Council members want to expand subsidies for low-income customers’ water bills

With home water bills rising to pay for upgrades to Philadelphia’s aging water system, City Council will consider legislation that aims to bring relief to low-income homeowners and renters, as well as residents who are hit with huge catch-up bills.

Councilmember Jamie Gauthier announced a package of three measures she calls “Just Water,” and said it has the support of 10 other members, more than enough to ensure its passage.   

“Water is a basic human right, not a luxury, and we are lucky to live in a city where our water system belongs to taxpayers, not corporate interests. As rates climb, Just Water will ensure families do not lose access to clean and affordable water,” she said Thursday.

One bill would expand eligibility for the Tiered Assistance Program, or TAP, which provides participants with a low, set monthly water bill based on their income. Customers with incomes up to 200% of the federal poverty level would be eligible, up from 150% currently, and more people could enter payment plans for overdue bills.

A second measure seeks to guarantee that the Philadelphia Water Department will cover part of the extremely high bills — sometimes up to several thousand of dollars — that some homeowners have received after their water meters are replaced and it turns out they were underpaying for years. The third calls for a hearing on the issue of renters losing water service, or not being eligible for assistance, because bills are in their landlords’ names. 

In the past the city-owned water department has been cautious about expanding TAP, because lost revenue would have to be made up by increasing water rates overall. Water rate experts are working with PWD and the Revenue Department to analyze the impacts, so they can understand what they would mean for the utility’s financial health and for other customers, a spokesperson said. The analysis will be shared with City Council.  

“The Parker administration shares the Councilmember’s goal of providing clean drinking water to all Philadelphians and have implemented some of the most robust protections and programs to make water service affordable,” PWD spokesperson Brian Rademaekers said.

“Given the Water Department’s critical role in protecting public health and the environment, the city-owned utility must be adequately funded. Lacking significant financial support from state or federal sources, revenue from water bills remains the bedrock providing funds for essential infrastructure investment and day-to-day operations — delivering and treating water for the city’s 1.6 million people around the clock,” he said.  

“Skyrocketing” living costs

Gauthier’s proposal, which she said will get a council hearing next year, comes two weeks after elections that saw voters punish Republican candidates over mounting worries about inflation and the rising cost of living, which some blame on the Trump administration.

The measures’ co-sponsors include Councilmember Nicolas O’Rourke, a Working Families Party member who last month offered his own package to control costs for low-income residents. 

He proposed rent rebates, an expansion of SEPTA’s Zero Fare program, and a ban on any future attempt to privatize the water department.

Gauthier’s proposal “was very, very easy to endorse, because it’s another crucial effort to keep life affordable for Philadelphians,” O’Rourke said. “I’m working to ensure the system can’t be privatized, to avoid the steep rate hikes that follow a sell-off. But our public system still requires fair and transparent rate increases, so we need to make sure paying the water bill is manageable when wages aren’t inflating as fast as the price of life’s essentials.”

Water rates increased 9.4% in September, to about $89 a month for the typical household. PWD attributed the increase to rising labor and equipment costs, new federal regulations requiring steps to improve surface and drinking water quality, and the costs of Philadelphia’s 25-year, multibillion-dollar Water Revitalization Plan, which aims to prevent system failures.

Without a rate increase, the water department said it would have to cut back on essential services, including for its wastewater and stormwater collection systems. 

The new raft of proposals comes amid a heated debate at the state and regional levels over rapidly increasing home electricity costs and the impact of power-hungry data centers being built to satisfy demand from the booming artificial intelligence industry. 

PECO bills are rising 10% over the course of two years, due to factors including higher demand, the cost of maintaining and upgrading power distribution infrastructure, closures of coal-fired power plants, and the slow pace at which new renewable energy sources are getting added to the regional power grid.   

“Skyrocketing costs force too many Philadelphians into an impossible dilemma,” Gauthier said. “Keep the lights on, put food on the table, or pay the water bill.”

Reviving “shared responsibility”

TAP, the program targeted for expansion, began in 2017 and has 60,000 participants who pay water bills set at 2% to 3% of their income, Ballenger said. In addition to people who meet the income guidelines, it aids some customers with higher incomes who have suffered a special hardship, like a sudden loss of income or a household member.

The council ordinance would also change the eligibility rule for affordable, past-due payment plans that set payments at 4% of household income. Customers with incomes from 200% to 300% of the federal poverty level would be eligible, up from 150% to 250% currently.

In some years the cost of TAP subsidies increases, creating an added expense for PWD that might have to be made up with higher water rates, while in other years the cost goes down, Ballenger said. A TAP expansion could reduce the number of customers who skip payments, which might help the utility’s bottom line. 

Ballenger said he’d like to see it paired with a boost to conservation programs that help households reduce their water use and thus see lower bills. 

The second measure, meanwhile, attempts to improve the water department’s response to the fallout from its ongoing project to replace meters in homes across the city. 

For some houses, PWD has been unable to gather water use data for years. Radios in the meters failed to transmit the information and the department instead created estimated bills. In some cases, when it finally replaces an old meter, the agency discovers the estimates have been too low and sends the homeowner a huge bill to make up for past underpayments.

“People think that they’ve paid everything they’re supposed to pay, and then their meter gets replaced, and the next thing they know they get a multi-thousand dollar water bill,” Ballenger said. 

“That’s a challenge for any household, obviously. It’s a bigger challenge to low- and moderate-income households, and it represents a real risk to those households for whom, but for their ability to pay, that will become a lien on their property. That will actually deprive them of some of the value of their homes,” he said.

In 2013 the city instituted a “shared responsibility policy” under which the customer had to pay for 12 months of water use and half of the remainder, with PWD picking up the other half, Ballenger said. However, he said the policy has not been applied evenly, and customers only learn about the assistance when they complain.

“It seems like sort of an ad hoc approach. Some people might not be getting any relief, because it’s certainly not something that the city is doing affirmatively,” he said. “The idea is for the city to have an affirmative process to say, now we’re going to deal with these metering issues going forward and consistently addressing customers’ needs with them.”

City lawyers contend that City Council doesn’t have the authority to create a program “that compromises on the future indebtedness” by mandating financial assistance, according to Ballenger. But the legislation would start the process of creating the program, he said.  

Managing landlord-tenant struggles

The third part of Gauthier’s package authorizes council hearings on issues that can arise when water bills are in a landlord’s name instead of a tenant’s. One problem is that TAP and programs like the Utility Emergency Service Fund (UESF) are only available to qualifying households who have their name on the bill.

“You might not be able to get the water bill in your name, because, for one reason or another, your landlord forbids that from happening, or because your landlord isn’t currently licensed,” Ballenger said. “Some low-income tenants who are clients of CLS face that issue, and that means that they are at risk of paying more than they otherwise would.”

In some cases, a landlord will suddenly demand a tenant pay for a large accumulated water bill that isn’t in their name, leading to threats of eviction if they can’t afford it, he said.

“Those are really challenging cases, and quite frankly, displacement over a water bill is something that we should be able to resolve,” he said. “So the idea is to start having some conversations to look for the best policy solutions to prevent that displacement from happening, because it is happening.”

Gauthier cited a West Philadelphia renter who lost water service because his landlord stopped paying the bill. The city told him he would have to pay $3,000 to have service restored, and later refused to turn the water back on because the landlord didn’t have a rental license, the councilmember said.

“It isn’t fair that I have to suffer because my landlord isn’t paying the bill,” the man said, according to Gauthier’s office. “I’ll provide any information that they need to turn the water back on.”

Possible solutions include coming up with ways for tenants to become official customers or making them eligible for TAP assistance even if their names aren’t on bills, Ballenger said. Another idea that had helped in the past is doubling the value of subsidies from UESF and other assistance funds, so that $1 in aid provides $2 in debt relief.

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