Increase of 28.5 percent possible in next 4 years

Under a new four-year rate schedule now being considered by the Philadelphia Water Department, water and sewer rates could jump as much as 28.5 percent, or an average $196 annually, by 2016.

Department officials contend the increase is needed to close a deficit estimated to hit $316.2 million during that period.

“We never want to raise rates,” said department spokeswoman Joanne Dahme. “That certainly is a last resort for the department (but) there is always a connection between cost and service.”

Community advocates argued that the rate schedule is unnecessary largely because it’s based on projections that have in the past proven unreliable.

“Four years ago … they projected that by now they would have less than $50 million in their rate stabilization fund, but what they actually have now is $186 million - but they’re coming in already to ask for more than $300 million,” said Thu Tran, an attorney with Community Legal Services who testified at a water department hearing Monday. “It looks like they don’t really need the rate increase yet.”

Tran continued that in this economy a rate increase that wasn’t vital should be delayed.

“In this economy the question is, ‘How much can we really afford?’” she said.

It was the first of five public hearings. The water department is required to hold public hearings before any rate increases can be approved. Ultimately, the decision to increase rates will come from the city’s water commissioner.

Four more hearings are planned over the next several weeks.

If approved, the new rate schedule would boost water bills an average of 6.5 percent a year for the next four years. At the moment the average customer’s monthly water bill is $57.43.

The plan, which is based on the water department’s fiscal year, which starts in October, would increase rates 6.1 percent or about $3.52 for the typical customer this year. That would bring the total monthly bill to $60.95. In fiscal 2014, bills would rise 6.2 percent. That would add, according to water department estimates, $3.76 a month to the average bill bringing it to a total of $64.71.

The increases would get steeper thereafter, rising 6.7 percent in 2015 and 6.9 percent in 2016.

Those jumps would add an average of $4.36 and $4.75 respectively pushing the average bill up to $69.07 and $73.82 in each of those respective years.

Rates for business customers would rise even more – an average of about 6.8 percent over the same period.

According to figures provided at Monday’s hearing, water department expenditures have risen from $588.9 million in fiscal year 2009, to $660.2 million this year, and are expected to hit $782 million by fiscal 2016.

Expenses are expected to rise in five key areas: increased cost in materials and service, which is expected to jump 20.6 percent; increased personnel costs, anticipated to jump 17.6 percent; debt service, projected to jump 17 percent; an 11.5 percent increase in the reserve fund and meeting EPA regulatory requirements, where officials anticipated spending about 10 percent more over the next four years.

The water department last raised its rates in 2009, when bills rose 27 percent over the period from 2009 to 2011, an average of $163 a year.

The hearing schedule is as follows: from 6 to 8 p.m. July 10 at Roxborough Memorial Hospital, Wolcoff Auditorium, 5800 Ridge Ave.; 6 to 8 p.m. July 12 at Holy Family University, Campus Center Conference, Room 115, 9801 Frankford Ave.; 6:30 to 8:30 p.m., July 16 at the YMCA North Philadelphia at Broad and Master streets; 6:30 to 8:30 p.m. July 17, White Rock Baptist Church, 5240 Chestnut St.