Proposed Philadelphia Water Department Rate Increase - Significant Changes Proposed for the Stormwater Management Services Program

March 13, 2012
by JOSEPH M. MANKO, JILL HYMAN KAPLAN, JONATHAN E. RINDE, and MICHAEL C. NINES
MGKF Special Alert

On March 6, 2012, the Philadelphia Water Department (PWD) filed notice with the Department of Records seeking changes for water, sewer and stormwater rates, as well as proposing significant changes to the stormwater credit system. The proposed rate increase is designed to meet a revenue shortfall projected by PWD of approximately $316.2 million over the PWD's FY 2013-2016. If approved, increases are anticipated to take effect in October 2012.

Stormwater charges are proposed to increase by approximately 26 percent over the four year period. In addition to the increase in charges, the amount of available stormwater credits may be significantly reduced depending on the location of the benefiting property. For example, sites previously qualifying for complete gross area and/or impervious area credits will have their maximum credit reduced from 100 percent to 80 percent. In addition, certain dischargers qualifying for credits because the benefitting property directly discharges into a stream, creek, or watercourse other than the Delaware or Schuylkill Rivers will no longer be eligible for direct discharge credits. For those properties directly discharging into the Delaware and Schuylkill Rivers, the PWD proposes to require the implementation of an approved program of nonstructural best management practices (BMPs) to maintain credits. Specific details of approved non-structural BMPs are not available at this time.

Upon approval of the rate increases, the PWD has also indicated that it will immediately implement the proposed changes to properties which have already satisfied existing stormwater credit eligibility criteria. Therefore, those properties which have established a basis for credits and have received a Notice of Disposition covering a four year period, may have their credits immediately changed to reflect any newly approved credit program.

As a next step, the Mayor, President of City Council, and the City Controller will jointly appoint an independent Hearing Officer and Public Advocate to oversee the Rate Proceedings. The PWD has indicated that it will schedule a number of formal and informal public hearings where interested organizations and any of the PWD's customers may comment on the proposed rates. The PWD has indicated that at least five technical hearings and five public input hearings are likely to be held in Spring/Summer of 2012. Those seeking to obtain formal status in the rate-making proceedings should submit a written request for a hearing before the Hearing Officer on or before April 5, 2012.

Complete copies of the FY2013 Rate Filing documents can be found on the PWD's website at http://www.phillywatersheds.org/rates.

For questions concerning the PWD's FY2013-2016 Rate Filings or assistance in submitting a written request for a hearing, please contact Joseph M. Manko (jmanko@mgkflaw.com; 484-430-2310), Jill Hyman Kaplan (jkaplan@mgkflaw.com; 484-430-2315) or Jonathan E. Rinde (jrinde@mgkflaw.com; 484-430-2325).