Committee Hearing, February 8, 2011

COUNCIL OF THE CITY OF PHILADELPHIA2 COMMITTEE ON TRANSPORTATION AND3 PUBLIC UTILITIES4 5 6 Room 400, City Hall7 Philadelphia, Pennsylvania Tuesday, February 8, 20118 11:10 a.m. 9 10 PRESENT: COUNCILMAN CURTIS JONES, JR., CHAIR11 COUNCILWOMAN JANNIE BLACKWELL COUNCILMAN WILLIAM K. GREENLEE12 COUNCILMAN JACK KELLY COUNCILMAN BRIAN J. O'NEILL13 COUNCILMAN FRANK RIZZO, JR. 14 15 RESOLUTION 100814 - Resolution authorizing the Committee on Transportation and Public16 Utilities to hold a public hearing to examine the impact, circumstances, and possible17 solutions to problems regarding the Philadelphia Water Department's implementation18 of new stormwater run-off fees on independent business owners.19 20 - - -21 22 23 24 25 2 1

Good2 morning. This is the Committee of3 Transportation and Public Utilities. We4 are now opening a public hearing on5 Resolution No. 100814.6 Would the Clerk read the7 purpose of the resolution.8

Resolution 100814,9 authorizing the Committee on10 Transportation and Public Utilities to11 hold a public hearing to examine the12 impact, circumstances, and possible13 solutions to problems regarding the14 Philadelphia Water Department's15 implementation of new stormwater run-off16 fees on independent business owners.17

Before we18 begin, I'd like to acknowledge my19 colleague Councilman Frank Rizzo. He has20 a statement he'd like to read in.21

Thank you.22 Good morning, everyone.23 Good morning, Councilman Jones24 and members of the Committee on25 3 2/8/11 - TRANSPORTATION - RES. 1008141 Transportation and Public Utilities. And2 we'd like to welcome our new Water3 Commissioner -- congratulations,4 Commissioner Neukrug -- and members of5 the Administration and all those in6 attendance. Thank you for being here7 today.8 The resolution that I9 introduced at City Council that called10 for today's hearings was a response to11 information I received from members of12 the recently established Unified Business13 Owners Association of Philadelphia that14 many of their businesses are being15 significantly financially impacted by the16 increase in stormwater management fees.17 We know the following to be18 true: For much-needed protection of the19 environment and to comply with both20 federal and state regulations, stormwater21 must be properly managed, and there is an22 unavoidable cost associated with such23 management, but the changes in assessing24 those costs to customers in some cases25 4 2/8/11 - TRANSPORTATION - RES. 1008141 resulted in drastic increases, dramatic2 increases in stormwater charges.3 Today's hearing provides the4 opportunity for those individuals who5 have spent many years successfully6 operating their long-established7 businesses in our city to share with8 members of City Council their concerns.9 The Committee will also be provided with10 background from the Philadelphia Water11 Department, PIDC and the12 environmentalists on this issue of13 critical importance.14 And, again, Councilman Jones15 and members of your Committee, thank you16 very much for taking this very important17 issue up today.18

Thank you,19 Councilman Rizzo.20 Also on the Committee I have21 serving today Councilman Greenlee and22 Councilman Kelly.23 Will the Clerk read the first24 panel.25 5 2/8/11 - TRANSPORTATION - RES. 1008141

Howard Neukrug, Sam2 Rhoads, Paul Lonie.3 Paul Lonie is not here.4 (Witnesses earlier approached5 witness table.)6 COUNCILMAN JONES:7 Commissioner, good morning.8 COMMISSIONER NEUKRUG: Good9 morning.10

Welcome to11 your new position, and please begin your12 testimony. State your name for the13 record.14 COMMISSIONER NEUKRUG: My name15 is Howard Neukrug, Water Commissioner.16 Good morning, Councilman Jones17 and members of the Transportation and18 Public Utilities Committee, and thank you19 to Councilman Rizzo for requesting this20 public hearing on this very critical21 issue.22 While we all like to talk about23 the weather, the topic of stormwater24 management or, as I prefer to call it,25 6 2/8/11 - TRANSPORTATION - RES. 1008141 rainwater management is not a topic2 typical of either parties or of Council3 Chambers, and the rain's impact on our4 utility costs and how we restructure the5 recovery of those costs is an extremely6 complex subject.7

9 You can choose to take the salient parts,10 that we might want to abbreviate. 13 Well, my testimony will cover14 three general topics. 21 Concerning the first topic, the22 extraordinary costs of stormwater23 management, these costs have risen24 significantly over the past decades. In25 7 2/8/11 - TRANSPORTATION - RES. 1008141 the past, before environmental2 regulations were in place, the goal was3 to move stormwater away as quickly as4 possible, without any significant concern5 for pollution or the degradation of our6 waterways. Costs for these services were7 nominal and were easily embedded into the8 fixed fees charged for water service. We9 adjusted the costs among homes and10 businesses based on the size of the water11 meter. This was standard industry12 practice at the time and accepted as the13 most reasonable approach for stormwater14 cost recovery. 23 Today, the new Clean Water Act24 regulatory requirements has increased the25 8 2/8/11 - TRANSPORTATION - RES. 1008141 service-level expectations for our2 customers with many new programs, and3 indeed this comes out to about $1204 million a year for our stormwater5 utility. These costs are for expansion6 of sewer and wastewater treatment plant7 capacity, basement and street flood8 management, sewer surcharges and9 overflows management, stream and river10 water quality enhancements, defective11 lateral removal programs, education,12 training and outreach, and upgraded13 system maintenance and renewal. 20 Beginning in the 1980s as21 stormwater costs began to rise, many of22 our large business customers complained23 of overcharging since we were charging24 them based on size of their water meter,25 9 2/8/11 - TRANSPORTATION - RES. 1008141 not on the amount of stormwater they2 discharged to our sewer system. In the3 1990s, the Stormwater Citizens Advisory4 Council was formed to seek out5 fundamental corrections to these6 inequities. 13 Transitioning the meter-based14 system to this parcel-based system15 involved many stakeholders and16 consultants, detailed investigations of17 best practices in other cities, and the18 identification of available accounting19 and mapping tools. The new system was20 first implemented for our residential21 customers in 2002 and, at the continuing22 urging of many large commercial23 customers, was implemented for24 non-residential customers through a25 10 2/8/11 - TRANSPORTATION - RES. 16 Well, first, we've been using17 notification of our customers through the18 formalized rate hearing process, followed19 in February 2010 with mailed20 notifications and a series of public21 meetings attended by over a thousand22 customers, as well as visits to all City23 Council offices and other various24 organizations. These activities continue25 11 2/8/11 - TRANSPORTATION - RES. 24 Seventh, we've partnered with25 12 2/8/11 - TRANSPORTATION - RES. 12 So in closing, where do we go13 from here? Well, first, we are very14 determined to become ever more proactive15 when it comes to customer communications16 and care and working with City Council17 and other stakeholders to move forward18 with building upon our customer19 assistance programs. 25 13 2/8/11 - TRANSPORTATION - RES. 19 Finally, to our all-important20 residential customers, we are working21 with our public advocate partners -22 Community Legal Services, Penn Future and23 Pennsylvania Environmental Council - to24 explore cost-effective, aesthetically25 14 2/8/11 - TRANSPORTATION - RES. 21

Okay. We'll22 reserve our questions, unless our members23 of the Committee would like to make a24 statement. We'll hear all testimony25 15 2/8/11 - TRANSPORTATION - RES. 1008141 before we start questioning.2 State your name for the record.3

Good morning,4 Mr. Chairman and members of the5 Committee. My name is Sam Rhoads. I'm6 Senior Vice-President of the Philadelphia7 Industrial Development Corporation. I'm8 here to testify today with respect to an9 innovative new financing program to10 finance stormwater management11 infrastructure, and I'm joined here by my12 colleague Jenny Crowther, who worked to13 develop this innovative new program.14 PIDC understands that many15 businessowners are seeing significant16 increases in the costs of their17 stormwater services and that this18 negatively impacts their ability to19 continue conducting business in20 Philadelphia. During these challenging21 economic times, many businessowners may22 find it difficult to absorb the increased23 costs associated with stormwater24 services.25 16 2/8/11 - TRANSPORTATION - RES. 1008141 In response, PIDC and the2 Philadelphia Water Department have3 partnered together to develop a4 low-interest loan program, the Stormwater5 Management Incentives Program, to provide6 impacted customers with the funding7 needed to implement stormwater mitigation8 measures. The PWD has allocated 59 million to this program.10 The Stormwater Management11 Incentives Program, also called SMIP, is12 available for any non-residential13 customer for the design and construction14 of a broad range of stormwater management15 practices. Loan sizes will range from16 $75,000 up to a million.17 The SMIP loans are available18 with very favorable terms, including a19 one percent interest rate. In addition,20 PIDC will not take out a lien against the21 property and will not charge the borrower22 any application or origination fees.23 The SMIP applications are24 available on the Water Department's25 17 2/8/11 - TRANSPORTATION - RES. 1008141 website at2 phila.gov/water/stormwater_where.html.3 And I have outlines of the program here4 which, if you'd like, are available to5 the Councilpeople as well as to the6 audience.7 The applications are also8 available by calling PIDC at9 215-496-8139. The Water Department will10 review the technical merit of all11 applications, and PIDC will review the12 credit of the applicant.13 I strongly urge all interested14 businessowners and non-profits to contact15 PIDC and to submit an application.16 Thank you for this opportunity17 to testify. I'd be happy to answer any18 questions when you're ready.19

Thank you20 for your testimony.21 Our next witness, please state22 your name for the record.23

My name is Paul24 Lonie. I'm the President of25 18 2/8/11 - TRANSPORTATION - RES. 1008141 AquaEconomics. It's a private enterprise2 at 1301 North 2nd Street in Philadelphia,3 Pennsylvania, and I'm here to give4 testimony on the private sector.5 As many of you know, I spent6 30-some years working for the City, and7 we've partnered with some former City8 employees to form a new company that9 basically is designed to do stormwater10 management in a design-build area that's11 economic for these people that are having12 difficulties doing this.13 What we've decided to do is to14 take a new approach to this outside of15 the usual way of having an engineer come16 in and do a lot of different things.17 We're a combination of different18 companies. Rodriguez Consulting is a19 small engineering company that does a lot20 of the engineering. Lou had worked for21 the Water Department for 18 years and is22 very familiar with the process over23 there. I deal with the surveying as part24 of that orientation, as with the 30 years25 19 2/8/11 - TRANSPORTATION - RES. 1008141 I was with the City of Philadelphia. And2 we've teamed with Bustleton Services,3 which is John Parsons, who is one of the4 major union construction companies and5 landscape companies in the City. And6 what we've been doing is designing a7 program where we'll come along and also8 help with Sam's program with PIDC to come9 in and work with a person on a one-stop,10 one-shop basis. We'll take them all the11 way through the process. As people know,12 the process doesn't really kick in if13 you're doing retrofitting until the14 things have already been installed and15 inspected. So we take everything right16 through the process for all these people.17 We have all the engineers, all the18 surveyors, all the landscape folks to19 help them with this, and we have20 maintenance coming that will do the21 maintenance of this afterwards.22 It's something in Philadelphia23 that's been needed, and since this has24 come into effect, it's a business that's25 20 2/8/11 - TRANSPORTATION - RES. 1008141 growing like crazy and we're actually2 trying to just help everybody as much as3 we can.4 So thank you for this time to5 testify, and I'd be glad to also answer6 any questions.7

Thank you.8 I defer to members of the Committee.9 Councilman Greenlee.10

Thank11 you, Mr. Chairman.12 Good morning, gentlemen.13 Commissioner, I don't know if14 you can answer this or maybe somebody15 else from your department. What I guess16 I'm trying to get clear on -- and I know17 the department did a lot of outreach18 before the bills went out. I guess what19 I'm trying to determine is particularly20 the people who had significantly high21 bills, how soon before they actually had22 to start paying them did they have an23 idea about how high they were? Am I24 making sense?25 21 2/8/11 - TRANSPORTATION - RES. 1008141 COMMISSIONER NEUKRUG: Yes.2 And we had a process that obviously3 started, as my testimony, in the 1980s4 and 1990s. But you are correct, that it5 was in February 2010 when the bills first6 went out that had the costs associated7 with the first July 1st, 2010 bill. So8 February 2010 and July 1st, 2010. Again,9 there was a phased-in approach so that10 even those most impacted were only11 impacted by 25 percent of that total12 bill. So, in essence, we are kind of13 still in that period of notification.14

Sort of15 phasing in?16 COMMISSIONER NEUKRUG: Phasing17 in.18

But when19 they got that first notice on February20 2010, their bill -- some people's bill21 anyway, particularly businessowners --22 went up rather significantly, right?23 COMMISSIONER NEUKRUG: Yes.24 There is -- and "significant" means25 22 2/8/11 - TRANSPORTATION - RES. 1008141 different things to different people.2

No, I3 understand.4 COMMISSIONER NEUKRUG: But in5 any sense, yes, there are quite a number6 of clearly frustrated customers who we7 are now in the process of trying to8 assist.9

And I10 know hindsight is 20/20 and all that good11 stuff, but just looking back -- and I12 know you weren't the Commissioner, but I13 wonder if there should have been a way to14 try to tell people maybe in six months,15 this is what's going to happen or16 something like that, so they're a little17 bit more prepared, particularly those18 people like -- maybe the regular bill19 didn't go up that much, so it's not that20 big a deal to people, but for folks that21 went up hundreds or whatever, it seems22 like that just hitting them one time --23 and I know Commissioner Brunwasser came24 around and explained to me and explained25 23 2/8/11 - TRANSPORTATION - RES. 1008141 to all the Councilmembers, but, you know,2 it wasn't real numbers, if you know what3 I mean. I think when you get real4 numbers, it has a little bit more of an5 impact.6 COMMISSIONER NEUKRUG: It's7 always best to give the most time and8 it's always best to work with every9 customer and make sure that they fully10 understand what is coming down. I11 believe that having worked behind the12 scenes at the Water Department for any13 number of years on this issue that the14 Water Department did everything that it15 humanly could within our organization to16 reach out to all our customers and let17 them know that this was happening.18 But having said that, that19 doesn't mean that people who have not in20 February 2010 seen or read their bills21 and understood that this was coming, that22 they certainly felt like they didn't get23 their six-month warning.24

I guess25 24 2/8/11 - TRANSPORTATION - RES. 1008141 that's the thing. I shouldn't say you2 talked in the abstract, but you certainly3 didn't have specific numbers, right,4 until February 2010?5 COMMISSIONER NEUKRUG: Until6 February 2010.7

Okay. I8 guess that's the biggest -- and I9 understand why you have to do this and10 all like that. That seemed to be the11 one --12 COMMISSIONER NEUKRUG: I am13 being corrected.14

Pardon15 me?16 COMMISSIONER NEUKRUG: I am17 being corrected from the audience.18

Mr. Lonie19 knows a little bit better.20 COMMISSIONER NEUKRUG: We did21 do notification with numbers beginning in22 2009.23

With24 specific numbers? With specific numbers?25 25 2/8/11 - TRANSPORTATION - RES. 1008141 COMMISSIONER NEUKRUG: Can I2 ask Joanne Dahme to come up? Joanne3 Dahme is the Public Affairs Manager for4 Philadelphia Water Department.5 (Witness approached witness6 table.)7

Hi. Thank you.8

State your9 name for the record, please.10

Joanne Dahme,11 Philadelphia Water Department, Public12 Affairs Manager.13 Certainly I think we're not14 disputing that we can always do a better15 job, and it's always a challenge getting16 customers to pay attention to something,17 particularly when it's not in place yet.18 Recognizing that we were looking to do19 this phase-in before our last rate case,20 we did start reaching out to what we saw21 then as the top impacted customers,22 people who were going to see their bills23 go up, back in 2009. And what we were24 doing at that point was giving them sort25 26 2/8/11 - TRANSPORTATION - RES. 1008141 of an estimated what we saw the rates2 might be over the next four years.3 We had -- what our goal was, to4 say this was going to be possibly5 happening, because the rate case was6 currently ongoing, 2008, 2009. We were7 offering to have workshops for these8 impacted commercial customers to come in9 to learn a little bit about what was10 going on, to really have an opportunity11 to explain to them what we expected to12 happen.13 We did have many of these14 commercial customers come to some15 workshops. So that was sort of the first16 round. The round Howard mentioned back17 in February 2010 when we knew this was18 going to be a reality, that there was19 going to be phase-in beginning in July,20 every customer did get a notification21 about what we saw their rates, their22 stormwater fees, being over the next four23 years. So they saw what was going to24 happen July 1st.25 27 2/8/11 - TRANSPORTATION - RES. 1008141

So they2 got real numbers, just so I'm clear?3

They did get real4 numbers, yeah, to show the full phase-in.5 It's being phased in over a four-year6 period.7 But, again, I think it's --8 those notices went out in February, and9 we tried to make them look very different10 from your typical water/sewer bill. It11 was in an eight and a half by -- or it12 was an envelope, which had "important13 information about your stormwater bill"14 on the front, but I think, again, what15 we're hearing from a lot of these16 commercial customers is, they're not the17 ones receiving these bills. The person18 getting them really doesn't understand19 them.20 But as a result of that21 February notification, we did have ten22 public workshops, and those were attended23 by over 1,000 commercial customers. So24 some people did see that. They did come.25 28 2/8/11 - TRANSPORTATION - RES. 1008141 Lots of concerns, lots of questions, but2 we did get the information out there as3 best as we could. Not to say that4 there's probably many other ways, and5 we'll probably hear from some of the6 commercial customers about other ways to7 do that.8

I'm not9 even trying to be critical. I'm just10 trying to get a clear picture of timing11 and when they really got a real like12 picture or real numbers about what they13 gave, even if it wasn't exactly specific,14 like it's going to be this, around this15 much.16

Right. No. They17 were fairly accurate enough to get people18 to come out to the meetings to ask us19 questions about it.20

I'm21 seeing some heads shake behind you, so22 there'll probably be some other testimony23 that will say something different, but24 that's okay.25 29 2/8/11 - TRANSPORTATION - RES. 1008141 All right. Thank you.2 Thank you, Mr. Chairman.3

Thank you,4 Councilman Greenlee.5 I have a couple questions.6 Number one, first is a statement. I7 clearly understand what we are struggling8 with here as a city and two converging9 interests kind of coming at each other.10 Number one, when we did the hearings on11 Marcellus Shale and the amount of brine12 that might come down through our13 waterways, one of the mining industry's14 counterpoints was that we get more brine15 and contaminants on rainwater runoff on16 an average snow event. And that was one17 of their arguments.18 So I understand the purpose of19 this is to try to change behavior to be20 more conscious of the rainwater runoff.21 So I get that part. What I need to be22 more clear -- and I also know that we are23 just now beginning to see the light at24 the end of the tunnel of a recession, and25 30 2/8/11 - TRANSPORTATION - RES. 1008141 that a lot of these businesses are on2 margins that are slim and some on margins3 that are none, and so, therefore, these4 new fees coming on are hitting them right5 at the time when they're trying to get6 some relief. So I understand what the7 polar opposites of this important aspect8 are.9 So what we're trying to do is10 get some clarity, and what we're trying11 to do is get some options here.12 A couple of questions that I13 have. You say revenue neutral, that this14 is going to be revenue neutral. You mean15 revenue neutral to the City or to the16 people who actually have to pay the tax17 or the fee?18 COMMISSIONER NEUKRUG: This is19 certainly not revenue neutral to an20 individual landowner. This is revenue21 neutral to the City. So last year we22 needed to recover $120 million or so for23 the stormwater utility, and next year we24 need to recover that $120 million. So25 31 2/8/11 - TRANSPORTATION - RES. 1008141 the question is, what is the most2 equitable way of having all the customers3 of the City of Philadelphia share in4 that, residential and non-residential,5 and within the non-residential class,6 take a look and see.7

So help me8 to understand the non-residential equity9 of this fee that we're applying to10 Philadelphia-based businesses. Help me11 how we're addressing that disparity.12 COMMISSIONER NEUKRUG: Well, in13 the past, the way that we charged was14 based upon the size of the water meter.15 The larger your water meter, the more16 potable water you used on your property,17 the more you paid your portion of the18 stormwater fee. So there were many19 customers who had large water meters,20 maybe even two large water meters, who21 had a very small footprint and they were22 paying the biggest share of the23 stormwater fee system, and they're the24 ones who clearly were unhappy, that they25 32 2/8/11 - TRANSPORTATION - RES. 1008141 felt there was an inequitable process.2 We brought together an Advisory3 Committee to look this over, and the4 Advisory Committee of all different sorts5 within the City of Philadelphia came to6 the same conclusion, that it wasn't an7 equitable process, and a more equitable8 way of charging for stormwater is based9 upon a true cost of service. So the more10 stormwater your property delivers to the11 sewer system of the City of Philadelphia,12 the more you should have to pay for that13 service.14

I'm still --15 I'm a little dense here. The Water16 Department is the smart department, so17 you'll have to dumb it down for me. But18 Crown Plaza is on City Avenue in19 Philadelphia in my district. It is maybe20 12 stories high, maybe, and they're21 straight up. Across the street is a22 plaza/shopping center that is flat. How23 do you determine the rates of that?24 COMMISSIONER NEUKRUG: You're25 33 2/8/11 - TRANSPORTATION - RES. 1008141 looking at the gross area, the acreage of2 land.3

So if4 they're going straight up, how do you5 determine that?6 COMMISSIONER NEUKRUG: Well,7 straight up doesn't matter. It matters8 whether it's impervious or pervious,9 whether it's allowing rainwater to soak10 into the ground or store it or retained11 on the site.12

So is a13 skyscraper --14 COMMISSIONER NEUKRUG: So a15 skyscraper and a parking lot that have16 the same acreage would have the same17 stormwater charge.18

And that19 makes sense?20 COMMISSIONER NEUKRUG: Yes.21

To who?22 (Applause.)23

Like I said,24 I'm not the smartest guy ever, but that25 34 2/8/11 - TRANSPORTATION - RES. 1008141 to me does not make sense, and I don't2 know how we factored that in.3 The second thing that I would4 ask is --5 COMMISSIONER NEUKRUG: I --6

So if you're7 both two skyscrapers, one in the City of8 Philadelphia, one outside, do you pay the9 same rate? So if the hotel moved across10 the street, what would it pay, Crown11 Plaza, what would it pay differently12 being a non-City resident?13 COMMISSIONER NEUKRUG: I'd have14 to get back to you to find out what kind15 of system of rates and taxes they have in16 Montgomery County.17

So based on18 your fees, however, if Crown Plaza moved19 exactly across the street, they would not20 have to pay this fee?21 COMMISSIONER NEUKRUG: If they22 were not in the City of Philadelphia, no.23 But they would still -- but everyone pays24 for stormwater management, everyone --25 35 2/8/11 - TRANSPORTATION - RES. 1008141

But they use2 our water system, both the supply side3 and the sewage side, right? Yes?4 COMMISSIONER NEUKRUG: Not the5 stormwater.6

So the7 stormwater process --8 COMMISSIONER NEUKRUG:9 Stormwater is a separate system and --10 everyone in the United States pays for11 stormwater. It's sometimes embedded or12 hidden.13

So we don't14 process their water? We supply their15 water, but the runoff goes where?16 COMMISSIONER NEUKRUG: Runoff17 goes to --18

Their19 system?20 COMMISSIONER NEUKRUG: Their21 system, their separate stormwater system.22

Okay.23 That's some clarity. You got that one.24 All right. By way of green25 36 2/8/11 - TRANSPORTATION - RES. 1008141 programs -- no. The fees in phasing them2 in, you said that it's a four-year3 process?4 COMMISSIONER NEUKRUG: That's5 correct.6

So what did7 the -- in February, what did the8 businesses, what portion of the bill did9 they get?10 COMMISSIONER NEUKRUG: They --11

One-fourth12 of it?13 COMMISSIONER NEUKRUG: They saw14 what it would be, I belive, over the15 entire four years. So they saw the16 phase-in of four years. It was explained17 to them that we phased in over four years18 and one-quarter of the total bill as of19 four years hence was what would be20 charged to them beginning July 1st.21

So if it was22 $100, they had to pay this year 25?23 COMMISSIONER NEUKRUG: That's24 correct.25 37 2/8/11 - TRANSPORTATION - RES. 1008141

So over the2 four years, gradually they'll pay the3 entire 100?4 COMMISSIONER NEUKRUG:5 Gradually they'll be paying more.6

All right.7 And what does that represent by way of an8 average increase to business on their9 fees?10 COMMISSIONER NEUKRUG: Can you11 repeat that?12

This new fee13 on top of their old water bill, what14 percentage increase on average would that15 represent based on your --16 COMMISSIONER NEUKRUG: Well,17 some would see an increase and some would18 see a decrease.19

On average.20 COMMISSIONER NEUKRUG: Because21 it was -- on average, over the City I22 would say it was cost neutral.23 Is there a better answer than24 that?25 38 2/8/11 - TRANSPORTATION - RES. 1008141

Sixty-five percent,2 I'd say.3 Joanne again.4 I'm just going to -- as Howard5 is talking, the kind of information we6 sent -- and I think it gets back to your7 question -- they received a fact sheet,8 which had a photograph of their property,9 so taking an aerial photograph. So they10 got to see what we were charging them11 for, how big their property is and then12 how many hard surfaces, manmade surfaces,13 were on that property, which is really14 the runoff co-efficient, which really15 counts for how much is being impacted or16 contributed to our system. And so with17 that, they had sort of the four-year18 phase-in.19 When we look at our customers20 overall, it's hard to say what percent21 increase per customer, because it's kind22 of by property type. When you think23 about properties that are large and have24 a lot of hard surfaces, like parking25 39 2/8/11 - TRANSPORTATION - RES. 1008141 lots, like buildings, and they had small2 meters or no meters at the property, like3 a parking lot, it would be a big percent4 increase for them, because they were sort5 of underpaying based on their meter size,6 not because they wanted to underpay but7 because the meter size was having them8 underpay and other people were9 subsidizing that.10 A similar property -- as Howard11 was saying, there were a lot of winners.12 Properties that were like your Crown13 Plaza might have a large meter, because14 it has to get water pressure to the top15 floor, might have two meters, they were16 paying a lot of money, so they saw their17 new stormwater fees go down18 significantly, because they were sort of19 overpaying all those years when it was20 based on the meter size. But when we21 look at our customers overall, we have --22 about 60 percent of our customers are23 seeing either no change, a real small24 change or a change within $500 of25 40 2/8/11 - TRANSPORTATION - RES. 1008141 increase over the year. So you do have2 then on both sides of the spectrum some3 customers who are being severely4 impacted, seeing a large increase -- and5 probably a lot of the customers in this6 room -- and then on the other side, you7 have a lot of customers who are seeing8 their fees go down significantly.9

I appreciate10 your guesstimate, but do you have actual11 figures that you can provide this12 Committee?13

Yeah, we can14 certainly provide some information.15

And that's16 an ask, that we would have a view.17 One other thing while you're up18 here. You are talking about a loan19 program and it's $5 million. Can you20 give me the terms and how much the21 amounts are?22

I'm going to let23 the loan expert talk about that.24

And this25 41 2/8/11 - TRANSPORTATION - RES. 1008141 loan is designed to do what again?2

This loan program3 was developed together with, in4 partnership with the Water Department.5 They capitalized it in the total amount6 of $5 million. It's designed to provide7 financing, low-cost financing, to8 companies or businesses that are seeing9 an increase in their bills and want to10 implement or put in stormwater management11 infrastructure, such as green roofs,12 detention basins, porous parking lots --13

What is the14 average retention basin, how much does it15 cost? Average.16

It's really hard to17 say average-wise, because it's based on18 how much of the square footage we're19 looking to really manage. But taking a20 look at some of the recent estimates, for21 four acres we had a detention basin that22 was costing about $200,000 in order to23 manage.24

So $200,000?25 42 2/8/11 - TRANSPORTATION - RES. 1008141

And that's just2 rough, for four acres of management,3 which might be about 80 cents per square4 foot.5 So the practices aren't6 inexpensive certainly, and that's why we7 were looking at the loan program.8

Do you think9 that that loan program is slightly10 inadequate to address all of the -- if11 everybody in this Chamber just wanted a12 loan to address that, that loan fund13 would be exhausted.14 What are the terms of15 repayment, how long?16

The terms of17 repayment are one percent and can go up18 as long as 15 years depending on that19 nature.20

So that21 could be exhausted today in this Chamber22 if we actually took advantage of that,23 correct?24

I would say two25 43 2/8/11 - TRANSPORTATION - RES. 1008141 things. One is that it is a revolving2 loan fund, so to the extent that loans3 are repaid, we will put them back out4 again.5

But over 156 years -- I was in the lending business7 for a while. So that could go today. So8 that's not a lot of money dealing with9 the number of clients that will be10 affected by this. That's number one.11 And when you talk about remediation of12 rainwater runoff, what are your cafeteria13 selections? What can a company do, and14 is it common knowledge that they know?15 Instead of paying this, you can put in16 rain barrels, you can put on green roofs.17 Is there a list of options? And I heard18 one company that does it, but how many19 companies are there that we've expanded20 the universe to?21 COMMISSIONER NEUKRUG: There is22 a list of options that are available and23 it's available on --24

Give me some25 44 2/8/11 - TRANSPORTATION - RES. 1008141 of those.2 COMMISSIONER NEUKRUG: You can3 go as simple as a suburban-style4 detention basin to a green roof to a5 bioswale.6

So consider7 a detention basin. How do you calculate8 what it does to their fee?9 COMMISSIONER NEUKRUG: We take10 a look and see how much water is stored.11 We're looking to capture the first inch12 of runoff, very similar to the stormwater13 regulations for new development. In14 fact, if you have a new building that's15 been developed, it will get the full16 credit from the stormwater fee. So we17 have some engineering calculations that18 are done that assesses the before and19 after costs of a treatment technology.20 We have --21

So if22 someone doesn't want to put in a $200,00023 bio-retention basin, they can do what24 other cost-effective things?25 45 2/8/11 - TRANSPORTATION - RES. 1008141 COMMISSIONER NEUKRUG: It2 depends. It's very site specific, and we3 have an engineering consulting firm that4 will come out and give support to the5 property owner to identify what the most6 effective techniques are for that7 property. If it's a large parking lot8 that has sheet flow running to the edge9 of the property, then perhaps a bioswale,10 otherwise known as a ditch with plants,11 along the edge may be sufficient. It may12 be if it's a parking lot that all comes13 to one center drain, it's perhaps maybe a14 more structural piece where you're just15 making a bigger vault to hold the16 stormwater back.17 So there are a number of18 different technologies that are19 available. They're all very simple in20 thought, because they're all about just21 holding water and draining water and22 infiltrating water. So they do exist,23 but the costs can be high. They're very24 site specific. They won't work at every25 46 2/8/11 - TRANSPORTATION - RES. 1008141 site.2

And the cost3 to retrofit this is higher even than to4 design it into a new construction or a5 new project?6 COMMISSIONER NEUKRUG:7 Certainly. It's always more expensive to8 retrofit than it is to build into a new9 facility.10

My final11 question is, what other cities do this?12 COMMISSIONER NEUKRUG: You're13 seeing this happening in most cities14 throughout the United States. They're15 all looking at this whole issue of16 stormwater.17

Does New18 York do it now, today?19

They're moving to20 it.21 COMMISSIONER NEUKRUG: They're22 moving towards it.23

The question24 is, today does New York implement this?25 47 2/8/11 - TRANSPORTATION - RES. 1008141

Not on a parcel2 base.3

Does Boston?4 COMMISSIONER NEUKRUG: Well, if5 I can just -- and I know you don't want6 me to change your question a little bit,7 but does it cost money for the City of8 New York to manage stormwater? Most9 definitely. Does the City of New York10 residents pay for that and businesses pay11 for that? Most definitely. The manner12 in which they pay for it differs from13 city to city.14

All right.15 I appreciate your question. Now I'm16 going to try mine again.17 Today, does New York do it?18 Yes or no?19 COMMISSIONER NEUKRUG: I do not20 know the practices --21

You know the22 answer. Come on, it's okay.23 Do they have this fee?24

The question is,25 48 2/8/11 - TRANSPORTATION - RES. 1008141 are they doing parcel-based billing2 today? No. They're developing a system3 very similar to ours.4

Does5 Washington --6

We can give you7 cities that do -- oh, yes.8

The answer9 is no.10 Does Washington have it?11

Yes, they do.12

They do have13 it?14

DC has done this,15 yes. They're doing it.16

They are17 doing it today?18

They've been doing19 it, yes.20

Okay.21 Boston?22

Moving towards it.23 Not today.24

Not today.25 49 2/8/11 - TRANSPORTATION - RES. 1008141 All right. So of the comparable cities,2 does LA do it?3

Yes.4

They do?5

They do.6

All right.7 So can you provide us a list of the top8 cities, top ten cities, and whether they9 have it today or not? And not that we10 can't be cutting edge. Philly can be at11 the head of things, and I don't have a12 problem. I just need to know how they13 are dealing with it and how they're14 phasing it into the cost of doing15 business in their city, and we can learn16 from them by what impact it has had on17 small businesses.18

Certainly.19

That's my20 intention.21 All right. Do you have any22 other questions? Councilman.23

Thank you,24 Mr. Chairman.25 50 2/8/11 - TRANSPORTATION - RES. 1008141 Commissioner, I just want to2 know, what businessowners were involved3 for determining the process and4 methodology for the stormwater fee5 system?6 COMMISSIONER NEUKRUG: I'm7 going to ask Joanne to answer that one.8

This is going back9 to when we had the stormwater CAC --10

Well, how11 many of the large corporations? One of12 the largest manufacturers in Philadelphia13 is Cardone Industries.14

Right.15

We have16 Sandmeyer Steel. You have a lot of large17 still, believe it or not, in this city,18 we still have some manufacturers in this19 city.20

At the time -- the21 list of the CAC members -- I'm thinking22 industrial customers -- included Allied23 Signal, Rohm and Haas. We had Van24 Sciver, the furniture company. They were25 51 2/8/11 - TRANSPORTATION - RES. 1008141 probably some of the largest customers.2 The Citizens Advisory Committee when we3 put it together in the '90s, the real4 goal of that had the diversity of5 stakeholders. So it also had --6

Were these7 corporations invited to participate?8

They were, yes.9

They were10 all invited?11

One of the goals12 was to make sure we had a diversity of13 stakeholders, because at the point when14 we were working on this, we didn't know15 quite what this parcel-based billing was16 going to look like and how it was going17 to impact a large variety of customers.18 So we had small businesses, we had large19 businesses, we had universities, we had20 hospitals, we had utility companies, we21 had transportation companies, and we had22 citizens and civic associations, because23 we wanted everyone at the table at that24 time. And we did have a representative25 52 2/8/11 - TRANSPORTATION - RES. 1008141 of City Council, technical advisor.2

I just want3 to go back to revenue neutral here. When4 you say it's revenue neutral, these fees,5 the subsequent fees that you're6 requesting, they would more than cover7 the cost, is that true, for --8 COMMISSIONER NEUKRUG: Yes. We9 need to cover our costs for a stormwater10 utility.11

And suppose12 you receive -- if the fees come in well13 above that, would you be willing to cut14 back or would you continue to spend and15 spend and spend?16 COMMISSIONER NEUKRUG: We go17 through a rate process approximately18 every four years, at which time these19 numbers would be reviewed and adjusted.20

Well, that's21 four years, in other words. Is that what22 you're saying?23 COMMISSIONER NEUKRUG: In a24 four-year -- well, not four years from25 53 2/8/11 - TRANSPORTATION - RES. 1008141 now, but --2

This is a3 four-year plan; is that true?4 COMMISSIONER NEUKRUG: This is5 a four-year phase-in.6

Phase-in,7 yes.8 COMMISSIONER NEUKRUG: Well,9 it's not the same four years, no. We're10 about two years into a four-year rate11 process.12

And you13 anticipate the new fees to more than14 compensate for the cost of putting in15 this new system; is that true?16 COMMISSIONER NEUKRUG: We're17 looking for -- we're looking to recover18 both prior to this time and post this19 phase-in period to be collecting the same20 $120 million required for the stormwater21 utility.22 COUNCILMAN KELLY:23 Mr. Chairman, I'm just interested in24 hearing the other side of this. I want25 54 2/8/11 - TRANSPORTATION - RES. 1008141 to hear from some of the businessowners2 and the problems that they're going to3 have facing these increased fees.4 Thank you.5

Thank you,6 Councilman Kelly.7 Councilman Greenlee.8

Very9 quickly and just piggyback on what10 Councilman Kelly said. I ask this not11 because I'm doubting what you're saying,12 but is there some chart or some numbers13 you can actually show us showing the14 revenue neutral aspect to what you're15 talking about, either now or in that16 four-year period you talk about?17 COMMISSIONER NEUKRUG: Be happy18 to get that for you, Councilman.19

If you20 can forward that to the Chair, I'd21 appreciate it.22 Thank you.23

One last24 question before the panel goes. And I25 55 2/8/11 - TRANSPORTATION - RES. 1008141 see Councilwoman Blackwell joining us.2 Thank you.3 AquaEconomics, what is their4 relationship with the Water Department?5 You can answer that, Commissioner.6 COMMISSIONER NEUKRUG: I don't7 know our relationship.8

Oh, okay.9

We have no10 relationship with the Water Department11 whatsoever.12

But you are13 one cottage industry that has developed14 to consult businesses; is that what I15 understand?16

Correct. We're17 engineers and surveyors, because a big18 part of this program requires the19 engineering and the different things like20 that. So that's where we are.21

Has there22 been a list developed of such companies23 that has been made available to impacted24 customers?25 56 2/8/11 - TRANSPORTATION - RES. 1008141 COMMISSIONER NEUKRUG: There is2 a group from the Sustainable Business3 Network. It's called BUC, the Businesses4 for Unified -- Uniform Conservation, and5 they've been working very closely with us6 to develop this industry and understand7 what this industry would be and how to8 move forward.9

Okay. All10 right.11 Councilwoman Blackwell, would12 you like to...13

I14 certainly would. And I'm late, I'm out15 of order, I may repeat the question, but16 at any rate, on my way in from the17 meetings in my office, I ran into a18 gentleman who told me his initial bill19 was $300. Now it's 4,000. You know, an20 increase is one thing, but to go from 30021 to 4,000 is just about obscene. It's22 just -- it's not fair. It's not right.23 And what are we doing in that regard?24 That's not an increase. That's just25 57 2/8/11 - TRANSPORTATION - RES. 1008141 downright murder. You can't do that to2 people. We can't do that to our3 businesses and people who do business in4 our city. That's just not right. That's5 not fair.6 So what do I say to him?7 COMMISSIONER NEUKRUG: I think8 you -- yes, I think you said it very9 well. And it is a very difficult10 situation that we're finding ourselves11 in, where these bills for a true cost of12 service, the cost of providing that13 service is perhaps for the first time in14 many, many years being adequately15 forecasted in our bills, and that doesn't16 take away from the fact that it's17 significant increases, and we need to18 work with every one of those customers19 who are being impacted in that way and20 try to find a way to help them out,21 because clearly there is a significant22 issue there, and I agree with you, but23 within the system of equity, because just24 for that same property, there's another25 58 2/8/11 - TRANSPORTATION - RES. 1008141 property that's been paying $4,000 a2 month for many, many, many years and3 their stormwater charge really should4 have been in the hundreds.5

They6 say this about taxes. That's why,7 colleagues on this committee, I don't8 vote for an increase in taxes, because9 every time they say they're going to10 right it, everybody pays a lot more. And11 if the City says now we're getting it12 right, it's still not right. It's not --13 it sounds right if you say it. Now we're14 going to finally make it straight,15 everybody should pay what they should.16 But no matter where we go, human beings17 work in all of these offices and make all18 of these plans, and it's not right. It's19 not right to take somebody from $300 to20 4,000. It doesn't even make common21 sense. I don't care how right one says22 it is. It's not right.23 (Applause.)24

And25 59 2/8/11 - TRANSPORTATION - RES. 1008141 certainly I support the Chairman. They2 tell me he's asked all the right3 questions. He always does his homework.4 And I will work with him to see what we5 can to right some of this, you know. I6 believe well-intentioned people and7 right-minded people can straighten out8 these problems, and that's why we're9 elected, the government, to do our part.10 I will work with the Chairman to see what11 we can do to correct some of this.12 Thank you. Thank you.13

Thank you.14 You might have been late, but you are15 right on time.16 (Applause.)17

Are there18 any other questions for this panel?19 (No response.)20

Can the21 Clerk read the Panel No. 2.22 Thank you for your testimony.23

Members of the24 Unified Business Owners Association of25 60 2/8/11 - TRANSPORTATION - RES. 1008141 Philadelphia - Stuart Parmet, Jeff Allen,2 David Wolf, Daniel DiBruno, David3 Iacobucci and Richard Gorodesky.4 (Witnesses approached witness5 table.)6

Thank you.7 Who is testifying first? Who do we have?8

Jeff Allen.9

Now, feel10 free -- again, I make the same offer to11 the private sector -- to paraphrase your12 testimony.13

Thank you.14

Read your15 name for the record, please.16

Good morning,17 Chairman Jones. My name is --18

You can19 sit.20

Oh, sit? Thank21 you.22 Good morning, Chairman Jones23 and members of the Transportation and24 Public Utilities Committee. Thank you25 61 2/8/11 - TRANSPORTATION - RES. 1008141 for having our members speak. I2 represent -- I'm Co-Chairman of the3 Unified Business Owners Association of4 Philadelphia. And I don't want to -- if5 I could just see a show of hands of the6 businesspeople that are here that are7 representing the Unified Business Owners8 Association of Philadelphia.9

This is two10 months.11

Stuart, myself,12 Arty Elgart from Robert Elgart & Son,13 David Wolf and Jay Barrow formed this14 association when we got the bills about15 stormwater fees in the mail. The16 companies that are represented here today17 are companies that have been in the18 City -- one of our members has been in19 the City since 1732, if I'm correct. 22 We're celebrating 101 years in the City23 of Philadelphia this year, and I just24 want to give you a brief background on25 62 2/8/11 - TRANSPORTATION - RES. 2 My grandfather started my3 business in 1910. He was succeeded by my4 father. We're a small minority of5 third-generation companies that are still6 in existence. 7 I have union labor. I pay healthcare. I8 pay benefits. I have a good job in my9 facility. My management people have10 healthcare. 12 We're a leading convenience13 store distributor in the Northeast14 corridor. 21 I bought this property 13 years22 ago. It was a vacant, depressed23 property. It had been vacant for, I24 believe, somewhere between two and three25 63 2/8/11 - TRANSPORTATION - RES. 1008141 years. 4 In February, I just -- you5 know, it was great to hear the people6 from the Philadelphia Water Department,7 because some of the things they said did8 make a lot of sense to me, and, that is,9 that in February of 2010, myself and my10 constituents got notices in the mail of a11 stormwater charge that we were going to12 start to get on our water bills, which I13 understand the stormwater charge. 15 I understand all that stuff. 17 My fee was a 275 percent18 increase. So I went from about a hundred19 bucks a month to $1,300 a month, which is20 a real big fee. 24 She said, But, Honey, who is25 64 2/8/11 - TRANSPORTATION - RES. 1008141 going to buy your property? 12 So my water tax is enormous,13 and some of my members' water taxes are14 much higher than mine. Mine is going to15 cost me about $16,000 to $18,000 a year16 increase. 17 We were notified in February of 2010 from18 a letter from the Water Department with19 no date on it, no day date. It just said20 February 2010. Please participate in our21 meetings to explain this to you, and then22 they gave us four dates in February of23 2010 that they were having those24 meetings. So needless to say, none of us25 65 2/8/11 - TRANSPORTATION - RES. 3 One of the things that I4 guess -- we met with Joanne Dahme, who5 spoke today. There was, I believe -- I6 could be wrong. 22 COUNCILMAN GREENLEE:23 Mr. 24 What percent -- like what are you25 66 2/8/11 - TRANSPORTATION - RES. 1008141 defining as grossly increased? Is 1002 percent? 4

We took the 1,0005 losers, and the 1,000 losers collectively6 represent a 500 percent increase,7 cumulative water bills.8

Okay.9

I'll try to cut10 this a little short now.11 There were a thousand companies12 who were unfairly increased. I sent a13 letter to the Mayor's office. I got no14 response. We met with -- he had actually15 forwarded my letter to Bernard16 Brunwasser, who was the Commissioner of17 the Philadelphia Water Department. My18 constituents and I, Stuart, Arty, Jay, we19 met with the Water Department and Joanne20 Dahme. We spent two hours with the21 Commissioner rehashing the same22 well-rehearsed conversations we had with23 Ms. Dahme, and basically we got a history24 of the Philadelphia Water Department.25 67 2/8/11 - TRANSPORTATION - RES. 1008141 That's what we got.2 A lot of my members have3 increased their facility size. A number4 of our members are very philanthropic in5 the City. One of our members has a6 church in his community at 10th and7 Butler that he gives to the neighborhood,8 to the people in the neighborhood.9 Stuart's company built a Police Athletic10 League on their facility. One of our11 members built a greyhound recovery or12 hospital, veterinary hospital, on his13 property.14 So I only want to say that one15 of the things that was mentioned was it's16 the worst economic time in our country.17 We got these increases, and really all18 we're asking is some -- we understand19 there's increases. We understand they're20 not going to rewrite the entire book21 about the increases, but there has to be22 a way to phase this in maybe over a23 ten-year period where we could breathe a24 little bit and afford to pay this thing.25 68 2/8/11 - TRANSPORTATION - RES. 1008141 That's all I have. Thank you.2

Okay.3 Thank you.4 The members will be back in a5 minute. Maybe whoever else would like to6 testify.7

Daniel DiBruno.8 Daniel.9 MR. DiBRUNO: I guess it's good10 afternoon.11

13 MR. DiBRUNO: Chairman Jones,14 other Councilmen and women, if they're15 still here, my name is Daniel A. 17 Darby & Son, Incorporated. We have been18 in the City since 1854. It's a19 family-owned business. 22 My story is simple. I did23 think that Councilman Jones was24 perceptive about businesses and how25 69 2/8/11 - TRANSPORTATION - RES. 7 Darby & Son. It's a small family-owned8 business. We trade as Pennsylvania Wire9 Works, and we are one of the oldest wire10 cloth companies in the United States,11 over 157 years in the City of12 Philadelphia. At one time we employed13 250 people. Now we are down to 15, as14 wire cloth manufacturing moved overseas15 in the '60s. It was Germany and then16 Japan and Taiwan, Korea and now mostly17 China. 23 We employ many men who are within walking24 distance to our facility. We have25 70 2/8/11 - TRANSPORTATION - RES. 1008141 witnessed and have been a significant2 partner in the improvement of our3 neighborhood. We've been there over 254 years. And what I mean, there's more5 police presence, the graffiti hotline6 works, there's less crime, less arson,7 and there is even some new housing. " I'm an engineer, but I13 don't think you have to be an engineer to14 be intuitive about this. 20 I think, Councilman, you were21 hitting on this. It's just so intuitive22 that a parking lot and a 40-story23 building have different profiles. And24 water sheds on the impervious glass of25 71 2/8/11 - TRANSPORTATION - RES. 1008141 all the facades. So I feel that all the2 exposed area should be used in the3 assessment calculation, not just the4 footprint. This will provide fairness to5 the parking lot people, the tall6 buildings and, as I am, I'm somewhere in7 between. 11 And what I did -- and not to be12 clever or smart, but, I mean, I just used13 my intuition. And we have the skyline of14 Philadelphia, and water sheds and15 impinges and falls from these areas if16 they're not green and restricted. And I17 don't think -- I mean, I'm ad-libbing18 now. 24 My appeal is, as I say,25 72 2/8/11 - TRANSPORTATION - RES. 1008141 intuitive. 13 The monthly stormwater charge14 does not include the impervious facade of15 our building, nor does it reflect the16 entire impervious facades of other17 buildings in Philadelphia. We contend18 that rain and snow events also shed water19 from the facades of impervious tall20 buildings, and by not counting the total21 of impervious area, this unfairly22 penalizes our building configuration and23 benefits tall buildings. This is not an24 equitable assessment, and results in25 73 2/8/11 - TRANSPORTATION - RES. 9 When our health insurance goes up 1010 percent, 15, 20 percent, we absorb it,11 but to have costs go up 4,400 percent and12 1,100 percent, it's like how do you deal13 with it? 14 So with that, I'll close. 18

Thank you19 for your testimony. We take increases20 either way, decreases, very seriously,21 because it impacts the operation of our22 city. You are valued members. You pay23 taxes. We want you to survive so that we24 can as well.25 74 2/8/11 - TRANSPORTATION - RES. 1008141 MR. DiBRUNO: Thank you.2 You're very intuitive with your3 questions.4

Thank you.5 Next witness, state your name6 for the record, please.7

Good afternoon,8 Chairman Jones and members of the9 Transportation and Public Utilities10 Committee, and thank you for giving us11 the opportunity to speak. My name is12 David Iacobucci. I'm employed by Baker13 Properties, which is the owner of a14 217,000 square foot warehouse building15 located in Northeast Philadelphia.16 In 2006, Baker Properties made17 an investment of over $9 million in that18 building, and the building is presently19 occupied by a single tenant on a20 long-term lease. It's a net lease. This21 was our first investment as a company in22 Philadelphia, and in light of the23 imposition of these stormwater fees, it's24 possible it might be the last one, too.25 75 2/8/11 - TRANSPORTATION - RES. 1008141 By way of background, Baker2 Properties invests in income-producing3 commercial real estate for its own4 account. We are a dispassionate investor5 who can put our money anywhere we think6 there's the prospect for a decent future7 income stream and growth from asset8 appreciation.9 The implementation of a10 stormwater management fee on our property11 has a direct detrimental effect on our12 bottom line, on the value of our property13 and on our prospects for retaining our14 tenant at the property. In the simplest15 of financial terms, after full phase-in,16 the stormwater tax -- and make no17 mistake, you can call it a fee if you18 want, but it's effectively a tax -- will19 add 18 cents a square foot, or about20 $40,000, to our operating costs. At21 today's acceptable trading values for22 real estate like our building, that23 imposition translates into a real24 reduction in market value on the property25 76 2/8/11 - TRANSPORTATION - RES. 1008141 of over a half million dollars.2 Our building functions just3 like other buildings of its type across4 the country. It's leased to our tenant5 on a triple-net basis, which means that6 in addition to paying us a base rent, our7 tenant reimburses us as its landlord for8 all the operating costs of the property.9 Our tenant happens to be a10 multi-national, multi-billion-dollar11 company that provides about 100 jobs at12 this property location. Before their13 lease expires -- and, by the way, it14 expires later this year -- they will15 actively seek to move to competitive16 buildings, not only within Philadelphia17 but in the Philadelphia suburbs, across18 the river in New Jersey as well. In19 order for us to offer them a competitive20 deal versus their options in Burlington,21 Camden or Gloucester County, New Jersey,22 we'll have to level the playing field,23 and we'll have to do that by paying the24 cost of the stormwater tax without25 77 2/8/11 - TRANSPORTATION - RES. 1008141 passing it on to our tenant.2 The reduction in --3

I'm sorry.4 Would you happen to know if any of those5 counties charge a similar fee?6 They do not?7

We are8 investors in South Jersey real estate,9 and they do not in any of our South10 Jersey buildings.11

Thank you.12

So we're really13 competing to retain that company and14 those 100 jobs in the City. And as a15 dispassionate multi-billion-dollar16 company, this tenant can relocate17 anywhere it wants, anywhere it feels it18 can do business with the lowest overall19 cost. The impact on us is the reduction20 of the net rent paid by our tenant, the21 reduction in cash flow on our investment22 and the prospect of future increases in23 the stormwater tax, not to mention the24 precedent set by this regressive25 78 2/8/11 - TRANSPORTATION - RES. 1008141 imposition of a fee will all serve to2 devalue the property, not to mention put3 those hundred jobs at real risk of flight4 elsewhere, maybe not just out of the5 City, but out of the state. So that's a6 big issue for us.7 In closing, I strongly urge the8 City to rethink the imposition of these9 fees on property owners. They're10 disproportionately unfair to many11 commercial businesses and investments,12 and if not repealed, they stand to do13 more long-term harm to the basis of14 property valuation in the City and to the15 business climate in general in16 Philadelphia.17 Thank you for this opportunity18 to testify.19

Thank you.20

Councilman, we have21 a few more members.22

Before you23 guys leave the panel, do you have any24 questions?25 79 2/8/11 - TRANSPORTATION - RES. 1008141 Councilman Greenlee.2

Thank3 you, Mr. Chairman.4 Just a question. You heard the5 previous witnesses talk about the loan6 program. Just I was wondering generally7 what's your thoughts on that?8

Well --9

Do you10 think it helps?11

Well --12

Speak into13 the mike, please.14

Yeah,15 speak into the mike, please. The16 stenographer can't hear you.17

Just to kind of18 shorten that, we have a member that's19 going to speak who represents about nine20 million square feet of real estate in the21 City, and he can eat that loan program up22 pretty quick. Bottom line is, we're23 getting ready to enhance our facility,24 which I have to decide whether I want to25 80 2/8/11 - TRANSPORTATION - RES. 1008141 spend money on stormwater or creating2 another 20 jobs by increasing my3 warehouse space by 20,000 feet.4

So you view5 it as I can either be in compliance with6 some of the rainwater runoff or I can do7 something to enhance the operation?8

We understand that9 this project that they worked on needs to10 be -- that they had to implement11 something. The problem we have is that12 as the 1,000 losers, to have an increase13 of something for myself, which was 27514 percent -- some of the members have15 higher increases -- the increase is16 astronomical. It doesn't make sense.17 Why should a business that's been in the18 City for 101 years all the sudden turn19 around and go, Wait a minute, where am I20 getting 20 grand from? And there's no21 end to it. We don't know what happens in22 year four. We don't know what -- we know23 what happens in year four. We don't know24 what will happen in year five, year six,25 81 2/8/11 - TRANSPORTATION - RES. 1008141 year seven. We're burdened with the tax.2 We consider it a tax, and it's going to3 devalue our properties. A couple of our4 members have already gone to reassess5 their properties, because the value is6 going down, and when you hear from some7 of the other members, it will -- everyone8 has got a little bit of a different take9 on this. So I thank you for your time.10

I appreciate11 your testimony. Thank you very much.12 Will the Clerk read the -- oh,13 this is the same panel. Okay.14

16 My name is Stuart Parmet. I'm the17 founder of the Unified Business18 Association and Co-Chairman. I wanted a19 couple of people to speak first, but I'm20 going to ignore this. I want to thank21 Theresa for her help. I can't tell you22 how hard it was to even get here to have23 people hear us on this issue. I mean, it24 took us months of very harsh letters to25 82 2/8/11 - TRANSPORTATION - RES. 1008141 the City and threats to just be heard. 4 I've been in the City. I'm a5 simple person. I've worked very hard to6 build a large business. I've never7 needed the City's help in anything. 21 I said, What's that? 24 I said, What? I never heard of25 83 2/8/11 - TRANSPORTATION - RES. 1008141 storm runoff. 3 I'm very excited because I4 don't understand why the Water Company5 and Ms. Dahme and stuff are being6 adversarial. 7 They know there was in some cases 4008 percent increases. We've asked -- I've9 spent over $10,000 already of my own10 money and numerous hours, which I really11 can't afford to do, to try to address12 this to get the attention that we are13 here today. I don't understand -- the14 meeting that we had with the Water15 Company, that we went to, there's a16 tremendous, tremendous issue here that we17 haven't even discussed, which is the18 impact on real estate to -- I invested in19 the SEPTA bus terminal, which is in a20 very depressed area, and I spent a lot of21 my own personal money to develop the22 building, and, quite frankly -- I lost my23 train of thought here. But the reality24 is is that we -- when we went to the25 84 2/8/11 - TRANSPORTATION - RES. 10 So I said, So let me guess, you11 implemented something of this magnitude12 and this impact without really discussing13 all the ramifications. 19 I'm not upset as much with the20 tax. I think if we did it over 2021 years -- I'm extremely upset with it,22 believe me. I think it's outrageous, and23 I think all the things that I've gotten24 involved with over the last couple of25 85 2/8/11 - TRANSPORTATION - RES. 1008141 months tiplified how ridiculous this2 really is. I'm not saying three, four3 hundred. And like Jeff said, the4 insurance company, like Blue Cross, that5 goes up 15 percent, I hate that. 7 But a 300 and 400 percent increase on8 something I've never heard of before,9 that's outrageous. 11 But I think it's also --12 Ms. Dahme said something about the13 representation. It's another thing. I'm14 a businessman. We couldn't get away with15 what was done as businessmen. I would16 lose all my business. When they said17 that we had representation, we didn't18 have representation. 21 Jack Kramer Delicatessen, that was the22 guy who the Water Company used to23 represent small business. That's what24 was told to us by the Water Company. I25 86 2/8/11 - TRANSPORTATION - RES. 1008141 mean, I don't understand that. I pay hundreds of thousands of4 dollars in taxes. I took $2 million of my own personal6 money to renovate a building in an area7 that's completely depressed. 13 The last thing I want to say, I14 developed this building four years ago,15 five years ago. A friend of mine who is16 a philanthropist said that he wanted to17 put a Police Athletic League on our18 property. 19 That's priceless to have that kind of20 acreage. I felt that because we're the21 inner city area, that I should give back22 to the City. Okay? And we gave an acre23 of property to this person to build a24 magnificent state-of-the-art $14 million25 87 2/8/11 - TRANSPORTATION - RES. 4 Because this whole operation5 with the Water Company was so secret for6 so many years -- and I don't understand7 why you guys aren't trying to help us8 instead of give us rhetoric. I really9 mean that. 10 We're businesspeople that are trying to11 survive. 12 I have little kids. I'd like to have a13 legacy to give them this building. 16

That's okay.17 Take your time.18

If I had known19 about this issue, about the whole process20 of the Water Company and what they were21 doing -- and they purposely kept it22 secret. And, Commissioner, you've23 stepped into this, so we're sorry that24 you had to jump into this, because this25 88 2/8/11 - TRANSPORTATION - RES. 1008141 is none of your doing. You're just2 getting the brunt of it.3 But the fact that they kept4 this secret on purpose, because they know5 this would have been -- would have never6 passed, the businessmen would have been7 up in arms, and rightfully so. I8 developed my building and gave that9 location, which was the most appropriate10 location for that runoff where that would11 have been to fix it right and then and12 solve this problem quickly. But having13 had their engineers out, they told me my14 costs would be close to $350,000 to15 remediate the building right to the way16 they like it, and for that, I would17 lose -- I would gain 20 percent of that18 revenue they were going to pay. So I'd19 still be paying close to $30,000 a year20 in this tax or assessment, whatever you21 want to call it, that I never heard about22 it before. And I know of no other23 state -- Ms. Dahme might have also said24 that people are doing it, like25 89 2/8/11 - TRANSPORTATION - RES. 1008141 Washington. I guarantee they don't have2 a thousand losers like we have. They may3 have did it amiably so that people did it4 right, but they didn't take -- what they5 did was -- and she told me this6 specifically. She said, We took the7 people that complained the most, which8 were these big buildings, Blue Cross,9 Comcast, all these buildings, and who had10 rightfully had an issue because their11 meters were bigger and they were paying a12 lot of money. I agree with that, but13 what they did was, they put that burden14 on us, and that's what we have a problem.15 They took their issue and put it on the16 businessmen, and that's why we're so up17 in arms.18

Do I19 understand you to say that the cost of20 remediation of your water runoff problem21 would have only yielded you a small22 percent of the total bill charged anyway?23

Yes, sir. Yes,24 sir, out of over a $300,000 charge.25 90 2/8/11 - TRANSPORTATION - RES. 1008141

So what your2 testimony says to me is, you're bringing3 into question what is this remediation4 worth by way of the corresponding5 reduction or credit that you get towards6 that and is that formula equitable; is7 that --8

Yes. It was not9 successful one bit, and everybody I've10 heard who have tried to cooperate also11 had it not successful whatsoever.12

So you're13 saying even when consulted --14

Yes.15

-- the cure16 outweighed the --17

There was no cure.18 It was still a bad, bad cut.19

All right.20 Thank you.21

Thank you very22 much.23 This is Rich Gorodesky, who is24 with a real estate company that's also --25 91 2/8/11 - TRANSPORTATION - RES. 1008141 like to give you the insight and impact2 that it will have on current purchasing3 and selling of real estate in the City of4 Philadelphia, which was not even5 considered at the time of this.6

Good afternoon,7 Chairman Jones and members of the8 Transportation and Public Utility9 Committee. My name is Richard Gorodesky.10 I'm Senior Vice-President, Industrial11 Division, of Colliers International.12 We're a commercial and industrial real13 estate brokerage firm. Our office covers14 the eight-county Philadelphia15 metropolitan region, which includes all16 of Southeastern Pennsylvania, Southern17 New Jersey and the State of Delaware.18 Since word of this recent19 change has started to spread, many of the20 companies that I work with are now21 considering this new cost in their22 relocation plans.23 For example, I am currently24 working with one company that is25 92 2/8/11 - TRANSPORTATION - RES. 1008141 considering expanding their current2 60,000 square foot distribution facility3 in Philadelphia, but because of the new4 stormwater charge, they have asked me to5 show them buildings in South Jersey.6 Another Philadelphia-located7 client with about 100 employees is8 seeking to relocate to more efficient9 space for their distribution needs, and10 they have asked me to explore Bucks11 County and South Jersey, specifically12 citing the new stormwater charge as,13 quote, one more reason, close quote.14 Bucks, Montgomery, Delaware,15 Chester, Gloucester, Camden and16 Burlington Counties are all part of the17 commercial and industrial hub that is18 anchored by Philadelphia County, and none19 of these counties, to my knowledge, has20 made this change in stormwater billing.21 This has created an imbalance and one22 more reason for companies to choose the23 suburbs over the City. And you can be24 sure the surrounding counties will use25 93 2/8/11 - TRANSPORTATION - RES. 1008141 this against Philadelphia as one more2 reason for them to win the job creation3 battle.4 There were countless5 transactions made over the years, sales,6 leases, their related mortgages. All of7 these were underwritten, which were all8 put into place with a particular set of9 assumptions about the economics of the10 particular property. The new method of11 charging for stormwater runoff changes12 these economics, which will have a ripple13 effect on many levels. This is clearly14 an additional operating cost, and any15 additional operating cost reduces the16 valuation of the underlying property.17 Many industrial buildings in18 the City of Philadelphia are older, inner19 city facilities with physical20 limitations. Many of these buildings21 have no extra ground, and the buildings22 and their parking lots cover corner to23 corner. While real estate taxes can rise24 and fall based on economic-based25 94 2/8/11 - TRANSPORTATION - RES. 1008141 valuation, the traditional concept of2 utilities can be controlled by usage.3 Stormwater runoff is not economically4 controllable for many of these older5 inner city properties.6 It was recently reported that7 sprinkler systems may be required in new8 residential construction. While this is9 certain to reduce the risk of fires and10 save lives and reduce property damage,11 obviously the policymakers recognized12 that it would not be economically13 feasible to install them in existing14 structures, and they will be15 grandfathered in. Another example is the16 Americans with Disabilities Act. Items17 like ramps and accessible bathrooms are18 required in new commercial and industrial19 construction and renovations. Again,20 policymakers recognized that it is not21 economically feasible to install these22 items in pre-existing structures, and23 they are grandfathered in.24 In my opinion, existing25 95 2/8/11 - TRANSPORTATION - RES. 1008141 commercial and industrial buildings2 should be grandfathered in, and3 stormwater management should be applied4 to new construction and to significant5 additions to existing construction, where6 feasible. In this way, the economics of7 change will be factored into the system8 going forward, and gradually the City9 will improve stormwater management as we10 grow over time.11 Any questions?12

No. I13 thought you were taking a pause. No.14 Thank you for your testimony.15

Thank you, Rich.16 Next speaker is David Wolf of17 Wolf Investments. He is the biggest18 loser.19

What a title.20

One of the21 things I've learned in government, when22 you have winners and losers, we all lose.23

I'm going to go into24 the winners and losers, Mr. Chairman.25 96 2/8/11 - TRANSPORTATION - RES. 1008141 Mr. Chairman, thank you, and members of2 the Transportation and Public Utility3 Commission. Thank you for the4 opportunity to speak with you.5 I see a friend up there now,6 Councilman O'Neill.7

Let the8 record reflect Councilman O'Neill has9 joined the Committee.10

I'm so happy to have11 this opportunity to speak after the Water12 Department, because I think of this room13 as a big balloon filled with water and14 I'm the guy with the bow and arrow and15 I'm going to shoot holes in it, but16 unfortunately I didn't bring umbrellas.17 So everybody is going to have to deal18 with the fallout, and there's a lot of19 fallout here. So I would like all of the20 people that are losers to please stand21 up.22 (Some audience members23 standing.)24

I'm a loser 15 times25 97 2/8/11 - TRANSPORTATION - RES. 1008141 over, 15 times. 2 The Water Department did not say and did3 not give an answer to the way water4 billing used to be done. 7 So if you had a great big pipe coming8 into your building that has to go 509 stories up, it might cost you $5,000 per10 month, I used to call it, for the11 privilege of having this big service, and12 that's how stormwater has historically13 been paid. 18 Now, we know by the City's own19 admission that in 1996 they started20 talking about changing the system to one21 where it deals with roofs and square22 footage and blacktop and taking it away23 from those people that have had the24 significant burden previously. Of25 98 2/8/11 - TRANSPORTATION - RES. 1008141 course, the people that have the2 significant burden are those people that3 may be renting buildings for $50 a square4 foot or $20 a square foot. We rent our5 buildings for $3 a square foot or $4 a6 square foot. 8 On the presentation that I gave9 to you, I listed probably about 2010 properties. 11 2005 Market Street currently pays $4,55012 per month. Their rate will go down to13 $598 per month. 1835 Market Street14 currently pays $2,277 a month. Their15 rate will go down to $267 a month. 18 I've been a property owner now19 for over 20 years. No one during that20 period of time has told me anything about21 stormwater management. If they had, if I22 think I'm a smart businessman, I would23 have taken steps. Every time I did some24 blacktop work and spent $20,000 or25 99 2/8/11 - TRANSPORTATION - RES. 1008141 $30,000 for that blacktop work, we would2 have done it differently so that we could3 make changes to deal with stormwater4 management. 5 In the year 2006, contrary to6 what we had always done before, we built7 two buildings totalling 44,000 square8 feet. The Water Department held us up in9 terms of stormwater management how they10 wanted us to fit out the space for 1811 months, and ultimately it cost us12 $200,000 so that we could deal with about13 100,000 square feet of parking and 44,00014 square feet of building space. Now --15 this was 2006 -- I have an adjoining16 170,000 square foot building that I could17 have retrofitted if someone had said to18 me, Mr. 25 100 2/8/11 - TRANSPORTATION - RES. 1008141 When I went to the first meeting from the2 Water Department, I asked if anything was3 in place. They had now been studying4 this since 1996. I asked them if5 anything was in place for people to6 borrow money at a lower interest rate,7 and that was in February or March of8 2010, and there was nothing in place to9 help us. 15 And I said, That's great. And16 of course, what was the first question17 out of my mouth? 21 And I said, Well, that's going22 to take care of me, my companies. What23 about everybody else? And I think the24 City has not -- pardon me. Water25 101 2/8/11 - TRANSPORTATION - RES. 4 So I believe, if I backtrack5 the numbers from my company to everybody6 else that's at risk, the number isn't 57 million, it's not 50 million, it's not8 500 million. It's $5 billion of cost, $59 billion. And they have 5 million. 11 The cost to Wolf Investment is12 $400,000 at the end -- or in July 2013,13 per year. 21 This is the list of the thousand biggest22 losers. The pink people is the City of23 Philadelphia. So we can go page after24 page after page of pink things, and this25 102 2/8/11 - TRANSPORTATION - RES. 1008141 is just the top thousand. 3 For the School District of Philadelphia,4 it's 625,000. That's just skimming the5 top thousand. 8 The Water Department says,9 Well, it comes out even when we're all10 done. Well, most of those people are11 under water. When I asked Joanne about12 the City being part of the top thousand13 losers, she said, Well, we haven't14 figured out how much we're going to be15 able to mitigate that and how much is16 parks. But this is supposed to be17 revenue neutral. If I've heard it once,18 I've heard it a hundred times.

This is19 not revenue neutral, because if the City20 has to take out of one pocket and give21 the Water Department, that means it's not22 getting money from somebody else. 25 103 2/8/11 - TRANSPORTATION - RES. 1008141 I have buildings that have one2 drain. My sewage, water and my3 stormwater are all in one pipe. Those4 buildings are almost impossible to5 retrofit. We have to go inside the6 building. We have to divert drains. We7 have to find a way to send the water8 somewhere else. We have to hold the9 water. We have to hold that first inch10 of water. 11 So I suggested to the Water Department,12 Well, I have six acres in Northeast13 Philadelphia and it's just sitting there,14 and we have the Byberry Creek that runs15 by. 19 I paid in 2009 to the City of20 Philadelphia $342,000 in real estate21 taxes, $167,000 in business use and22 occupancy tax, $80,000 in net profits23 tax, and 17,000 in business privilege24 tax. Six hundred and seven thousand25 104 2/8/11 - TRANSPORTATION - RES. 1008141 dollars. And I think for $607,000 I2 would get something back. Well, one of3 the things that I think I should get back4 is the streets, but the streets, some5 little fairy came by and said the streets6 are exempt. They're not part of the7 stormwater system. And the City -- no8 one pays for the streets. I have to pay9 for the streets. You have to pay for the10 streets. 12 This is a plan that is13 inequitable, unfair, deceptive and14 non-transparent from the beginning. They15 could have told us 15 years ago they were16 going to do this, and now they gave us17 three months' notice and we're already18 implemented 25 percent. So I have things19 that went from $115 now to $1,500 as the20 first 25 percent. 22 What can the City do to -- I23 have -- backtracking for a second. I24 have submitted to you a copy of the plans25 105 2/8/11 - TRANSPORTATION - RES. 1008141 that show some of the deception that the2 City gave us, and everybody got this in3 the mail, and this is how we first4 learned about stormwater management. 9

We heard10 about it.11

We have the best12 kennel in the City of Philadelphia. I13 invite everyone from City Council to come14 and visit it. It's fantastic. We see15 more greyhounds in surgery than anywhere16 in the world.17

What I'd18 like you to do, Mr. Wolf, is summarize so19 that -- we have an ambitious amount of20 people that are interested in the21 subject, so...22

I have just one23 thing in conclusion, Mr. Chairman. The24 City can solve this with a more equitable25 106 2/8/11 - TRANSPORTATION - RES. 1008141 plan, which Atlanta has done, and2 basically the City pays for the3 stormwater management fees and has4 increased taxes proportionately for5 everyone. So I pay $400,000 in taxes. I6 will pay more proportionately than7 somebody that pays $150 or $200 in taxes,8 but I am not walking over hot coals. So9 this would be a way to do it instead of10 taking a club and hammering down people11 who can ill afford to pay these charges.12 Thank you for your time.13

Thank you14 for your testimony. I'm going to begin15 with -- we'll hold questions. Would you16 like to make a statement, Councilman17 O'Neill?18

Just a19 couple of observations. One, the Water20 Department or the Water Commissioner,21 because he makes the final decisions, I22 believe made a grave mistake in this, but23 it's a mistake that they're allowed to24 make under the City Charter,25 107 2/8/11 - TRANSPORTATION - RES. 1008141 unfortunately. One, this is not a bad2 concept, neither was the American for3 Disabilities Act a bad concept, but what4 Washington did -- and they're not exactly5 known for getting it right -- they6 decided that the cost of implementing7 those ramps and other things that were8 required under the Act would only be9 triggered with new construction or major10 renovation, so that anybody that was11 playing by the rules up to that point12 would not be penalized. Going forward,13 there was a clear understanding.14 The ADA was a perfect model for15 this that wasn't used. Now, granted,16 that would take a very long time to17 implement this if that happened. The18 alternative -- and I'm not saying that19 what you're talking about, more20 equitable, spread it over taxpayers21 instead of ratepayers, isn't something22 worth considering or shouldn't have23 been -- should have been considered, but24 the four-year phase-in with the cost, the25 108 2/8/11 - TRANSPORTATION - RES. 1008141 real cost, to some property owners versus2 others being so much higher probably3 should have been a 20- or 25-year4 phase-in. And I don't know if that can5 still be considered.6 Chairman Jones mentioned even7 if it's done another way and the cost8 increase could be no more than a certain9 amount until you hit. You might go do10 that in five years if it were ten11 percent, and that's the number that was12 just thrown out, or it may take you 3013 years to have that happen, but it's14 something manageable, especially while15 the Water Department's educating and16 partnering with the kind of things they17 are doing. I mean, Joanne didn't make18 this decision. She works for the Water19 Department. I can't imagine anybody20 being better at trying to help people21 within the framework of what we're22 dealing with and explaining it, caring,23 trying to help.24 But the question is, can the25 109 2/8/11 - TRANSPORTATION - RES. 1008141 Water Department reconsider this in some2 way, shape or fashion that is more3 palatable and more -- less anti-business,4 I guess is the best way of saying it.5 You know you're going to hurt somebody6 any time you give them an increase, but7 do you want to destroy them, and in8 certain cases, the increases are so high9 that you're going way beyond just hurting10 them a little bit. As you said, all the11 mitigation in the world isn't going to12 help some properties.13 But when you follow their14 theory, you at least understand where15 they're going. They make that very16 clear. The question is, how do you get17 from here to there, and I think in that,18 there wasn't enough conversation with19 stakeholders.20 Thank you.21

Thank you,22 Councilman.23

Thank you,24 Councilman. I think that's the whole25 110 2/8/11 - TRANSPORTATION - RES. 1008141 issue here, is when we leave today, where2 do we go from here? I mean, I still have3 to write a check next week for 4,000, or4 whatever the proportion amount is from my5 water bill, and every time I do it, it6 makes me sick to my stomach, because it's7 not fair. And that's all we're asking.8 That's why businessmen have taken the9 time to come here out of their precious10 days to let you know that.11 Now, what we need to do is,12 where are we going to go from here?13 We just have a couple more14 people.15