Past due: Plan to stop water shut-offs sputters as rate hike looms
Salima Ellis tries hard to pay her water bill in full every month, but often it's difficult to find the $80 or so she needs to keep the H20 flowing and her account up to date.
Salima Ellis tries hard to pay her water bill in full every month, but often it’s difficult to find the $80 or so she needs to keep the H20 flowing and her account up to date.
The 56-year-old Mount Airy resident has struggled to find work since last year when the elderly woman she worked for as a personal care assistant passed away. Money was tight even when she had a steady paycheck. Now the family is counting every dollar as they push to get by on the part-time wages of Ellis’ daughter, a Temple University student, and her mother, who also lives with her and receives a slim Social Security check.
The family’s water bill became a problem a few years ago when a new, $12 charge began appearing each month on the Philadelphia Water Department statement. “I was like, dang, I can’t pay that right now. Then I was like, oh, maybe I’ll pay half,” Ellis said. “Then it started to become, half, half, half, half, every month and I said, nope, I got to pay the full bill because it’s going to accumulate. I had a bill one time for $196.”
“I was going to try to make a payment arrangement, but they would never answer the phone or call me back. So they sent me a shutoff notice. I pay my bill, and you’re going to cut me off for $196?” she asked.
The $12-a-month stormwater charge was just the beginning. Water rates subsequently rose in 2016 and 2017, increasing 10 percent over two years.
Now the water department is proposing another series of annual rate hikes, which the independent Water, Sewer and Stormwater Rate Board has been reviewing in a series of hearings. The board will vote on the request in July and customers will start paying the new, higher rates in September. Over three years, the proposed change would amount to a 10.6 percent increase — $87 to $95 per year for the typical customer.
Water Commissioner Debra McCarty said her department needs the increase to pay for rising personnel costs and ongoing compliance with the federally mandated Green City, Clean Waters program. The program uses green infrastructure such as rain gardens, stormwater planters, and porous pavement to intercept rainwater or filter it through the ground, preventing sewer overflows or runoff that pollutes rivers and streams. The department also cites the cost of replacing hundreds of old water mains that break every winter.
But for Ellis and an estimated 60,000 low-income Philadelphia households, the city’s infrastructure needs feel abstract in the face of a daily struggle to keep the lights on and the tap running.
“There are many … people in our community for whom an 11 percent increase would be a real burden,” said Robert Ballenger, an attorney with the nonprofit Community Legal Services of Philadelphia (CLS), at a hearing last month in City Hall.
Ballenger’s organization serves as the public advocate, working to represent water customers’ concerns as the five-member rate board considers the request before the July vote. Experts retained by CLS have submitted detailed testimony critiquing the request, and the organization testified during technical hearings that wrapped up on Friday. As the process moves forward, one question keeps coming up: Why isn’t the water department doing more to help low-income ratepayers who can least afford higher bills?
At issue is the implementation of the department’s Tiered Assistance Program, or TAP. Heralded as a national model for keeping the faucet on for vulnerable families as rates across the country rise in response to aging infrastructure and new environmental demands, the program offers a subsidy for households with income of less than 150 percent of the federal poverty rate. Households who have experienced a special hardship such as recent unemployment or a death can also qualify.
For those enrolled, the department sets monthly bills at 2 to 4 percent of household income, reducing payments to as little as $12 a month. By charging lower-income customers amounts they can pay, the program is intended to reduce bill delinquency, and by some projections, may even prove revenue-neutral. City Council passed the program’s enabling legislation in 2015 with high hopes that it could help keep people from having their water shut off and even prevent blight by lifting economic pressures from at-risk homeowners.
“This becomes potentially the last straw for [a resident] to say, ‘I got to walk out of this house because I’m never going to get out from ‘underwater,’ pardon the pun,” City Councilwoman Maria Quinones-Sanchez told reporter Cassie Owens after the measure passed. “You can destabilize neighborhoods if [collections] is the only thing you’re looking at.”
Quinones-Sanchez said that her North Philadelphia constituents owed 20 percent of water debt citywide despite representing only 10 percent of the population. TAP launched last July, with water department officials projecting 32,000 signups by the end of this June.
As of April, only a quarter of that figure — 8,300 households — were enrolled. Officials say the program should add a few thousand more to reach 11,200 by the end of June. Even if that goal is met, the program will still have delivered fewer than half of the enrollees initially promised and reached only about 20 percent of eligible households.
An untested program
CLS blames TAP’s failure to reach more people on a slow and cumbersome enrollment process. For the first group of residents approved for the program last year, nearly half had to wait two months or longer from the time they applied until they were enrolled, according to an analysis by Roger Colton, a Massachusetts-based utility finance expert who is consulting for CLS. The process appears to have improved since then, but for people applying in early 2018, it still took more than 30 days for successful applicants to get a decision.
And that’s only looking at people who were approved for TAP. Thousands of applicants waited months for a response, only to learn their applications were deemed incomplete, Colton said in his testimony to the rate board. Along the way, they continued to be charged regular rates and in some cases racked up more unpaid bills and penalties.
Colton attributed the problems in part to an “unduly burdensome” TAP application that demands more information than is required by the City Council legislation. The application requests a Social Security number, which not all residents have, and requires people with zero income to list their assets, explain why they have no earnings, and preauthorize a $20 fee for returned checks, among other issues. These requirements lead to more incomplete applications and deter people from applying in the first place, according to Colton. “It has been repeatedly demonstrated in the world of public benefits that the more complicated an application, the lower the rate at which eligible households will seek to enroll in a public benefit program,” he wrote in his testimony.
In addition to simplifying the applications, the water department should contract with community-based organizations that can reach out to eligible ratepayers, build their trust, and help them through the application process, Colton said. Ballenger said that bringing on such organizations could help people like Salima Ellis.
Ellis said she has missed out on help from TAP because earnings from her husband technically make her income too high for her to qualify, though the couple is separated and he doesn’t help with household bills.
“That’s the part that’s really hurting me in the long run,” she said, recounting a recent conversation with a water department customer service agent who told her that her husband’s income made her ineligible. That agent may have misled her; McCarty said TAP applicants like Ellis need only report household members’ income. “If her husband does not live there, then his income would not be counted,” McCarty said. “I would encourage her to apply.”
But Ellis’ confusion reflects a larger problem. Given the complexity of the application, the city may have an obligation to help people apply — if not directly, then by funding the work of community-based organizations, Ballenger said.
McCarty acknowledges that enrollments are well behind projections, but she and other department officials say the delays reflect the program’s innovative design. She said it’s the first subsidy program of its kind in the nation and the city did extensive outreach and research to develop it. The department hired new staff to oversee the initiative and mailed out thousands of letters to potential applicants. “When it’s new, there’s some startup time,” she said. “We do recognize that there are some improvements to be made, and we are working on making those improvements. But this is a complicated system, it’s got databases needing to speak to databases, and a program that manages and collects all the information that we are required by ordinance to collect and report on annually.”
She noted that application assistance is available at Neighborhood Energy Centers operated by the nonprofit Energy Coordinating Agency and from UESF, a nonprofit that promotes housing stability. Other assists may be on the way too. She said the water department is considering whether to stop asking for Social Security numbers on the application, but she defended the questions for applicants who claim zero income. “You have no income but you’re going to pay $12 a month? It just belies logic to me,” McCarty said. “We owe it to the ratepayers that are paying the full bill and subsidizing this program to vet those applying for the affordable rates program.”
Another issue that Ellis and others have brought up is the department’s customer assistance phone line. “When you call them, you’ve got to get up like you’re going to work. As soon as it’s 8:00, you better call,” Ellis said. “But then when you do it, it just rings. They just won’t answer. It’ll say leave a callback number, you leave a callback number, and they don’t call you back.” When you do get through, the staff are not always pleasant to talk to, she said.
McCarty said there were formerly two separate call centers for billing and for water emergencies, which led to confusion and poorly handled calls, but they were recently merged. To address the issue, the department is training staff, monitoring calls and taking other steps to improve wait times they recognize are still too long. The department is planning to adopt new phone software later this year which should lead to improvements in customer service, she said and has taken to using social media to respond to inquiries.
In addition to concerns about TAP and customer service, CLS raised a number of other issues during the rate board hearings. One is the department’s proposal to pay for the fire department’s water use through customer bills rather than through taxes, as is currently done. The city argues that other municipalities roll fire costs into water bills in this way, while the public advocate says it’s unfair to make low-income apartment dwellers and other ratepayers bear the cost of fire services that benefit tourists, out-of-town business owners, and other nonresidents.
Another issue is the Rate Stabilization Fund, a reserve account that has grown to $201 million. McCarty said having larger reserves improves the department’s bond rating, which lowers borrowing costs and benefits ratepayers. She also said the department plans to take $43 million from the fund over the next three years to avoid larger rate increases. However, the public advocate argues that the department has consistently underestimated its revenues and overestimated expenses, leading to unnecessarily high rate hikes. The agency should spend down some of the fund to delay the proposed increase, the advocate said.
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