on them.

Those cries for help from what is seen as a department running amuck without regard to how a business can cope with those rates and survive has brought a rapid response from City Council.

Legislation, requiring a change in the city charter, limiting the way the Water Dept. can set rates, made its way unanimously through the Council’s Law & Government Committee, chaired by Councilman Bill Greenlee.

That legislation was introduced by Council President Darrell Clarke. Together with a corresponding resolution, it amends the Home Rule Charter to allow for the establishment of an independent rate-making Board for fixing and regulation water rates.

President Clarke said, “When we tax constituents, be it with rates or any other way, it is time for us to demand transparency and that is what this legislation is all about.”

Last Thursday, Law & Government voted out President Clarke’s legislation, putting it on the fast track for passage through what is seen as a favorable City Council.

The Committee had good reason to move the legislation speedily on the Council calendar. A three week series by Managing Editor Tony West in the Philadelphia Public Record highlighted the destructive impact the Water Dept.’s Storm Drainage rates was beginning to have on businesses with cement aprons. The articles illustrated the severity of levies on those companies, especially when compared to high-rise apartments and office buildings, which benefit from lower drainage rates despite the fact the water usage was astronomically higher than many buildings without water service, but saddled with large cement aprons.
City Controller Alan Butkovitz, heading the list of business owners testifying at the Committee hearing, said, “For more than a decade water customers have consistently seen their water rates increase. Since 2009, water rates have increased 18%. Most recently, in February of this year, the Water Dept. proposed a 28.5% rate hike for the next three years.

“These water-rate increases are on top of the stormwater-rate increase, which has sent shock waves to many business owners throughout the city. These new rates will greatly impact on many businesses, and in some cases by hundreds of thousands of dollars.”

Butkovitz noted the water drainage rates will make it impossible for businesses to sell their properties or businesses, saying, “There are almost 1,000 businesses greatly affected by those rates. One property owner, the operator of a shopping mall in the Northeast, faces a 900% increase in annual stormwater fees over the next four years. His water bill is going from $97,000 to $930,000.”

He noted, “Mid-size and small businesses are not economically capable of absorbing or minimizing these fees.”

Lance Haver, director of Consumer Affairs for the City, told the committee in his personal opinion, “The current system where the Water Commissioner acts as the judge of a rate increase his department requests, creates an appearance of impropriety and should be changed. Establishing a rate-making process that is unquestionably fair and just will, I believed make it easier for consumers to accept rate increases when needed.”

Noting the current rate-making process was established based on an agreement among the Water Dept., City Council and Community Legal Services in 1992, Andrew Stober, chief of staff of the Mayor’s Office of Transportation & Utilities, said, “The administration was open to further discussion with Council regarding improvements to our process and the manner with which rates are established.”

Buoyed by all this have been the businesses most affected, their owners feeling, until this hearing, their futures were bleak at the very best.

Members of the newly created United Business Owners Association of Philadelphia, which formed to protest the change in stormwater charges, were elated at the response to their concerns.

Their leadership testified at the hearing how the new stormwater runoff fees threatened to drive companies out of the city, resulting in fewer jobs and less income to the city.

UBOAP Chairmen Stuart Parmet, of American Box & Recycling Co., and Co-Chairman Jeff Allen, of Allen Brothers Wholesale Distribution, were among those testifying, as was Kerry Pacifico, one of the founders of the internationally recognized Airport Auto Mall and President of Pacifico Ford.

The group represents hundreds of local business owners, representing over 10,000 jobs operating in the city of Philadelphia. It pledges to make the voters and taxpayers of this city “the need to vote for the charter change when it appears on the ballot.”

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