So about 50 percent of it is already being charged to the base rate?
Well, we would go from 18 to, say, 22 percent. 53 04/07/04 - FINANCE- BILL 040153
I just think most people don't realize that are hitting the ceiling, that are feeling their nerves being frayed by PGW, don't realize that they're already paying twice as much today as they're being asked for to pay additionally tomorrow if the surcharge were to go through for other people's bills. And I know that's how the system has to work, but I don't think people realize how much of that bill every month is for that. Everybody expects it to be something, but they expect it to be something very low.
So in essence, Councilman, this is not a new proposal. It's an existing proposal.
It's what we experienced, to some extent, in cable TV when they made them unbundle the charges. And when you found out that you were also paying for 54 04/07/04 - FINANCE- BILL 040153 the box, the remote and a whole bunch of other things, which originally had been just a part of your monthly thing, then people starting calling. "Why am I paying for this? Why am I paying for that?" Well, you were always paying for it. We just gave it a new name.
At the Water Department years ago we split the bill, water usage, service charge. People went ballistic. They didn't realize how much they were paying for service. It was already being paid, but it wasn't split up. Maybe we should have it split out so people know.
Where are we on commercial accounts? Are they all paid up, commercial and other accounts?
No. We have an ongoing collection effort with our commercial accounts as well.
Well, how come everybody tells the poor residential customer, you're paying for your neighbor and nobody talks about the commercial accounts? I said it at our last hearing. Nobody says to a 55 04/07/04 - FINANCE- BILL 040153 commercial account, if you employ one person you could be paying for a business who employs 50 people. Nobody talks about business accounts. Everybody says that some poor little old lady is paying for somebody or a senior is paying for a woman with a houseful of kids. The whole argument is very unfair and it pits poor people against poor people or people who are average wage earners against other average wage earners. It's not fair. I think it's an unfair argument and I don't think you can make it, at least until you give us a full picture. Let's help everybody who owes gas and talk about who owes and then we can have a legitimate question. But to be all over the place blaming one neighbor for another neighbor is not fair. I think it's wrong. I think it's immoral. I think it's unfair, absolutely unfair, to just tell the residential customer, you're paying for the next one. Well, give us some numbers on the commercial stuff.
About 10 percent of 56 04/07/04 - FINANCE- BILL 040153 the problem is commercial.
So how much is that? About percent? So you're saying 5 90 percent of it is residential? 6
Well, if we're talking $150 million, $135 is residential related and $15 million is commercial related.
Is the delinquency rate the same, though, for commercial and residential?
It's about percent. 17 Again, these are numbers I don't have right at 18 my fingertip. We can get you a schedule that 19 shows exactly what the relevant contributions 20 are to the problem. It's a substantial 21 contribution. 22
I thought you 23 said last week or the week before when we were 24 sitting here that commercial delinquencies, 25 forgetting what percentage they are of the 57 04/07/04 - FINANCE- BILL 040153 total, were just as poor as residential delinquencies.
What I said was that a lot of these delinquencies are of two kinds. One, they are very small businesses that are on margins; pizza shops, dry cleaners, those kinds of establishments. And there are also rental buildings fitting within -- just as the PHA has a commercial rate, small multiple-unit dwellings are commercial customers. We have a substantial problem with some of those as commercial customers.
You just mentioned two businesses that we all have in our districts and are all over the City, that when one moves out, the other moves in right away. There aren't any vacant dry cleaners. There aren't any vacant pizza shops. And landlords who are crying poor in this market are just using you as a bank. That's my suggestion.
Councilman, the people who move out are our problems. It isn't the ones who move in. 58 04/07/04 - FINANCE- BILL 040153
Once that happens, the landlord should be responsible for the utilities.
Well, that is a proposal that we would like Council to consider.
We have had some issues where a person says they moved, a person or business, and that they called in and then they're told, well, the utility says they didn't get the call and then they're charged an exorbitant amount and they're stuck. So I think that we have to be careful when we talk about doing that. Also, if commercial accounts have a commercial rate, which is obviously higher than a residential municipal rate, where does that affect all of this about what they owe? Is it that you are more apt to shut off commercial accounts or are you more aggressive in contacting them? 59 04/07/04 - FINANCE- BILL 040153
We have issues turning off multiple units. There are renters in the units and so there's a whole other legal set of restrictions on us. That's what makes shutting off some of these accounts difficult because when you shut them off, you're shutting off people in their homes and that's what we don't do.
But the landlord or the owner who isn't paying his or her bills.
The landlord may not be paying us, but the renter is paying the landlord.
Coming from a utility background, don't tell me that you've never heard that there's a process where you approach the people that are the tenants and 60 04/07/04 - FINANCE- BILL 040153 the tenants at some point start paying the bill? There is a process where you can turn the service off, negotiate with the tenants in the building and they start paying for the usage from at least some point forward and then the landlord is responsible for the debt. Am I correct that there is a process like that?
There is a process. Councilman, could I have Mr. Hershey respond, if he might? This is Steve Hershey. He's our Vice President For Community Initiatives.
Councilman, you're referring to the Utility Services Tenants Rights Act, which does provide a mechanism and a whole set of requirements on the utility. The way that works is that the utility, prior to shut off, must post a notice on the building and give tenants the opportunity to organize as a group, then approach the utility and agree to pay the utility bills from that date going forward. It's an Act which sounds wonderful in theory, but, in fact, is very 61 04/07/04 - FINANCE- BILL 040153 cumbersome and not terribly workable from the perspective of the tenants. It has worked on occasion. I know that PGW has worked, for example, directly with the Tenants Action Group to assist tenants. And within the last month, I personally had conversations with the Tenants Action Group to try to organize other mechanisms that go even further than the Act that we've referred to. The Act has not been an overwhelming success for tenants, and it's very difficult to work.
Well, I recollect PECO Energy was very successful in making that work, so I don't know why it would work for an electric utility and not a gas utility. I'm curious, how many times have you pulled the trigger on that process on multi-apartment complexes? In other words, do you ever try to do it? Again, that's an example of not using all the tools of the trade to collect your money. I mean, just to allow the debt to continue and continue, at least you're 62 04/07/04 - FINANCE- BILL 040153 collecting the money going forward. It just sounds like you're not using some of the authority that you have through the PUC. I believe that's a PUC process, the posting, et cetera.
Councilman, in response to that, I can tell you that during the years that I worked at Community Legal 10 Services as an energy attorney and 11 coordinating with the Housing people 12 representing Tenants Action Group and other 13 community organizations, the difficulties that 14 I've cited with implementing that Act were 15 uniform for all utilities that were subject to 16 the Act in this City. 17 The success and ability to implement 18 that and make it work so that the tenants 19 organized varies from building to building, 20 landlord to landlord, year to year. It 21 depends on who's in the building, how many 22 tenants there are, how well those tenants get along with each other. There are certainly some success stories.
Thank you. 63 04/07/04 - FINANCE- BILL 040153 Thank you, Madam Chair.
Thank you. The Chair notes that Councilwoman Blondell Reynolds Brown is here as well. Getting back to that very issue that Councilman Rizzo discussed, you have slum landlords and landlords who don't pay where tenants end up in an escrow rent thing under that kind of system. So generally, if they're not paying the utilities, they're not taking care of tenants, and tenants have the right to escrow their rent and place their rent with the escrow agent. That is acceptable. I mean, that's a process that's open to anybody. The tenants still pays, but that happens anywhere where you end up with an irresponsible or a bad landlord, one who won't keep up repairs and that sort of thing. That's a process, period. Whenever there's a problem, tenants have rights. Sure, they do have a right to escrow their rent and they end up with utility problems and all of that, but that is what it is. You know, you do what you have to do if 64 04/07/04 - FINANCE- BILL 040153 you end up with a slum landlord who won't do that. It's always a lot of work and a lot of meetings and a lot of everything, but that is what it is. It still seems to me that we have different standards for different people. PHA pays in advance, pays on time, and yet they're put in a business account status. I don't agree with that. I don't think it's fair. And it seems to me that we don't have uniform standards for all. It looks to me like we don't have fair standards for all, and that's my concern. Councilman DiCicco.
Thank you, Madam Chair. My final question. In the pool of people, I think it was 130 or 135,000 people who fall into that category of delinquent, default, what-have-you?
How many of those customers have received shutoff notices? 65 04/07/04 - FINANCE- BILL 040153
I would say based on what I know about the timing of this, a vast majority have already. And we will be notifying the remainder over the next week or so.
Of those that have already been given shutoff notices, how many of those actually have had a shutoff occur?
I'd have to get you that because it's changing by the day. In some respects, we have just begun the actual turnoff because we are restricted -- for example, we can't turn off today because tomorrow is a holiday. I can get you that number. We have started to shut them off. Mr. Clark tells me 50,000 of the 130,000 have been notified and we are shutting off 4,500 a week.
The Chair recognizes Councilman Nutter. 66 04/07/04 - FINANCE- BILL 040153
Thank you, Madam Chair. Mr. Knudsen, at a previous hearing, maybe it was two weeks ago now, either in Finance or in Transportation and Public Utilities where we had back-to-back hearings, I asked you about the longer-term prospect of the company and its current operations, and more a statement than a question, that at least from my perspective we can't continue to run PGW the way that it has been. This is not a commentary on your leadership at the company. It's really more about the financial situation that the company finds itself in, the inability to control some factors that affect the company and whatever its ability is to control other factors that should be within its control. Earlier today in the Fiscal Stability hearing, I formally asked the Finance Director, Ms. Davis, and the Mayor's Chief of Staff, Ms. Wilkerson, to look into utilizing both the PFMC Board, the financial advisors for PGW, the Finance Office, and the 67 04/07/04 - FINANCE- BILL 040153 prospect of any other advisory consultants to come back to us with a plan of options that would show both the financial and managerial turnaround within the next three to five years, taking into account the social issues that we're faced with because the easier or even less brilliant options would be, well, why don't we just get out of the business. We could turn it over to someone else, take it back into the City. But I don't necessarily know that that option serves all of our interests. It's not in our interest to have people without gas. It's not in our interest to have people forced out of their homes because they don't have gas because now we're going to run the company in a particular way. So how do you deal with the social cost issues and other goals that we have as a humane government, the financial impact to the City of Philadelphia, the potential loss of the $18 million, the potential non-repayment of the $45 million, a billion dollars in debt that the company is having, the employees who 68 04/07/04 - FINANCE- BILL 040153 have their own union, their own pension plan, their own work rules, and a whole series of issues? So now I'd like to formally ask you if you would join in with the Director of Finance and the Mayor's Chief of Staff in a cooperative effort to try to get an answer to the question. What I posed to you two weeks ago is that we can't continue to do what we do. Today, the conversation was, why are we in this business as a municipal government? And comparing Philadelphia to places like Pittsburgh, Boston, New York or other major cities in the northeast corridor who are faced with the same climate issues, variations in gas prices -- most of whom I believe are not owners of gas companies or gas utilities -- how do they insure that their citizens are not forced out of their homes or dying in the street or have all of these other scenarios? Can you give your perspective on your participation in such an effort to get to these issues? 69 04/07/04 - FINANCE- BILL 040153
Councilman, I'd be pleased to join that kind of an effort. It certainly is the single most important question before PGW right now. I'd be pleased to join that effort.
I greatly appreciate it. Now, you may have responded to this earlier. I know you made reference to $150 million in response to one of my colleague's questions. Unfortunately, I didn't hear the question. I only heard the answer. What's the $150 million that you were responding to? You said it was 135 for residential and 15 for commercial.
At about percent or 18 20 percent of our total revenues or our total 19 costs, we have a transference from those who pay to those who don't pay. I was using the example of $150 million. I was indicating that about 10 percent of the problem that we have is of a commercial nature and 90 percent or so is residential.
Let's run 70 04/07/04 - FINANCE- BILL 040153 through some numbers. What are your total revenues?
And what is the split of the 800 between commercial and residential?
It's about $40 million commercial and the balance is residential.
Yes. I'm going to confirm all of these, but for purposes of conversation --
Are there any industry standards on -- I mean, that seems to be a tremendously disproportionate relationship. Or is that the norm?
No. No. No. Going back to your earlier question of what cities have in terms of revenue bases, most of the investor-owned utilities for these large metropolitan areas incorporate substantial industrial, large commercial, as well as 71 04/07/04 - FINANCE- BILL 040153 residential, both suburban and urban. And therefore, they are able to absorb some of the social issues, social costs that we cannot. Our commercial and industrial load is relatively quite small relative to some of the other utilities. There's just no question of that.
Because we don't have gas consuming industries left in Philadelphia. We have about 500 major consumers of our interruptible rate, and the rest of them are small commercials, as we've just been talking, which are largely small establishments or landlord/tenant situations.
Forgive my lack of information on this area, but how are all these larger commercial or industrial entities heating their buildings?
They may be using gas, but there aren't that many, is my point. Relative to the size of the residential load, we provide the heat for 80 percent of the residential customers of Philadelphia. 72 04/07/04 - FINANCE- BILL 040153
In terms of bills, what's the outstanding at the moment uncollected revenue for the company?
Our net receivable right now is about $260 million coming off the winter. Understand that that will fall now as we come through May and June.
Because people are now paying bills. They're paying their February, March bills in April, May, June.
No. But people who incurred their costs in March are billed on the 1st of April. They have until the end of April.
What again would you estimate the split to be on the 260 between residential and commercial?
I don't know offhand 73 04/07/04 - FINANCE- BILL 040153 right now. I haven't looked at the numbers.
In your testimony from last week, my recollection is that you're now saying that you went from 92 percent collectable on the dollar to 87?
And what's the split again between residential and commercial customers in terms of percentage of paying?
There the problem is about 10 percent of the problem. Presumably out of that 5 percentage points, a half a percent would be commercial.
Now, I don't want to reopen this discussion, so just give me the really short version of the answer. Why is PHA on a commercial rate?
It's not. The precedent for this was established some years ago when we had our rate case. There was no 74 04/07/04 - FINANCE- BILL 040153 intervention for PHA to change the way they were so designated and it simply came forward into our present tariff. As I've indicated to the Chairwoman we'd be happy to help PHA straighten out whatever it feels its inequities are right now. We can't do that alone. We have to go to the PUC to do that.
Now, the programs that we have, say the CRP -- what's that, Customer Responsibility Program?
When you come in to get your service, does someone tell you about this program, that it exists, or do you just have to know that it exists and you ask someone about it? How does that work?
Well, there is both some notification through our customer 75 04/07/04 - FINANCE- BILL 040153 communications of one sort or another. But there's also, when people call in for an arrangement, the conversation quickly goes to income levels and then it can either go to a CRP discussion or it may go to a regular arrangement.
How do you determine whether someone is eligible for the program?
What do you have to present? Is this an in-person interview or over the phone?
Well, they have to come into one of our DOs to qualify. They have to bring appropriate documentation in.
Okay. So you come in. What information do you have to have?
Pay stubs, tax returns 76 04/07/04 - FINANCE- BILL 040153 if you have them, indications of social security, something that will establish your --
As the person conducting the interview, do they make the determination or does it go to someone else?
No. It would be determined between our customer service reps to take this information and act on it.
Then my last question will be -- go back to the start of this. Do you have any sense, Mr. Knudsen, on how long it would take to have this options plan put together that would give us, for lack of better words, a bit of a menu that we might be able to -- or series of options that we might be able to pick from in terms of putting in place a PGW that serves customers well, is functional, doesn't negatively impact the citizens or the City of Philadelphia financially?
We're in the midst right now of putting our budgets together in our Five-Year Plan. We can thread these 77 04/07/04 - FINANCE- BILL 040153 options on top of it, so I would say a matter of months. We can give you a quick look at something shorter, but something more comprehensive would take us a couple months yet.
I'd greatly appreciate it if you forward it to the Chair. As I said a couple weeks ago, I don't think we can just keep doing what we're doing.
I agree. And part of this discussion, I think, is a necessary one. And my proposed clause, I think, brought some of these problems to the floor and I'm glad of that.
Mr. Knudsen, I honestly, believe it or not, I really feel bad about having to have this exchange that we have. You just said something that makes me feel that you accept the comments that we make to you, so I don't really feel as bad as I 78 04/07/04 - FINANCE- BILL 040153 thought I would because it's tough for you to sit there and hear criticism. And some, it's justified; Most of it. What I wanted to ask you, can you describe any effort -- and I know three years ago -- I checked my notes -- I suggested that possibly your fleet management and the City Fleet Management talk. I checked with a person that I think is reliable in our Fleet Management and asked, was any significant effort made to really work together, to buy together, to pool resources. Can you just describe, using that as an example, of how many efforts have been made to really try to buy smart by combining buying power, to use Fleet Management to do some of the work that maybe you send out? Where are you with some of these joint efforts? Because I was told by Fleet Management -- again, a reliable source -- that they don't know of any effort ever to get together.
Councilman, the only 79 04/07/04 - FINANCE- BILL 040153 thing I can report back on that specific issue -- I believe you and I spoke about that at one of the affairs a couple of years ago, and I immediately asked our director of transportation, materials management and building services, Joanne Nunez (ph), to contact Reilly -- and I apologize. I can't remember --
I understand that. Reilly and Joanne had a conversation on a number of fronts, and the feedback that I got was that they didn't see that there were synergies there that would really save money.
Well, that's the response that I got. I didn't get into the details as to why that was decided by those two.
I'm sorry neither of us can do that. But I can report that we did 80 04/07/04 - FINANCE- BILL 040153 have the contact. I just can't --
To save time, could we really sincerely revisit it? Because you have construction equipment. The City of Philadelphia, the Water Department has vehicles very similar to what you do. I'm not suggesting we collapse your vehicle maintenance, but I feel that both of you do hydraulics, that there's a way that you could get together and maybe both save some money. I know there's turf over there, and you've got to get beyond the turf.
I will call the Deputy Managing Director of Fleet Management, Jimmy Muller and ask him to -- how about if I start off by asking him to give you call?
Thank you. Because both of you do a great job, and I think together you could even do a better one. That is an area that I think you would really do well. 81 04/07/04 - FINANCE- BILL 040153
If it is acceptable to Members of the Committee, a recess is requested since we have to go back into further discussion requested around the cars issue that Councilman DiCicco raised, the PHA issue I raised and also the issue of where we are on the report, where we are with the issue of collecting money aggressively so that, hopefully, we don't have to do a surcharge. Councilman Cohen, you wanted to speak before we recessed?
Was there any discussion today about Tom Ferrick's column in the Inquirer? I was wondering what you thought about his analysis of the situation. He has a column this morning indicating that there's nothing new about the idea because basically it was built into every rate base, the factor of whether a certain number of people will not be paying their bills, paying their bills or paying them on time. So already customers are now paying for 82 04/07/04 - FINANCE- BILL 040153 the expected default of certain people, and that this seems to be a second level of payment by the good payers against those who could not pay.
Councilman, we just recently had that conversation, and I thought the piece of Mr. Ferrick's article that dealt with the substance of PGW's questions and issues was right on. Yes. In fact, in base rates as we just discussed there is a major provision for costs that are essentially transfers from those who pay to those who don't pay.
So you basically agree with his analysis that this would be a second level of payment by good paying customers to make up for those that are not good paying customers?
Did you agree further with his final conclusion that the incident he referred to was an indication of mismanagement that he believed has existed at PGW a long, long time, long before your 83 04/07/04 - FINANCE- BILL 040153 involvement apparently?
Councilman, we take 1,750,000 calls a year. It is impossible for us to be perfect. So there will be incidences of -- regrettable incidences, I would say, of people who have a problem. But we try very hard to make sure that that is at the absolute minimum. I know of no utility that can deliver flawless service. In this instance, there was a customer who was unhappy, and I understand that.
Do you have any figures on the number of calls that the Philadelphia Electric Company, PECO, gets?
I don't know, sir. They're substantially larger than we, so I don't know, but I could call there and find out for you.
Because it would be interesting to see whether the level of calls is roughly equal, where they get more or we get more, and if so, why. I suspect that we may get more and I'm wondering why. And I'm wondering how our collection rate agrees 84 04/07/04 - FINANCE- BILL 040153 with that of PECO. Apparently, your statement last week was that the collection rate of PGW is about the same as the City of Philadelphia generally. Is that right?
You used a figure of or percent, or 88 cents on the dollar, 8 and I think the testimony was, if that was the 9 case for the City as a whole, then, yes, we 10 were consistent with that. 11
Do you think the 12 Water Department gets more service and more help in the City of Philadelphia than the gas?
Do you have any idea how you benefited -- for example, if the City of Philadelphia took over the Gas Works and you became like the Water Department, the Gas Department or a part of a utility department, do you have any thoughts on that matter? 85 04/07/04 - FINANCE- BILL 040153
Well, as I indicated to you in testimony last week, were that conversion to take place, the problems would be the same and the financial obligations would essentially remain. I don't know how you would pass to someone else the obligations for a billion dollars' worth of debt. So the essence of PGW would have to continue. It's gas through a pipe to a burner tip and a bill 11 that gets paid. That's the business. It's very simple.
Well, it's not really that simple, is it? Becasue you seem to be determined -- and the whole emphasis is the desire for PGW to be recognized by the Association Utilities. It seems to be very important for you and PGW to feel it's recognized as a utility rather than look at the problems as a municipal utility. Don't you think that your relation to the City taxpayers and City residents might be different than that of a for-profit utility? It's a different kind of utility. Because I gather you were very proud of the 86 04/07/04 - FINANCE- BILL 040153 fact that you believe that PGW's finally getting recognized as a utility and not as a City utility, but as a utility. That was somewhat troublesome because I don't know that it's Philadelphia business to run utilities. I know it is the business of Philadelphia to provide services. And in connection with providing services I think as a municipality, Philadelphia has a greater responsibility than a private company. Philadelphia has a responsibility as the owner to see that the needs of Philadelphians are met. Now, they may have a greater responsibility for the so-called social aspect of the rate. The fact that some people can't pay, the fact you have to have different rates for people in the lower income than a private utility may be concerned about because it essentially is a business, but this is much more than a business. And I'm wondering under those circumstances, what do we gain by being a separate utility or seeking recognition from other utilities? I don't think that's anything to be working toward. I think what 87 04/07/04 - FINANCE- BILL 040153 we want to work toward is that Philadelphians feel proud about having ownership of this Gas Works and finding a special good out of the fact that it's City-owned. And yet I felt you were rejecting that. You wanted to be recognized as a utility. That may be the reason why there are differences in the way in which the City treats employees who work for this so-called utility as against City workers. So I'm concerned that your emphasis on the utility recognition rather than on the acceptance of responsibility as a City-owned organization that you have a very special responsibility to the taxpayers of Philadelphia.
Well, let me directly answer that question. There is no question in my mind that this is a municipal utility, that we have special responsibilities to meet the needs of the citizen customer owners of this utility. That's very much in the forefront in my mind. Now, that being said, we operate in 88 04/07/04 - FINANCE- BILL 040153 a real world. We are part of the American Public Gas Association. We are the largest member of a group of 600 municipal utilities, and we work with this group, for example, on getting LIHEAP funding. We were able to use our offices with this group to bring some political pressure on Washington to get the amount of the potential appropriation increased from a billion eight or nine now to a potential 3.4 billion. It helps us to be part of an organization that can bring leverage on a group in Washington. That's the kind of connection that we look for as being members -- being a utility identified as a utilitya but in a municipal context with fellow or sister utilities across the country, sister and brother municipality utilities across the country.
Well, aren't there other municipal utilities, other municipalities that furnish gas services?
Is there an association of those? 89 04/07/04 - FINANCE- BILL 040153
That's what I'm saying. That's the reference that I'm making. There are 600 municipal utilities of various sizes of which we are the largest.
Now, in your testimony last week, were you talking only of utilities that were municipal utilities when you indicated you were being recognized?
No. Again, we operate in the real world. As a utility, we have very specific requirements, federal requirements, local requirements. We are part of the State PUC function. They will not -- they deal with us as an identifiable utility of record with specific processes and procedures that they will oversee. Now, we are within the municipal structure which causes a lot of this -- it causes a lot of confusion with many of the groups in Harrisburg because they haven't dealt with somebody that looks like us, but we're trying to get through all that. But in those instances, it also helps us to be make common cause with some of the other 90 04/07/04 - FINANCE- BILL 040153 investor-owned utilities in Pennsylvania because our problems are the same and the administrators of these issues are the same for us all, and we would like some of these problems solved.
Are you in an executive position with PGW at the time the PUC took over control from the Gas Commission?
I was part of the administration of the PGW at the time which was July of 2000. I was not part of that group when the decision was made in 1999 to so do.
Because I think one of the real problem with the Gas Works is this separation that seems to exist between PGW and rest of the City. For example, the Mayor would not have as much a hands-off position on the operation of PGW if it's a separate municipal utility as you would have in guiding the rest of the departments. And it seems to me, even though I may frequently disagree with the Mayor, nonetheless I think it would be good if the same kind of concern 91 04/07/04 - FINANCE- BILL 040153 were expressed by this Mayor and other past mayors about PGW. It seems to me that mayors historically have taken advantage of the fact that they claim PGW is a separate company and therefore they don't need to worry about it as long as they get their $18 million for the Gneral Fund. And I wonder how that compares to the contribution the Water Department makes and why don't we get the same kind of sense about the Water Department. What's so different between the Water Department and the Gas Department that justifies the City owning and operating one and not the other?
Well, to answer the first part of your question, I don't remember in my years of exposure both as a 18 consultant to community legal services and then as an executive of this company, I don't remember an administration being more involved, more caring about where this company is headed and how it gets there than this Administration. Both Ms. Wilkerson and Ms. Davis sit our on our Board of Directors. We meet regularly. 92 04/07/04 - FINANCE- BILL 040153
Well, that's because your current financial position which has lasted the number of years you've been in it and probably for some period before you took over as Chief Executive Officer. You've been on life support all through the last four or five six years, haven't you?
Well, as you said to you at the outset of these hearings, were it not for that gas costs increased 300 percent of a three-year period, we were on target to deliver this utility into some state of solvency and we were going to be able to pay the 45 million off and keep paying million 16 and still not borrow ourselves blind. The 17 fact that bills for customers went up 60 18 percent over two years has laid us low, and that's why we're here. But to come back to your point about this Administration, whether we were in extremists or whatever word you want to use, this Administration has been very attentive to the needs and certainly responsive to any --
Other than in the 93 04/07/04 - FINANCE- BILL 040153 physician area?
Oh, absolutely. They're very supportive of all of our policies, whether it's the extent to which we putmains in the ground to how we treat our customers. They were very instrumental in the initial initiatives that we undertook to assure that customer service improved so materially as it did, very involved. We were meeting weekly for many months
If I may, gentleman. We still have to get to the rest of our Capital Budget hearings today. We are going to continue this discussion, if it's okay, Councilman. We did mention three issues that were raised: One being cars, one being PHA rate, and the other being the rate of money collected by the company in terms of the surcharge, which none of us really wants, but at any rate... So we would like to recess this subject to the call of the Chair. But the President is asking everybody stay put so that we can begin the rest of our hearing 94 04/07/04 - FINANCE- BILL 040153 immediately, our Capital hearing. (Council adjourned at 3:55 p.m.) - - - - 95 C E R T I F I C A T I O N I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of Wednesday, April 7, 2004, were reported fully and accurately by me, and that this is a correct transcript of the same. RE: COMMITTEE ON FINANCE _________________________ Lisa C. Bradley, RPR