COMMITTEE ON TRANSPORTATION AND PUBLIC UTILITIES, June 2, 2026

COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON TRANSPORTATION AND PUBLIC UTILITIES Room 400, City Hall Philadelphia, Pennsylvania Tuesday, June 2, 2026 2:28 p.m. PRESENT: COUNCILMAN MICHAEL DRISCOLL, CHAIR COUNCILMAN JEFFREY J. YOUNG, JR., VICE-CHAIR COUNCILWOMAN KENDRA BROOKS COUNCILMAN CURTIS J. JONES, JR. COUNCILMAN ANTHONY PHILLIPS

COUNCILWOMAN NINA AHMAD

251020, 251021, 260426, 260427 260428, 260431, 260464 - - -

And now that the hour's come, Ms. McDonald, will you please call the roll to take attendance. Members in attendance, will you please indicate that you're present when your name is called.

Councilmember Brooks.

Present.

Councilmember Jones.

Present.

Councilmember Phillips.

Present.

Councilmember Squilla.

Present.

Vice-Chair Young. (No response.)

Chair Driscoll.

Present. Thank you. A quorum of the Committee is present and this hearing is now called to order. This is the public hearing of the Committee on Transportation and Public Utilities regarding Bill 13 Nos. 251020, 251021, 260426, 260427, 260464, 260431, 260428. Ms. McDonald, will you please read the titles of these bills.

Bill No. 19 251020, an ordinance amending Section 19-1604 of The Philadelphia Code, entitled “Charges Where Water Meter Has Become Defective,” by authorizing the reduction of customer water bills due to defective or inaccurate water meters, under certain terms and conditions. Bill No. 251021, an ordinance amending Chapter 19-1600 of The Philadelphia Code, entitled “Water and Sewer Rents,” by revising income eligibility standards for rate discounts and installment payment agreements, all under certain terms and conditions. Bill No. 260426, an ordinance authorizing the Director of Aviation, on behalf of the City of Philadelphia, to modify a certain easement and acquire additional easement interests in connection with a portion of the parcel or parcels of land commonly known as 8350 Executive Avenue, under certain terms and conditions. Bill No. 260427, an ordinance authorizing the Director of the Department of Aviation to acquire, on behalf of the City, fee simple title or a lesser interest by purchase, amicable negotiation, dedication, donation, condemnation, agreement in lieu of condemnation or otherwise, in and to all or portions of a certain parcel of land known as 8800 Tinicum Boulevard in Philadelphia County, under certain terms and conditions. Bill No. 260464, an ordinance authorizing the Procurement Department, on behalf of the City of Philadelphia, to enter into an agreement with the Philadelphia Energy Authority to purchase electricity and certain attributes and benefits related to the generation of such electricity from a solar energy facility to be built and owned by Reactivate, LLC, located at Northeast Philadelphia Airport for use at and in connection with City facilities, all under certain terms and conditions. Bill No. 260431, an ordinance authorizing the Procurement Commissioner, on behalf of the City, to enter into a concession agreement with Positive Energy Inc. for the procurement, construction, installation, operation, and maintenance of Direct Current Fast Chargers in the cell phone lot at Philadelphia International Airport, under certain terms and conditions. And Bill No. 260428, an ordinance authorizing the Office of Transportation and Infrastructure Systems and the Procurement Commissioner, on behalf of the City, to execute separate multi- year concession agreements with It's Electric Inc. and Positive Energy Inc. in connection with a City electric vehicle charging program to site, design, install, own, operate and maintain a network of publicly available electric vehicle charging stations throughout the City at curbside locations and surface parking lots; amending Chapter 11-604 of The Philadelphia Code, entitled “Encroachments Upon and Obstructions of the Street” to provide for discontinued approval of Electric Vehicle Charger encroachments; and amending Title 12 , entitled “Traffic Code,” to authorize the installation, use, administration and enforcement of electric vehicle parking spaces, provide for administrative enforcement of violations of electric vehicle parking violations, including camera-based enforcement and towing, all under certain terms and conditions.

Before we begin, I would like to acknowledge Councilmember Ahmad for brief remarks on Bill No. 260431.

Thank you, Chair Driscoll, for having me and for convening this hearing and yielding the floor to me. I understand the committee has a full agenda so I will be brief. As our world moves towards more sustainable and green practices, I believe it is vital that our city keeps up. 60% of Philadelphia's pollution comes from vehicles, which is why as a Councilmember who represents the entire city, I have taken a particular interest in advancing electric vehicle accessibility for our residents and visitors. That is why I was proud to introduce Bill No. 260431 on behalf of Council President Johnson. If enacted, this legislation would authorize the installation and maintenance of direct current fast chargers in the cell phone lot at Philadelphia International Airport. Simply put, this bill will provide Philadelphia airport passengers, ride-share companies and the general public with new fast electric vehicle chargers capable of charging up to eight vehicles at once in just 30 minutes. This legislation is a significant milestone towards Philadelphia International Airport's goal of achieving carbon neutrality by 2050 and is particularly critical, given our airport guests in particular needing to be able to rely on a fast, efficient charge so they can catch a flight on time or wherever they need to go. I'm also interested in hearing how we are going to include diverse and small subcontractors in this 10-year deal. I would like to hear that. I'm sure that will be in the testimony coming up, because I think this is an opportunity in the years to really also build 9 our business infrastructure and to 10 really have sustainability in that sector as well. As the Chair of the Public Health Committee, I am committed to accelerating the transition to electric vehicles, and this legislation marks a critical step forward in democratizing electric vehicles for residents and visitors alike right here in Philadelphia. Thank you, Chair Driscoll, and members of this committee. I urge my colleagues to support the bill and I yield back the floor.

Thank you, Councilmember. Thank you for your work on that bill. At this time, I'd also like to recognize Councilmember Gauthier on Bill No. 251021.

Thank you so much, Mr. Chair. Good afternoon to everyone, especially members of the committee, in particular, those of you who have cosponsored this legislation, Chairman Driscoll, Councilmember Phillips, Leader Brooks and Councilmember Squilla. Water is a basic human right and we are lucky to live in a city where our water system belongs to taxpayers, not corporate interest. 5% is slated for this fall. And in PWD's own budget testimony, the department said one of the reasons for these increases was to pay for the growth of the Tiered Assistance Program. This means that every customer is already paying for tax expansion for working families. Rising water rates means pinching pennies just to pay the bills. And for those already beyond their means, it means dry pipes. Every Philadelphian deserves water and that's why last November, I introduced Just Water. The legislation before this committee today expands the Tiered Assistance Program to families earning up to 200% of the federal poverty level, working families who are currently locked out of any water assistance at all, and it finally codifies the shared responsibility policy that PWD announced back in 2013 but never put into regulation and quietly walked away from for too long. This city has held residents accountable for fault in government infrastructure. Take, for example, my constituent Alexandra, when she closed on her new home in the 3rd Council District. The Water Department reported an actual meter reading and promised her water bill was accurate. Months later after upgrading her meter at PWD's recommendation, Alexandra was hit with an $8,000 bill, even though PWD told her otherwise. They reversed course and said the old meter in Alexandra's home had not been transmitting information for eight years. As the new owner of the home, the city told Alexandra that she is responsible for coming up with 8 grand, even though she did everything right. And there is Elva McGraw, a retired Philadelphia school teacher and two-time stroke survivor. Her daughter pays every water bill in cash in person with a receipt. In 2025 alone, the family paid $740 against $451 in actual charges. 90. Almost $293 just disappeared when the family asked PWD to inspect the meter. The department refused. You will hear directly from her daughter Gigi today. Let me be clear, the City of Philadelphia is responsible for these injustices, for making water unaffordable and we have chosen to let these policy failures continue for years. I want to address head-on what the Administration will tell this committee today because their central argument is going to be cost. 5 million, but they have refused my request to show how they reached that number. And I'd like to add that I've asked that request privately over a series of many, many months and still that information was not supplied to my office. 67 million phased out over several years. Additionally, when PWD estimates cost, it ignores benefits. Programs that help our PWD water customers pay their water bills also help PWD's bottom line. You will hear more about this from CLS today. I want to thank my co-sponsors, again Chairman Driscoll, Leader Brooks, Minority Whip O'Rourke, Councilmember Phillips, Councilmember Landau, Councilmember Lozada, Councilmember Harrity and Councilmember Squilla. I also want to thank members of this committee and Community Legal Services for their partnership on this work. This committee has a choice. We can wait for another rate hike, another inflated bill, another Philadelphian forced to choose between paying for water and paying their rent or we can act. I also want -- obviously, the committee will make its own decisions, but we have been working to try to come to agreement with the Administration on this for many, many months.

Not only did we back off of a March hearing we originally wanted to have to try to come to agreement and understand the fiscal note, we waited several weeks to schedule a meeting with a large amount of people from the administration. And when we arrived to that meeting, there was still not sufficient information for how the numbers in the fiscal note were derived. And so, I hope that we make a choice today that will help the many, many people in Philadelphia who are struggling with their utilities. Not only has my office acted in good faith over a series of months, not only has our partner CLS put a ton of work that I will stand behind into this project, delaying further is not about a Council office or a partner. It's about the residents of Philadelphia who deserve relief, particularly if everyone behind this project has been acting in good faith, and often times giving more time and more information than Council is even given as it relates to the $7 billion budget process. So I feel good about what we put in front of the committee and I hope that we're able to have a fair and extensive deliberation today. Thank you so much.

Thank you, Councilmember. Ms. McDonald, will you please call the first panel we have to testify this afternoon on Bill 18 251020.

Benjamin Jewell, Commissioner for the Philadelphia Water Department; and Kathleen McColgan, Commissioner for the Department of Revenue. (Witnesses approached witness table.)

Good afternoon. COMMISSIONER JEWELL: Good afternoon. COMMISSIONER McCOLGAN: Good afternoon.

Whoever wants to start, please state your name for the record and proceed. COMMISSIONER JEWELL: Good afternoon. Benjamin Jewell, Commissioner for the Philadelphia Water Department.

Welcome, Commissioners. COMMISSIONER McCOLGAN: Kathleen McColgan, Revenue Commissioner. Good afternoon. COMMISSIONER JEWELL: Good afternoon, Chairman Driscoll and members of the Committee of Transportation and Public Utilities. We appear before you today to testify in support of Bill 3 No. 251020, authorizing the reduction of customer water bills due to defective or inaccurate water meters, under certain terms and conditions. We are grateful to Councilmember Gauthier for introducing this bill, as we continuously strive to improve service for our water customers. Water metering technology has evolved significantly over the last century. We have come a far way since the early 20th century when water meter readers visited homes in person to record customer usage and from the 1990s, when trucks traveled up and down every street in the city to capture customer usage data remotely on a monthly basis. The city recently undertook a generational water meter technology upgrade, which we refer to as AMI or Advanced Metering Infrastructure. In this current system, dozens of receivers are stationed around the city and the data transmitters on the meters send usage readings every hour. With each advancement in technology, we've been able to much more quickly catch and address any problems with the meter or its components and identify issues inside our customers' homes, such as a running toilet or other plumbing leak. Our AMI installation is 97% complete and we are receiving actual reads from greater than 99% of those new meters, which will substantially reduce estimated bills. While PWD and Revenue are striving for 100% actual meter reads, with over 500,000 water customers across the city, we recognize that occasional issues will still arise. When they do, some customers may experience unusually large bills, and it's important that we address those situations consistently and equitably. For customers who continue to receive estimated reads or actual high reads, the Philadelphia Water Department and Water Revenue Bureau are working together, as we have for decades, to identify these situations in a timely manner to intervene as quickly as possible and before a large balance is accumulated. The Department of Revenue has been responsive to billing challenges when there are zero or estimated meter readings for decades and have made improvements to how we communicate with our customers when there are irregularities in their water usage. In 2004, the Revenue Bureau issued a policy for adjusting accounts with zero usage due to faulty transmitters or batteries. This was attached to our testimony called Adjustments of Accounts due to Faulty ERTs or Battery Problems. The policy provided for a billing adjustment when the zero usage exceeded 12 months. In 2012, the Water Department and Water Revenue Bureau issued a revised policy for zero usage accounts, also attached to the testimony. The policy provided adjustments to accounts who had received bills that reflected zero usage for more than four or more consecutive months. These customers were provided with a letter notifying them of the zero usage. And if they contacted Water Revenue within 30 days of the letter, the customer was provided with a penalty waiver. And in cases where the zero usage continued for more than one year, a billing adjustment. In 2023, the departments revised the policy again to allow for customers who received not only bills that reflected zero usage but also bills that reflected estimated usage. To alert customers to potential meter issues sooner, in 2022 the Water Revenue Bureau began sending customers notifications via email and/or mail when unusually high or zero usage was noted on their account. In 2024, the Water Revenue Bureau updated the water bills to have large red call-out boxes, further indicating estimated or zero reading bills. The redesign bills also detect direct customers to contact the meter shop to schedule an appointment.

We've included examples of these bills with the testimony. The call-out boxes are located at the top of the bill and next to the usage graph. We also began sending mailed notices to customers who have received estimated or zero readings for three months consecutively in addition to the regular bill. The Water Department and Water Revenue Bureau continue to explore improvements to the policy and billing procedures to more proactively meet our customers' needs, while ensuring consistent and fair billing practices. Thank you again for the opportunity to testify today. We are happy to take any questions.

Commissioner, state your name for the record and we'll do questions after you do your testimony. COMMISSIONER McCOLGAN: Sure. My name is Kathleen McColgan, Revenue Commissioner.

Please proceed. COMMISSIONER JEWELL: It was joint testimony.

I like that. All right. Well, members, do we have any questions? Member Phillips.

Thank you. I want to thank Councilmember Gauthier and her office for working on a very important topic around supporting residents with their water bills. Thank you, Commissioner, for being here today, also both Commissioners for being here today. First question I have is, I would like to discuss the significant difference between the Administration's fiscal estimate and estimate prepared by Community Legal Services. The Administration projects that the annual TAP discount will cost --

Member Phillips, that's the next bill.

That's --

That's okay.

I'll come back --

Just hold that question until --

I thought he was doing it for all of them. That's okay. I'll come back.

If you don't mind.

No 2 problem. Thank you.

All right. So hearing no further questions on this bill --

No, thank you. I just wanted to make clear for the record that I definitely understand the importance of this bill. That's all. Thank you.

Okay. As there are no further questions, Ms. McDonald, will you please call the second panel we have to testify this afternoon on Bill No. 251020.

Robert Ballenger, Divisional Supervising Attorney for Community Legal Services Energy Unit; and Gigi McGraw. (Witnesses approached witness table.)

Good afternoon. Please state your name for the record and proceed with your testimony. COMMISSIONER McCOLGAN: Good afternoon, Chairman Driscoll and members of the Committee on Transportation and Public Utilities. My name is Robert Ballenger and I'm an attorney at Community Legal Services, where the majority of my work involves assisting low- and moderate-income families with maintaining affordable access to essential utilities, including water and wastewater service. I've submitted written testimony on Bill 251020. And on behalf of CLS's clients, I want to express my gratitude to Councilmember Gauthier and her staff for advancing this measure. Before I offer my comments on this specific legislation, I want to reiterate my prior testimony to this committee, that the city can and should grant additional capital dollars to PWD for construction projects to reduce its need to borrow funds, which ultimately must be repaid through higher rates. PWD's capital spending needs are tremendous and represent a significant risk to the long-term affordability of water in Philadelphia. CLS supports Bill 14 251020 as it would address the current unmet need that our clients experience. We've had clients come in with large makeup bills because of either a defective meter or bad information that was associated with a prior meter or a zero meter reading over an extended period of time. Often the customers are shocked to find such a huge water debt in their name and associated with their property and don't know where to turn for assistance. In our experience representing some of those clients, we do have to on some occasions even go all the way to the Tax Review Board to get the kinds of adjustments that PWD has, by policy, committed to providing. It's infrequent, but it does happen. And I think these regulations are a really important way to ensure consistency in handling makeup bills in situations where there's been a faulty meter, and also avoid the necessity of someone to really panic and have to search around for resources to help when the city has the means to provide equitable relief to them. So we really strongly support having this bill move forward and engaging in the regulatory process. As I've said, policies are great, regulations are enforceable and that means that customers can rely on those regulations to get the adjustments that are provided for. Thank you very much for your consideration of my testimony. I'm happy to answer any questions you may have. MS. McGRAW: Good afternoon, Councilmembers. My name is Gigi McGraw, and I am here today on behalf of my mother Elva McGraw, a retired Philadelphia school teacher, a senior citizen and a two-time stroke survivor. I am testifying in support of Bills 251020 and 251021. Because what has happened to my mother is exactly the kind of harm these bills are designed to stop. For about four years, I have managed my mother's water account. I pay every bill in cash in person at the Water Department, so I am given a printed receipt as proof of payment. There are no 3 leaks in the home. A plumber has confirmed it more than once, and PWD has failed to address my request to inspect the water meter and still the bills do not add up. 29. $740 in cash was paid on the account. The payments were made on time, and I have receipts for every transaction. 71. 90 going into 2026. 81 has simply disappeared into the billing system. Unfortunately, this is not a new problem. In 2021 and 2022, my mother was receiving water bills upwards of $300 a month. It took the intervention of Councilmember Gauthier's office to get those bills reduced. Nothing about the household had changed, no new meter, no change in usage. The only thing that changed was that someone with authority asked PWD to explain itself. Every year since, a small balance reappears at year's end a few cents, a few dollars. Then without warning, it grows into an inflated bill that I have to fight to get corrected.

My mother should not need a Council office on speed dial to be billed accurately for the water she uses. That is why Bill 251020 matters. When a customer disputes a bill and asks PWD to inspect the meter, the department should be required to do so and the customer should not be held responsible for charges tied to a defective city- owned meter. Right now the burden falls entirely on the customer to prove something is wrong while PWD ignores the request. That is backwards. Bill 251021 matters, because seniors like my mother living on fixed retirement income are exactly who the Tiered Assistance Program is meant to protect. Expanding eligibility to 200% of the federal poverty level would bring real relief to households across our district who are one inflated bill away from falling behind. Again, I have every paper bill and every cash payment receipt and the numbers are in dispute. 98 each month, nearly $80, which indicates a standardized billing practice based on projected usage and not a true and accurate meter reading. This is not how billing should work. There seems to be a profound lack of oversight and to be honest, a lack of integrity and commitment to serve the customer fairly. Will the Water Department be held accountable to its own customers? Please find it in your heart to do what is right. I urge Council to pass both bills. Thank you so much for your time.

Member Phillips.

No 16 questions.

I hear no further questions for this panel, so we'll move on to Bill No. 20 251021. Ms. McDonald, will you please call the first panel we have to testify this afternoon on Bill 24 No. 251021.

Kathleen McColgan, Commissioner, Philadelphia Department of Revenue. (Witness approached witness table.)

Good afternoon. Please state your name for the record and proceed with your testimony. COMMISSIONER McCOLGAN: Good afternoon. Kathleen McColgan, Revenue Commissioner. Good afternoon, Chairperson Driscoll and members of the Committee on Transportation and Public Utilities. My name is Kathleen McColgan and I am the Commissioner of the Revenue Department. I'm here today to provide testimony on Bill No. 22 251021, introduced by Councilmember Gauthier. I'm joined today by representatives from both the Revenue and Water Departments. This bill would change the eligibility threshold for residential water customers to receive income-based discounted rates on their water bills and affordable payment plans. Attached to the testimony is the fiscal note for this legislation, which was produced using data from independent analysis done by our consultants Raftelis Financial Consultants and Black & Veatch. With regard to the income-based water rate assistance program or what we more commonly now call the Tiered Assistance Program, TAP, this bill would expand income eligibility from 150% of the federal poverty level to 200% of the federal poverty level. By increasing the income eligibility to 200% of the federal poverty level, more households would qualify for discounted rates and earned arrearage forgiveness. Finally, regarding affordable payment plans, this bill would expand income eligibility from 250% to 350% of the federal poverty level. The Water Department is financially supported nearly completely through the rates and charges paid by our customers for the services we provide. The Water Fund, which is an enterprise fund, supports the operations of the Philadelphia Water Department, including funding debt service payments necessary to support reinvestment in existing infrastructure and new investments to comply with current and emerging regulations. While we recognize the goal of increasing access to affordability programs, the proposed expansion would also have financial impacts for the Water Department and our customers. 6 million over the Five Year Plan. Most of this lost revenue comes from increasing the income eligibility requirements for TAP. We recognize this is a large range, but this range reflects the anticipated number of new TAP enrollees to be between 4000 and 40,000. S. Census data. The second consequence of this bill is that all non-TAP customers, which include all other residential customers, will see a rate increase. This is because the anticipated revenue loss to the Water Fund would need to be restored. Any expansion of the TAP population would further reduce the non-TAP population, increasing cost recovery pressures and amplifying rate impacts. Enrollment in the TAP program has grown significantly during the last three fiscal years, with program enrollment increasing over threefold, with an increase in participants from 18,000 to over 65,000 between Fiscal Year '23 and Fiscal Year '25. By way of comparison, PGW's customer responsibility program had 59,670 participants in Calendar Year 2024. During the same period of enrollment increases, the Water Fund experienced a collection shortfall of $36 million in FY24 and $23 million in FY25. After rate increases to account for the increased TAP participation and other rising costs, water collections have stabilized in Fiscal Year '26 and WRB anticipates reaching the annual revenue target. When water collections do not reach annual targets, there are no other revenue sources that can be adjusted to make up the difference. Instead PWD would need to make reductions to services, staffing or other planned infrastructure investments, which could affect the level of service provided to customers in order to maintain a balanced budget.

To recover the revenue lost from the continued success of our current TAP enrollment efforts, PWD filed an advance notice on February 17, '26 and a formal notice on March 19, '26 for TAP reconciliation to recover reduced collections for Fiscal Year '26 in the amount of million, a 8 projected discount for FY27 in the 9 amount of 53 million. 10 As part of its current 11 filing with the Water, Sewer and 12 Stormwater Rate Board, the 13 department projected that 70,000 14 residential customers will benefit from TAP during Fiscal Year '27 at a discount of $63 per customer per month. These additional costs from the increase in current TAP enrollment are shifted to all other customers who are not on TAP. 3% rate increase on their monthly bill. 89 per month. PWD estimates that balancing the revenue shortfall from this proposed bill would require an additional rate increase of up to $3 a month for non-TAP enrolled customers. 10 increase related to current increased TAP enrollment, plus up to an additional $3 per month associated with revenue impacts. 99 for non-TAP residential customers, on top of any expected future base rate increases. The department remains focused on balancing affordability for customers with the financial stability necessary to maintain essential water services. We recognize and support the important goal of expanding program enrollment. Given the current structure of the Water Fund however, any reduction in revenue must be offset elsewhere. And under the current rate model, those costs would be recovered from remaining taxpayers. I appreciate the opportunity to testify on Bill No. 19 251021 and I'm happy to answer the committee's questions.

Thank you for your testimony. Member Jones.

Thank you. A couple of questions. When you receive revenue for the Water Department, it doesn't go into our General Fund, correct? COMMISSIONER McCOLGAN: That's right. It's an enterprise fund. Right, it goes to a separate fund.

And based on that, when that was decided some time ago, there was to be every four years, as I recall it, audits of where and how those revenues are spent; is that correct? COMMISSIONER McCOLGAN: I'm sorry. Could you repeat the first part?

It's my understanding that when the deal was cut to not put water revenue in the General Fund, that in the law it says every four years there shall be an audit to see how those revenues and expenditures balance out? COMMISSIONER McCOLGAN: I am not sure about the audit. I'm going to see if we can get that answer for you.

So -- COMMISSIONER McCOLGAN: I think we'll need to get back to you on the audit.

All right. So what I'd like to know, if that is true, when was the last time an audit was done to look at where and how those expenditures have gone -- I understand the covenant. And what you said was that if we reduce revenues, you have to find revenues somewhere to replace it. But if there is an audit that shows that you can find that revenue in other ways, I think we as a committee should know that. COMMISSIONER McCOLGAN: Okay. Thank you for the question, Councilmember. We will get back to you on that.

Okay. I do appreciate that the Water Department during the COVID crisis did not cut anyone off; is that correct? COMMISSIONER McCOLGAN: That is correct.

So I want to tell you that we are grateful for that. But one of the things that I argued in these chambers to my colleagues was ALICE, Asset Limited, Income Constrained, and Employed, and that was the working poor. And that a lot of times programs in that middle class, working families middle class, were not -- so if you were in that category, you did not qualify for any of the support systems that you could get and if you're in that qualification too, you don't get any of the benefits of being in that top income echelon where that $9 a month won't even matter. So I struggle with this because I made those statements to you before. So this is something that we need to ponder. In particular, I want to know about the audits so that maybe there's a compromise that can be reached on where those makeup revenues come from. COMMISSIONER McCOLGAN: Okay. Thank you.

Thank you, Mr. Chairman.

I just want to note the presence of our Vice-Chair Jeffrey Jay Young. Member Young.

Thank you for your testimony on this. You mentioned that residential customers will potentially face an increase based on this legislation as well. Are we preempted in any way from having a separate commercial versus residential rate to offset some of these costs? COMMISSIONER McCOLGAN: I'm going to have Deputy Commissioner Susan Crosby come up and speak to that.

Good afternoon. Susan Crosby, Deputy Revenue Commissioner for Water. We currently do have a rate structure that is based on a meter size. And so, for commercial customers who have larger meters, they are charged a different rate. So our residential and small commercial customers have three-quarter-inch or one-inch meters, and they are charged a lower rate than the -- or millage, if you would, than the commercial meters that are used in the industry because of the nature of the size of their meters.

All right. So the answer is no then, right. If the argument is that we will see increases for residential customers who are of a little bit higher income then, right, why can't we just offset with changing the rates for our commercial customers so the residential customers aren't feeling that burden?

The adjustment for the TAP rate is spread against all residential customers who are not participants in the TAP and commercial customers. So it is spread against the entire rate base, excluding those who are in TAP.

Yeah. But could we spread that a little bit more on one side versus the other? That's the question.

As it's set now, the Water, Sewer and Stormwater Rate Board has set a calculation on how the cost recovery mechanism is done, how the cost recovery is calculated. And as a part of that calculation, it is spread across the users equally.

Most recently the Board mentioned that if this goes into effect, then they would have to change that anyway, right. So I think that's something that we should ponder, right. If they got to change their formulas anyway, right, if this were to go into place, if this were to go into effect, then I think that we should figure out what that calculation would be so it's less burdensome on our residential ratepayers and pass that on to the commercial customers. Thank you, Mr. Chair.

Member Phillips.

Thank you. While you hear, questions still along those lines. Commissioner, thank you so much. You recently said in your testimony that taken together, non-TAP residential customers could see a monthly increase that includes the $4.89 already approved by the Rate Board at $2.10, $3 additional money -- all of it would total $10, 9.99 for non-TAP residential customers to pay for this increase. Along the lines of Councilman Young, how did that number come about? And what would trigger the 9.99 increase in terms of how many more residents would have to take on TAP in order to trigger a 9.99 increase? Because if you said an additional 4000 customers could now be eligible for this, as a result is there going to be 2000 customers that's going to trigger the 9.99 or you're just going to automatically do it in anticipation? COMMISSIONER McCOLGAN: Yep. Thank you for the question. So I just want to break down what sums up the $9.99. So the $4.89 is a rate increase that's going to happen regardless. That's what every non-TAP customer will pay every month. That's already been approved by the Rate Board. So that's part of the $9.99. The $2.10 increase, that's also a component of the $9.99. It is an estimate that is expected to have to be paid by each customer monthly based on the existing TAP expansion, so those that we've enrolled recently. The $3 estimate, up to $3, is the potential cost that we're saying a non-TAP customer would need to incur if this legislation is passed, and that's also part of the $9.99. So that's the total of the three of those.

Understood. So the $2.10 is already going to be present with the current rate of enrollment? COMMISSIONER McCOLGAN: Yes.

You're saying that it would be an additional $3 per month associated with this as a -- COMMISSIONER McCOLGAN: Up to, yes. Based on enrollment.

So it seems the real problem is our residents are already going to see an increase of close to $7 anyway -- COMMISSIONER McCOLGAN: Yes.

-- right. And then you're going to have -- so technically, you're saying that this -- what would trigger $3 more? Is it once we get to the 4000 threshold or is it going to be, you know, if you get 4000 more customers in TAP, then you're going to put the rate up to $3 or you're automatically going to assume capacity for that already because you're expecting it to go up? COMMISSIONER McCOLGAN: So our fiscal note reflects our analysis, and the $3 per month for non-TAP customers, which is approximately 380,000 customers, that is assuming maximum enrollment. So that would be at the top tier of the $40,000 -- I mean, I'm sorry, the 40,000 people being enrolled, which is based on census data.

So if you don't get to maximum enrollment, that wouldn't happen, the $3? COMMISSIONER McCOLGAN: That's right -- well, it will increase some amount. That is the maximum amount per month.

So it could be $1, it could be $0.50? COMMISSIONER McCOLGAN: Right.

So until we meet maximum enrollment, it won't go up to $3? COMMISSIONER McCOLGAN: That's right.

I mean, it takes a little while to get to maximum enrollment. Okay. And I just also have another question. The Administration projects TAP discount costs ranging from approximately $2.4 million to $23.5 million while Community Legal Services estimates annual cost of approximately $2 million to $6 million. What particular assumptions account for the difference between these two organiza -- well, two entities? You all have two different analysis around this. COMMISSIONER McCOLGAN: Thank you for the question. So the difference is really based on different assumptions done in each analyses. So CLS assumed different enrollment rates, a specific enrollment rate, whereas our fiscal note shows a range of the 4000 to potentially 40,000. They also assumed a lower discount per month per customer as well as lower usage.

Okay, so you said they assumed a lower discount. And so, that's the reason why there's a discrepancy. COMMISSIONER McCOLGAN: That's why there's a discrepancy. Our analysis assumes a discount of approximately $45 per month per customer and we just recently learned, as part of the current rate case, that the projected discount is actually higher than that. It's $63 per month.

According to our data, the federal -- what I have here is the federal income rate -- poverty level rate, it would go from $23,000 for one person that would be eligible for TAP. $23,600 for FPL, federal poverty level, of 151%. And if it goes into 200%, it would be $31,300. I mean, you're still on a serious level of poverty if you go from $23,600 to 31,300. I mean, basically you're working poor or you're not working at all, or you're on a serious fixed income, if you have that. So I think the intent is important. How do we get there I think is a matter of the fact that, you know, I don't know if we have to increase people's water bills just to get to that level. And I just don't understand how you're getting to that number. If you could provide for the record even more details on how you got to the 23. You explained it, but I think I just want to see it visually. COMMISSIONER McCOLGAN: We have that for you.

Okay. COMMISSIONER McCOLGAN: We have that for you and we can provide that. And I also just wanted to mention, I know, Councilmember Gauthier, you said that you had requested it and didn't receive that. I apologize because it was my understanding that that was sent so there was a miscommunication, but we have that information available for you.

And I just have two more questions. What participation rate does the Administration expect in year 1, year and year following the acumen of this bill? And while eligibility is one measure, actual is often much lower than theoretical eligibility. So what are you anticipating? Have you done the numbers on who would probably sign up for this already? COMMISSIONER McCOLGAN: Understood. So we don't have projections by year. We just show the range by enrollment. So we have, for example, the cost. If there were 4000 enrollees broken out by -- 4000 enrollees, 10,000; 20,000; 30,000 and 40,000. So that's the information that we can provide to you.

Why does the Administration believe the upper end estimate of 40,000 participants is realistic? Are there comparable utility affordability programs, either in Philadelphia or elsewhere that have achieved enrollment rates consistent with that assumption? COMMISSIONER McCOLGAN: We can't predict what the enrollment rate would be, but it's just our responsibility to show the full impact from the lowest rate of enrollment to the highest.

Okay. Well, thank you. I just want to say that the fiscal note projects between 4000 and 40,000 new TAP participants. I don't know. I would love for you to walk us through data sources and methodologies used to develop both ends of that range, and what assumptions distinguish the 4000 household estimate from 40,000 household estimate? COMMISSIONER McCOLGAN: So the 4000 is based on customers who we know have previously applied and were in the income range of the proposed legislation and did not qualify. So our understanding is that there's at least 4000 customers who are aware of this program. And if this legislation were to pass, we would expect a reasonable amount of those people to apply for the program. So that's why we set that as the lowest threshold. And then the 40,000 is based on census data on total eligibility throughout the city based on the income level.

Yet you believe only 4000 most likely would -- COMMISSIONER McCOLGAN: I'm sorry?

But you believe only 4000 people most likely will apply? COMMISSIONER McCOLGAN: No. We're just saying that we think it's reasonable to expect that. That would be the minimum.

The minimum? COMMISSIONER McCOLGAN: Yes. We aren't able to project how many people would actually apply.

Okay. All right. Thank you so much. I got all the information I needed, actually some newfound information. That was important. COMMISSIONER McCOLGAN: Great. Thank you.

Commissioner, you may have already answered it. So in line with Councilmember Phillips, the existing TAP program, what percent are enrolled of the total eligible? Do we know that or is that -- COMMISSIONER McCOLGAN: I think we can get that for you. I know off the top of my head that --

Because that might be a gauge that you can project out what this new round would be. It would probably be in that same range, and then we can come up with some number that we know what we're dealing with. COMMISSIONER McCOLGAN: I'll see if we have that for you. I know off the top of my head all assistance programs in the city, we have approximately 77% of customers who are eligible enrolled, so that includes the TAP side as well. So I'll have to get back to you on the water.

77% of other programs; is that what you're saying? COMMISSIONER McCOLGAN: Yes.

Okay. That's helpful. Member Brooks.

What impact do you see water shutoffs or threats of water shutoffs having on families? And I'm asking because I was wondering what other policies have you seen other cities and states do around water policies that we could be doing here in Philadelphia? COMMISSIONER McCOLGAN: I just want to make sure that I heard you correctly. Did you ask what's the impact of shut-offs?

Yes. COMMISSIONER McCOLGAN: So we want to ensure that all residents have water service. Our goal is to ensure that all customers who are eligible for assistance programs are enrolled, and those that are eligible are then protected from shut-off for those that are eligible for TAP. And the enforcement of shut-off is really just simply used to get those who can pay to pay. It also helps prompt those who are eligible for assistance programs to get them enrolled in those programs so that they can benefit from forgiveness, arrearage forgiveness. So that's really the reason that we maintain it. However, I do want to just point out that we have dramatically changed the protections for shut-off over the last several years. During the pandemic, as mentioned, we did not shut off. When we did resume it, we increased the threshold to $1,000 for shut-off. We also have protections in place for property owners or, I'm sorry, residents that we've identified as having seniors and children living in a home. And we also have a Raise Your Hand program, so that if somebody simply says to us that they have medical hardship or a child or senior living in their home that we did not already identify, we also protect them from shut-off. So our pre-pandemic numbers, as I recall approximately 40,000 people were eligible for shut-off at the beginning of the shut-off season. And now, we maybe have 2000 or so who actually experience the shut-offs. Susan wants to add something.

Thank you, Councilmember Brooks. We've also restructured how we go about collecting our debt in order to provide our customers with more opportunities to come into compliance before we use the shut- off measure. We now place our accounts with outside collection agencies to give them the opportunity to come into compliance through payment agreements or by getting on to our assistance programs. And only after being with our outside collection agencies for approximately 270 days, if they still have a delinquent amount over $1,000, then they are eligible for shut-off. And in order to add an additional layer of protection, we work with the Community Empowerment Office or Community Engagement Office, I apologize. And we do emails, texting, phone banking, door-knocking on the customers who have either received a shut-off notice or are in danger of receiving a shut-off notice if their debt is $750 to $1,000. We do that street-level outreach in order to make sure that people are aware of all of their options, not only to come into compliance through payment or payment agreements, but also for the assistance programs that are available. And if they just simply need more time and they qualify, we allow them to use that Raise Your Hand program, which will exempt them from shut-off.

Thank you. My other question, not that it's related, but not directly, has the Water Department done any analysis or looking into the potential of rate increases related to data centers that we've seen in other regions? One of the concerns is an increase in water rates. Have we looked into that and how will it factor into this conversation later on? COMMISSIONER McCOLGAN: I think that we'll need to get back to you on that.

Thank you. COMMISSIONER McCOLGAN: Thank you.

Vice-Chair Young.

Thank you. I want to go back to something that Councilmember Brooks touched on regarding just the other methods of I guess collection and what other cities are doing. I introduced a piece of legislation that would prevent late fees for residential customers, and I have the answer in an analysis from the Water Department regarding that. But you just mentioned that you hire outside collection agencies and shut-offs don't really happen until the customer is delinquent up to $1,000, right. And so, the argument that we received back from the Administration regarding the elimination of late fees is that, oh, we want to be predictable, we want to have all these things in place. But if we already are not shutting off until $1,000, that's predictable. You will know where and when someone's bill gets to $1,000 and say, okay, now we have the ability to shut you off, regardless if there's those late fees. And I know you guys don't charge interest. But it's 5% and then it's another 5% after 60 days or whatever that is, so that's still adding cost that doesn't need to be there if we already have these other collection methods in place. So I just wanted to put that on the record. And another question I have is regarding the analysis that's regarding this particular legislation. How can you determine what affordability protections are causing the net loss or improving the city's ability to collect the sustainable payments over time? Have you done an analysis regarding the TAP participants, the auto- enroll participants, the payment consistency over 90 days, the growth areas? Have you done this analysis to show us that this is a bad thing for the City of Philadelphia to do? COMMISSIONER McCOLGAN: I think for the current legislation that we're discussing, we have the fiscal note that just simply states the potential financial impact with that range that we mentioned and also the fact that it would impact non-TAP customers, so that's what we have available for you today. In terms of additional analyses related to TAP, we will need to get back to you on that.

Yeah. I think that's helpful for us, right. Because again, that will show us what the real and true impact is. I mean, we still have the use of liens and shut-offs and all these other things that are available when it comes to enforcement. So I just hope that you all would take those into consideration when doing the analysis versus just the impact that it may have on non-TAP residential customers. Again, we keep saying that when we know that we can go ahead and spread those costs over. So thank you, Mr. Chair.

Member Phillips.

Thank you. So one question I just want to just get clarity on is you mentioned that there's many people who are eligible for the program and they're not taking advantage of it. Do you have a list that you can provide to us of all the addresses and individuals who could be eligible for the program that we can, you know, begin to connect our Council offices and say, hey, you're eligible for this particular program? COMMISSIONER McCOLGAN: Unfortunately, we don't have a list that we can provide, but we do appreciate partnering with all of the Councilmember offices on our community outreach events, where we work to raise awareness of the programs and try to get people into the programs. We do that at senior centers as well and partner with other elected official offices as well to try to get that information out there. We also send out notices and we also work to review those customers who may have applied on the tax side, to cross-enroll them on the Water side. So we don't have exact information as to the people who are eligible, where they live. We have census information that shows us general areas and potentially the percentage of enrollment in those areas.

If every eligible resident in the city of Philadelphia took advantage of the TAP program as it currently stands, would this be alarming for the department financially? COMMISSIONER McCOLGAN: If everybody who is eligible, it would be offset in rate increases.

Even though as it currently stands, not for -- COMMISSIONER McCOLGAN: That's right, exactly. TAP enrollment, as it increases it decreases revenue to support PWD in their operations and sustaining water. And that is offset by an increase in rates to all customers who are not on TAP.

Understood that. So there's a tug of war probably within the department in this capacity. So if you don't want -- you know, I used to run some relatively medium-sized nonprofits. I mean, this is larger. But if we don't want to have 100 kids in a program, why would we advertise that we have 100 -- if we don't want that many students in the program, we would always say we can only do 50 kids, but we can't do 100. I mean, like, I don't know. I just think that why have a program if you don't want everyone there? COMMISSIONER McCOLGAN: I'd be happy to respond to that, because we do want everyone who is eligible enrolled and that is what we're working towards. It's just that as that grows, we have the challenge of maintaining sustainable funding for PWD operations. And as it's currently structured, that funding is covered through increased rates, so that's really where the challenge is. We want those who are eligible to be enrolled in the program.

So you mean to tell me all of the money that the Philadelphia Water Department -- I think they are the largest generating revenue department in the city -- doesn't cover anywhere close to most of the operating funds that are needed for infrastructure and so forth? COMMISSIONER McCOLGAN: Details about PWD's budget and funding, I would have to call someone else up from PWD.

Okay.

If we would have had an audit, independent audit, we would know the answers to that right now. And so, I don't know who you're checking back with to find out, but it is essential to me as a member of this committee that you have looked from stem to stern, up, down to look at where you can offset passing this off to the ratepayers. And if it's a part of the law, then you are responsible to provide that information to this body. And otherwise, you just passing it on perfunctory to the ratepayer is unfair.

No, I thank you, Councilman Jones. I couldn't agree more. I am gravely concerned about how Philadelphia residents put out so much money into the Water Department on top of the fact that the Water Department comes back to us for a budget. It's like you're getting money and money and money all over the place, and I just don't understand how this is not -- I know the demand for operations, infrastructure is huge. Trust me, I know it. But then you get federal grants, you get state grants. I would love that information as well. COMMISSIONER McCOLGAN: Unfortunately, Commissioner Jewel for PWD had to leave. He wasn't able to stay or I'm sure he could probably speak to some of that right now. But we can get back to you on that. My understanding generally is just that costs of maintaining clean and healthy water also have risen in the cost of chemicals and other infrastructure costs. But details of their funding and budget, we could get that information to you from PWD.

Thank you, Chairman. Thank you, Commissioner.

And also, Councilmember Phillips, in regards to your question about getting everyone enrolled that we can, we do have an auto-enrollment program that we use. We use administrative data to pre-qualify customers to get into the program. And we've also recently partnered with our sister utilities, PGW and PECO, to do a unified communication where we have all three utilities send out emails and social platforms to let everyone know that if you qualify for one assistance program, you qualify for all of them. And so, we worked across all three utilities to create information and collateral to go out into neighborhoods to let all of our shared customers know that if you are on their assistance program, you qualify for ours, and we provided links for everyone to apply, and we had very successful rates of opening and clicks on those. And so, we did see a bump in our increase. We saw an increase in applications as a result of that. And so, we're always looking for ways to increase our enrollment, even though we have the constraints of only having census data and things like that.

Vice-Chair Young.

Thank you. I think one way that we can -- if we're looking to increase enrollment and you said you've partnered with PGW and PECO, I mean we send these out every month. I think we should just send the information in the bill to people and say, hey, this is a program that you qualify for. We send the bill every month. That's an easier way to connect with every single customer because every single customer gets a bill, so that's something to look at. And on those same lines, if this legislation were to be implemented, every customer who's eligible will not I guess enroll on day 1 or even year 1, right. So what's the cost associated with that -- when you've done your analysis, are you including that every customer will be enrolled on day 1 or is it like a phase type of thing when you're doing your analysis? COMMISSIONER McCOLGAN: We have not estimated the revenue impact year after year because we can't project the amount of enrollment that would increase. So we are just saying, you know, if it were what we think is reasonable to say a minimum of 4000, this is how much it would cost and show that in tiers up to the 40,000 max to show the potential range of revenue loss that could happen.

Thank you, Mr. Chair.

Commissioner, just a procedural question. Then I want to recognize Councilmember Gauthier. Then we're going to move to the next panel. So if this legislation passes, right -- well, let's say it doesn't for a second. So we're at that 4.89 and 2.10 combined. That's already been approved and that's going to go into effect, right? COMMISSIONER McCOLGAN: That's right.

And if the legislation does pass, what's the next step? Do you have to go back to the Rate Board to get that approved? COMMISSIONER McCOLGAN: That's a great question. The Rate Board ultimately makes the decision.

I see this sort of possibly now as maybe an enabling legislation, but not really a final decision. COMMISSIONER McCOLGAN: Yeah, that is a really good point. And I'm going to ask Susan to speak to the details of the process with the Rate Board.

Yes. If this bill were to pass, what would happen is it would go to the Rate Board and they would have to make several decisions. First, they would have to decide what tier to place this new group of customers in. Currently, we have four tiers. We have customers in 0% to 50% of FPL, 51 to 100, 101 to 150. So they would have to decide -- and then we have our special hardship customers. They would have to decide if they put these customers within that third tier of the 101 to 150, if they would just make that tier larger and put these customers in that or if they would create a separate tier for this segment of customers. In addition to that, they would need to set the percentage of income that these customers' bills would be based on. For each of the tiers, there's a percentage of income. For the lowest tier, it's 2%. For the next tier, it is 2.5%, and that is subject to check. I may have my numbers wrong on that. And then for the third tier is 3%, and for the special hardship it's 4%. So they would need to decide that percentage of income that would create that personalized bill for each of these customers. So they would need to make both of those decisions that would, in your words, enable this legislation. But the legislation would say, these customers now qualify and then it would go to the Rate Board to set the tier that they would fall in and the percentage of their household income, that would be their bill.

But they can also say this isn't a good idea at this time or it's not feasible or do they have to enact something? That's what I'm trying to understand.

They would have to enact something.

They would have to. Okay. Member Gauthier.

Thank you, Mr. Chair. And thanks to you and all of the committee members for asking a number of the same questions or similar questions that we have been asking for several months. And so, even though we're still getting responses that we'll get back to you, I just want you to know that this has been a month-long conversation with repeated requests to try to understand what is behind the fiscal note. And I just want to say from a professional and partnership perspective, we're all in here every day putting forth legislation that we think will make our constituents' lives better. And if fiscal note is going to be used as a tool to either delay or discourage the bill that Council is putting forward, then I think the Administration has the responsibility to be at the ready with their assumptions and to back up what information is being put out to discourage the legislation that's coming from Council. Just as a matter of operations, that feels like a fair way of functioning as Council continues to work with the Admin. But I also wanted to just point out things that I feel are misleading in the assumptions in the fiscal note. One, our analysis that was developed by CLS agrees with you about the low end of the cost spectrum. 4 million because that's based on the 4000 enrollees that you all already had apply that were not eligible. The 40,000 estimate is based in no such reality. And I think that we all know, Councilpeople know, the Administration knows there is no 23 means-tested program in the city that has full 100% enrollment, so why that would not only be put into the fiscal note. 5 million number that is not based in any sort of reality. And so, as we've been trying to move this bill forward, we've heard several times that this will cost $127 million over five years. And it's just not based in the reality of how enrollment and city programs actually function. I also appreciate that you guys were asking about the Rate Board's participation. So you are correct that although the Administration is estimating that $3 in cost would come from this legislation, that is not known. That would be determined by the Rate Board. And the Rate Board would determine the amount of discount or the percentage of discount that is applied to this program and they would do that based on public input. And we have discussed that many, many times. And at the Administration's request, we even lifted that information up in our legislation so that it would be understood. I also think it's misleading to portray that there would be a $10 increase in people's water bills because of this, knowing that a lot of those decisions were made before my legislation was even put on the table and knowing that the Water Rate Board would have to weigh in on this legislation. And so, my frustration is just about wanting to be working together in good faith and wanting to understand if there's going to be information put out to discourage support on an issue that we have all talked about all this year. Probably since the Trump administration started, we've been talking about the increase in people's utility bills and that's what we're trying to address. And so, if we're going to consider this in a fair way, then I just think that the information should be fair. And I feel like from the perspective of my office and CLS, we have been working in good faith and can back up the things that we're saying. But I do appreciate my committee members or my colleagues asking some of those same questions. I won't ask anything that you all haven't asked. I guess what I would say is that or one question I do have, customers with household incomes between 150% and 200% of the federal poverty line can already enroll in TAP today if they demonstrate a special hardship, a loss of employment, serious illness or a change in household composition. This bill removes that documentation requirement for the 150% to 200% band, but it does not create new eligibility for those folks.

So why does the Administration's assumptions treat the expansion population as if none of these folks could already apply for this relief under your existing programs? COMMISSIONER McCOLGAN: Yeah, I would appreciate the opportunity to respond to several things that you said. First, I do -- we have been working with your office for many months, and I would like to say that it has been in good faith. And as I mentioned earlier, we have sent information, but it may not have made it to you. So I apologize for that and we will get you the information that you requested. In no way are we trying to be misleading. The fiscal note breaks out the full range, right, the full potential. When we do a revenue impact analysis, we look at the full universe. 4 million at the lowest level of enrollment of 4000 to the 23 million at the highest level of 40,000. So our analysis just works to provide the full picture of what could happen in enrollment. 99 increase, in my testimony we're not trying to be misleading. 89 I think it was, those happen regardless. And the $3 is what we're saying would potentially be on top of that based on enrollment. And the point of just summing that together is just to reflect the impact to non-TAP customers should this pass.

Thank you. Now, we have had a successful relationship working together. I want to acknowledge that, and I appreciate you and your role. So my comments are only about this process. But if you're putting forward things that, one, are not reasonable, we don't have 100% immediate enrollment in any program in the city, so that shouldn't be a figure that we're speaking around. And it certainly shouldn't be the figure that anchors the majority of the Administration's pushback. So that to me -- and we've pointed that out like many times. We've asked you what are you basing that number on, people on this panel asked what are you basing that number on. And so, I think you have to be able to speak to that if you're going to use it to discourage the relief that we're trying to put forward for our residents. And also, during this conversation it was kind of elicited that this would have to be decided upon by the Water Rate Board. When we met with you all, we talked about that and we also said that we would try to make that even more clear in the legislation so that it will work better for you all. And so, I feel like we've been trying to work together on this, but I just have to disagree that everything feels in the best faith possible. But I'm also glad that some of these issues were talked about during the hearing. I have one more question. I want to ask, why are we only talking about the water rate increase as the only means that we have to pay for an expansion in water relief programs? Number one, your own testimony already talks about everyone in the city already being charged through the existing or upcoming increases for expansion and water relief. So why would we -- people are already being told that they're paying for that. We're just trying to make good on rates that were already, you know, rate hikes that already went into effect and that were talked about as allowing more people to enroll in water relief programs. The other thing, in talking with CLS about this legislation, they have repeated again and again and again that there are other ways that the Water Department could pay for some of these relief programs. If you're concerned about the cost, it is a choice to say that we're only going to pay for these programs through water rate hikes. Can you speak to that? COMMISSIONER McCOLGAN: I honestly can't speak to that. I can't speak to what funding resources PWD can use for funding. I just understand that, as it's currently structured the vast majority of it comes from the collection of our water and sewer usage bills. So I think as an Administration, we can get back to you on that.

Can PWD speak to it? COMMISSIONER McCOLGAN: I don't know that we have anyone here from PWD who can speak to it right now.

Okay. Well, if I were terrified about a $130 million cost that I was pushing, I would be here to defend my assumptions. COMMISSIONER McCOLGAN: We do. I'm sorry. Here's Lawrence Yangalay.

Good afternoon. Lawrence Yangalay, PWD Deputy Commissioner of Finance. I want to address two things. One is audit of PWD. The second is how we spend our money and how do we have our expenditures. One is our budget is approved by you. And when we project our expenditure, we take the projection to the Rate Board. At the Rate Board, the customers are represented by seeing Community Legal Services and will go through our expenditure line by line to make sure that it represents what we need. There are instances we have filed for expenditure, they are being challenged and they have been reduced. So we don't just go ahead spending money. It is scrutinized. In fact, I will say it's one of the departments that is very scrutinized by both the city and outside counsel. Let me just be clear. And on the issue of other sources of funding, we are hoping, we want to get as much funding from whatever we can get it from. We have gone to PennVest, we have engaged with grants, we are looking everywhere for funding. But the fact is that because we are an enterprise fund, we have been left to be supported by rates and charges, and there is no limit where -- if anybody has somewhere that we can go and get funding, we will appreciate it very highly and we have made that very clear over time. The audit is done by the same organization, the Philadelphia Controller Office orders our records, both internal control audit, our financial statement audited, and that's how we go to the bond market because we carry an audited financial statement to the market to even get a bond. So I mean, I just wanted to make this a little clear. Our expenditure, our finances are clear. Our expenditure are not just going wild. They are screened by even the Rate Board. They have to approve our expenditure level. And based on that expenditure level, they set the rate. And the customers, as I said again for every expenditure is represented by the CLS and also other intervener, the Philadelphia (inaudible). Everybody comes to make sure that PWD only get the resources it needs to support its operation. Thank you.

Member Jones.

Thank you, Mr. Chairman. Did I understand you say that there was an audit?

Say that again, sir.

Did I hear you say there was an audit?

I said that the Philadelphia Water Department is audited by the Controller's Office of the City.

So were there any findings in that audit? And when was the audit?

The findings in the audit can't come to my head. There are several findings, for instance -- over time to have been approved before it was taken, this is an audit. And of course the nature of our operation, for instance, if you have staff working at plant --

What year was the audit conducted?

What year?

Yes.

I think that HR finding has been a couple of years. It's not unique to PWD. I mean, most city departments have had that kind of finding of overtime is not approved when it is taken. And this is a situation I was trying to explain. For instance, you have a staff working at the plant.

So can you get a copy -- we can get it. But can you get a copy of that audit to the Chair?

Yes. The Controller audits -- every year it's an audit.

Okay.

Every year is an audit. In fact, we need that audit to be able to --

Other than the Controller, there's an audit?

No, we don't have an outside audit.

Independent audit.

No, we don't have an outside audit. The other audit of course is not an audit. It's how our expenditure are scrutinized by the Rate Board. And at that hearing is represented by other interests, Community Legal Services. We all look at this expenditure to say whether they are necessary. They are relevant for our operations. We are very scrutinized. One of the department that is passing through that scrutiny, I can admit.

All right. Last question, Vice- Chair Young.

Thank you very much.

Thank you. This question is for PWD. Is it possible then that the PWD can receive money from the city for whatever these increases would be without having to raise rates? Can PWD use General Fund money to cover the cost?

I don't know about a reason why PWD should not. We can only discuss the means at which PWD can receive such funding. I think other consideration is that when we go out there to obtain bond, we represent that PWD can support its operation from its resources. But in the case of let's say the customer assistance program, it is my opinion that the city can help, can assist customers that don't have the means to pay for their water usage. We are providing the services. So if other government wants to help these customers to pay for their water usage, I do not see the limitation to that. But again, you know --

So in our $7 billion budget, if our city wants to provide $2.4 million to the Water Department to offset some of the cost of the increase in this program, can we do that? COMMISSIONER McCOLGAN: I think we would need the Budget Office to respond.

Yeah. The only one point I want to make, as the Commissioner said, we need the Budget Officer. I will just (inaudible). Any assistance that is given, especially in regards to rate, has to be consistent.

But this isn't about a rate. This is about a direct I guess grant essentially to PWD?

Yes. What I was saying is that if any grant comes that we have to impact rate, it has to be consistent. Say you get a million grant this year, million next year, 1 1 million a year after next. If you want to do it for one year, the next year the grant does not come, it will have a multiple impact on the future rates. That's all I wanted to make.

Thank you.

Thank you. COMMISSIONER McCOLGAN: And also, I just wanted to say that 2.4 million as we said is the lowest estimate that we have. But for any questions regarding the General Fund, we would have to defer to the Budget Office.

Thank you.

Well, thank you, Commissioner. Thanks for your testimony. We're going to move on to the next panel. COMMISSIONER McCOLGAN: Thank you.

Ms. McDonald, please call the second panel we have to testify this afternoon on Bill No. 251021.

Robert Ballenger, Divisional Supervising Attorney for Community Legal Services Energy Unit; and Rebecca Pepe, Ph.D. candidate in Social Welfare at the School of Social Policy and Practice, and researcher at the Center for Food and Nutrition Policy at the University of Pennsylvania. (Witnesses approached witness table.)

Good afternoon. Please state your name and proceed with your testimony.

Good afternoon, Councilmembers. My name is Rebecca Pepe from the University of Pennsylvania. Thank you for the opportunity to provide testimony today regarding Bill 251021. D. candidate in Social Welfare at the School of Social Policy and Practice and a researcher at the Center for Food and Nutrition Policy, where I study the impacts of unaffordable water utilities on health and well-being. My testimony today represents my professional views, and not those of the university or Penn Medicine. This bill would expand eligibility for TAP from 150% to 200% of the federal poverty level, making affordable water service available to more low-income families. At a time when water costs are rising more than twice as fast as other consumer goods, this expansion would provide meaningful relief to households already struggling to make ends meet. I strongly support this bill because it would help keep families healthy, safely housed and connected to essential water services, while reducing the long- term social and financial costs of water insecurity for the City of Philadelphia. Water insecurity or the inability to reliably access safe water is a much bigger problem in Philadelphia than many realize. The Pennsylvania Constitution recognizes water access as a basic human right. Yet many Philadelphia residents have their water turned off each year because they're unable to pay their bills without running water. People can't wash their hands, clean dishes or prepare food. They have limited use of toilets, must find alternate means to bathe. Something as critical as baby infant formula becomes highly stressful to prepare. And the toll takes on our residents' mental and physical health is significant. Households earning less than $50,000 per year are over 7 times as likely to report that 8 they'd be unable to afford 9 groceries if their water bill 10 increased. These families describe difficult choices between paying for water and putting food on their table, often skipping meals or reducing portion sizes. They're more likely to rely on less nutritious meals and consume more sugar-sweetened beverages, placing them at increased risk for obesity, diet and chronic diseases. When water is disconnected, individuals are at increased risk of dehydration, which is particularly dire for breastfeeding mothers. Sewage can build up, increasing the risk of gastrointestinal illness. Insufficient access to affordable water can contribute to higher rates of respiratory infection and infection-related mortality. Without clean water, children can develop skin conditions like psoriasis and eczema, and may be unable to maintain oral hygiene, placing that increased risk for dental cavities. Families report delaying medical care, skipping recommended health care visits or rationing medications in order to pay for their water bills. Water insecurity contributes to chronic stress, anxiety, shame and embarrassment associated with mounting utility debt, fear of shut-off, and the impossible trade- offs families are forced to make. Water unaffordability affects everything from schooling and employment to family and housing stability in Philadelphia. Unaffordable utility bills and utility service disconnections are the most common housing issues requiring children to be placed in foster care. Families go to extraordinary lengths to avoid their children experiencing life without running water. Upon disconnection, some send their children away to live with family or friends until service is restored. Those who remain in disconnected homes find that the lack of water for bathing, laundry, and basic hygiene make it difficult to participate in work, school and daily life. For renters, water debt can increase the risk of eviction. For homeowners, mounting arrears and utility liens can threaten housing security and wealth accumulation.

The impacts of water unaffordability extend beyond individual households, affecting Philadelphia's most underserved and marginalized neighborhoods. When families cannot afford water service, the consequences ripple through the local economy. Children miss school, adults miss work, and households are forced to divert money away from local businesses and other essential expenditures. Water affordability is a public health issue, as the COVID-19 pandemic made clear. Reliable access to affordable water is essential for handwashing, sanitation, disease prevention, and safety of our communities. Fortunately, Philadelphia already has a program in place that improves water security for our most vulnerable residents. TAP has been recognized nationally as an innovative model for addressing water affordability. Expanding eligibility to households earning up to 200% of the federal poverty level would protect those on the edge of this benefits cliff who make just a little too much to be eligible, but still desperately need help and are otherwise at risk of nonpayment. By ensuring reliable access to safe water, Bill 251021 will improve health and well-being, keep families together and safely housed and help to prevent long-term threats to the city's financial and community health. The recent federal cuts to Medicaid and SNAP have placed unprecedented strain on our city's poorest residents, making the passage of this bill more important than ever. I applaud the efforts of Councilmember Gauthier and this committee for striving to ensure that all Philadelphians have access to the basic essential right to affordable water. Thank you for your time.

Thank you. Please state your name and begin your testimony.

Thank you, Chairman Driscoll, members of the committee. My name is Robert Ballenger, an attorney at Community Legal Services. Thanks again for the opportunity to speak. CLS clients experience the kind of hardships that Ms. Pepe was just talking about. Our clients face water insecurity, they face disruption of family unity, they face loss of housing and housing insecurity associated with high water bills. And one of the challenging issues in representing low- and moderate-income households in Philadelphia is when there's nothing available to help. And so, we routinely have people who come in who are eligible for our services, but they're just not quite poor enough. They're just not below 150% of federal poverty. So currently some of those customers can qualify for TAP if they're over 150% of federal poverty. They qualify because they have some other type of condition in the household, something that constitutes a special hardship and then they qualify for 4% of income bill that's calculated solely as 4% of their household income monthly TAP bill, and they participate in TAP to this day, right. So what this legislation does is it removes that special hardship qualifier for people between 150% and 200% of federal poverty. It just makes those households eligible based on income, in the same way that households between 0% and 150% of federal poverty are eligible just based on income. So we support the legislation obviously, and we believe that expansion in this way makes good sense to help fill that void for people who just aren't quite as poor as their neighbors, but are still facing economic vulnerability and all of the cascading harms that flow from the loss of potential or potential loss of water service. I wanted to offer -- if the committee is interested, I could talk a little more about the development of the numbers that I came up with for the projected cost here. I know you spend a lot of time on PWD numbers, but just to just kind of cover that very briefly. Every year, the Pennsylvania Public Utility Commission does a survey of the universal service programs, programs like PGW CRP program, which is analogous to TAP, right. It is a bill that's based on a percentage of income. You get an opportunity to earn forgiveness of your debt. It's Philadelphia and it's only Philadelphia. So we know from the surveys that they do that there are about 180,000 estimated low-income households, estimated low-income customers of PGW, and about 130,000 confirmed low-income customers of PGW. 60,000 of them participate in CRP. They're confirmed. That's a 45% participation rate for households that are confirmed to be low income and about a 32% participation rate for customers who are estimated to be low income. So full participation at the level of census figures is not something that's realistic, right. So that's the first step in my methodology, right, is to apply the similar kind of reduction to get to where if we're comparable to PGW, we're maybe getting 45% of the households in the program at that income demographic. Then I have to allocate the households based on usage, right. Because if you make $2,000 a month and you're at 175% of federal poverty and 4% of income is affordable to you, you're going to have an $80 monthly bill. If your bill is only $72 you're not going to get a discount, right. You don't qualify. You don't need it. And that happens on the back end when people apply for these programs. That's why some people, even if they're currently income-eligible, have affordable long-term payment arrangements because they don't need the discount because they control their usage. They have low usage. So I allocate the households based on both income at three different levels, 151, 175 and 200% of income. And based on the same usage characteristics of the current TAP households, all of the approximately 70,000 households that participate now, I looked at 12 months of usage information and I averaged them.

And I allocated the households based on usage and income. As I stated, the final factor is what is the Board going to decide is affordable. I don't know. I do know that we'll get to go before the board, PWD, the public advocate, any interveners who want to, we'll get to go in front of the Board. We will get to introduce our evidence. We will get to study each other's evidence. We will get to put forward our proposals for what that should be, and the Board will decide and it will take into account cost, it will take into account benefit and there is a benefit associated with these programs. It's not just cost. These programs exist because they help people pay what's affordable. When customers can pay what is affordable, they pay it. Payment coverage rates increase and improve, right. So we can't just look at the costs. We also have to look at the impact on the other side of the equation, which is providing affordable bills to customers improves payment patterns, and it improves the ability of the utility to collect overall. 2 persons. And at two different income levels or two different affordability levels, 3% and 4%, that's how I derive my range. I apply the households based on the usage and based on income to the various blocks that we know exist among the existing customers. And I would just lift up that one of the serious cost drivers that we're seeing in the data is high usage, and the city is doing incredible work funding and building programs to help customers with home repairs prioritize leak assistance, because that's going to pay off. It's going to help reduce the costs of these types of programs long term to have customers in efficient housing that is not using as much water right now. As much as 10% of customers in the program are using about four times what the typical residential customer uses. That's indicative to me of old, outdated fixtures, probably interior leaks, probably some toilets that need to be worked on, small dollar repairs that can provide real large dollar benefits to all of us in the system, all of us who pay our monthly bills and contribute to the costs of programs like this. I want to also just acknowledge the tremendous work that the Water Department and Water Revenue Bureau have done to date in getting this program running. It is truly a model for the nation. I think we should all be very proud of that. And finally, I do also want to acknowledge that we are working hand in hand with the department and others trying to explore external funding for programs like stormwater remediation, the big ticket items, the big programs that are forcing PWD to borrow money to expend capital dollars to do the kinds of things that we as a city should be funding more broadly, because those types of programs provide benefits that aren't just the water that we drink at the tap. They improve our quality of life, they improve our environment all around us. So when we're looking for external funding, those are the kinds of things that I would really encourage us all to support, and to support PWD, and getting those dollars that aren't contingent upon me paying my water bill and you all paying your water bills. Happy to answer any questions you may have.

I have a couple questions. Procedurally, how long does something like this take to go to the Water Rate Board and your analysis, the public advocate? How long is this process if it goes well?

The ordinance actually sets a 120-day timeline. There's a 30-day advance notice period so the total process is 150 days from soup to nuts. So we get started very quickly in the context of a rate proceeding. We do have the ability to bring in consultants. So my analysis that I did, my consultant might come up with something different but the idea of it is that we have an on-the-record proceeding where everything is on the table, all of our discovery. Everything that we exchange and information gets included on the record and the Rate Board. The record of a rate proceeding in Philadelphia is thousands and thousands of pages.

Who makes the argument on behalf of the ratepayer that might have to subsidize this, who makes that argument?

Community Legal Services has the contract to serve as the public advocate, so we represent the interests of all residential and small business customers in rate proceedings. So that's one of the reasons why I'm trying to focus a little bit on leak remediation because it has such a high probability of reducing the costs of this program to other customers. So you really see, if you look at the tables attached to my testimony in the letter that I provided to Councilmember Gauthier in May, you really see that at the high usage level. That's a really heavy concentration of cost. So if we can bring those costs down, that's going to benefit all other non-TAP customers, and that's something that we would love to have support from, and we will explore that in the rate cases as well.

Okay. Thank you.

Thank you.

Ms. McDonald, anybody else to testify?

We have (inaudible) public comment, yes.

Signed up for public comment? (Witness approached witness table.)

Please state your name for the record.

Sure. My name is Lance Haver. I'm the former Director of Consumer Affairs for the City of Philadelphia, and I'm currently the Consumer Reporter for Philadelphia Hall Monitor. Councilman Jones, you're right on the money, you're right on time, but I'm going to read my testimony and then talk specifically about your point. And, Councilmember Young, you're absolutely right. The idea of charging a sales tax on a basic necessity of life, water, to pay for a very needed program is insane. No one would suggest raising a sales tax on food to pay for SNAP. And yet people, including Community Legal Services, talk about a sales tax increasing water bills to pay for the TAP program. There are five reasons why the water rates have gone up by 52% in the last five years. One, you have reappointed the same Water Commissioners who voted for every water rate hike. They have voted to raise the average bill from $63 to $96 a month, and it's going up even more in September. You reappoint them without bringing them in and asking why do you continue to vote for rate increases. Two, no one has required PGW and PWD to look for savings by combining services and office spaces. There's no reason why PWD offices can't be moved to save money. Move them to PGW's headquarters. Why do they have to be in Center City? Let them help a neighborhood that's in trouble or is struggling with all of their employees. Three, at every rate increase both the advocate appointed by the Rate Board, Community Legal Services, and PWD's experts refuse to hire consultants to find ways to save money. And this is what Councilmember Jones was talking about. Yes, they're audited by the Controller, but there is no management audit to find cost savings. Community Legal Services refuses to hire an expert to find cost savings. The Water Department refuses to hire an expert to find cost savings. They both spend literally hundreds of thousands of dollars on consultants arguing about how much water rate should go up. And let's be clear about this: Every one of these rate increases I've talked about has been a direct result of settlement that Community Legal Services, Mr. Ballenger, agreed to with the Water Department. Every single one of these settlements has been a direct result of the public advocate who answers to nobody other than the Rate Board, settling a case and raising the bills by 52% over these six years. Three, Philadelphia Water Department refuses to recruit water-intensive industries to Philadelphia. One of our greatest assets in the city is how much water we have access to. The Southeast, the Southwest, they don't have the water that we do. Yet the Water Department does absolutely no recruitment of water- intensive industries. If we could bring more industries like Dietz & Watson in that uses water in their processing, we would have more sales and we would lower the per gallon cost. Yet the Water Department refuses to do that. Five, the advocate appointed by the Rate Board, Mr. Ballenger, has supported every rate increase over the last six years. And every year, without a public hearing, without public input, he is given a no-bid contract by the Rate Board. Mr. Ballenger will claim that he saved ratepayers money, but it's just a game. Philadelphia Water Department asked for more than what it wants. Then in private, what I call secret, they negotiate and they reach a settlement. The bills from $63 to $96 could not have happened without Community Legal Services, which has no client group, which doesn't come before any of you to seek guidance on whether they should agree to these rate increases or not, could not happen without their acquiescing. I'm happy to answer any more questions, but I want to make two more quick points. I did bring copies of my testimony. I'm not sure you're interested. One, I want to go back to Councilmember Jones, if I could.

What you're asking for I believe, sir, is a management audit, someone to look at efficiencies, someone to find efficiencies, not a financial audit which says, did you spend $12, yes, they spend $12 but it was a wasted $12. A management audit says you should not have spent that $12. They have not done that in a quarter of a century, and they continue to defend their waste and mismanagement. Second and again, Councilmember Young, you raised this question. I'm going to try and say it without being outraged, but here it is: The TAP program is necessary. It should be expanded to 200%. The Councilmember was absolutely correct. All of you are correct. But who should pay for that is a separate question. There are two questions: One, should we help people who need help; and two, how should that be paid for. By making it a sales tax -- now, I know they don't call it a sales tax. They call it something else. But it's an extra payment that you make on water, whether you want to call it a surcharge or something else doesn't change the fact. You pay your water bill and then they charge you for a program, a social welfare program, a surcharge. That's simply wrong. The money, first of all, doesn't come from everyone. If you're a speculator in the city, you don't pay to support the TAP program. If you're a construction company that doesn't have an office in the city, you don't pay for the surcharge. If you're a visitor to the city, you don't pay to help cut the cost of the TAP program. Only if it comes out of the general operating budget does everyone pay a fair share. If you think about it for more than a second, this is the most regressive form of taxation not even Donald Trump would support. It is a tax on a basic necessity of life, water, in a regressive form that is flat. It's not based on the more you make, the more you pay, just the opposite. The less you make, the higher the tax rate. And with that, I will thank you for listening to me and I appreciate your time.

Thank you. Hearing no further questions from members of this panel and there being no other panels to testify --

I just want to thank you, man, for the decades you've been doing and fighting for consumers in this city. Thank you so much.

Thank you. And I really appreciate the time and energy you've put into this and I know you've had a long day.

Thank you. Well, let's move on to Bill No. 260426. Ms. McDonald, please call the first panel we have to testify this afternoon on Bill No. 7 260426.

Kate Sullivan, Chief Commercial Officer, Department of Aviation. (Witness approached witness table.)

Good afternoon. Please state your name for the record and proceed with your testimony.

Good afternoon. I'm Kate Sullivan, the Chief Commercial Officer for the Department of Aviation. Good afternoon, Chairman Driscoll and members of the Committee on Transportation and Public Utilities. My name is Kate Sullivan, Chief Commercial Officer for the Department of Aviation, which manages both Philadelphia International Airport, or PHL, and Northeast Philadelphia Airport, PNE. I'm here today to testify in support of Bill No. 9 260426, authorizing the Director of the Department of Aviation, on behalf of the City, to modify a certain easement and acquire additional easement interests in connection with a portion of the parcel of land commonly known as 8350 Executive Avenue, under certain terms and conditions. PHL is a self-sustaining entity, which uses no local taxpayer dollars for its operation and generates significant economic annual impact for our region. PHL is in the process of creating additional refrigerated warehouse space, which would provide new economic growth and create jobs. The addition of this refrigerated warehouse space, otherwise known as a Cool Port, will help attract new businesses and generate new tax revenue for Philadelphia and the Commonwealth. Cool Port facilities offer broad cooler and freezer temperatures to accommodate perishable cargo, including pharmaceuticals, lifescience- related goods, perishable food and specialized electronics. Bill No. 16 260426 would expand the current easement granted to 4630 Island Ave. It's a property owned by the City's Department of Aviation and the site of the location of the project, to allow for the installation and maintenance of water pipes, natural gas pipes, fiber optic cables, conduits, electrical, telecommunications and related equipment structures, infrastructure, fixtures and other personal property, both above and below ground. The easement is connected to 8350 Executive Ave and expands the current easement agreement between the two properties. This project is essential to the completion of the project and will allow construction to commence and will support the facility once completed. Thank you for the opportunity to testify in support of Bill No. 260426. I kindly ask the committee for a favorable recommendation and that the rules be suspended to allow for first reading at the next session of Council. I'm happy to answer any questions that you have.

I think you're good. Thank you for your testimony.

Thank you.

Hearing no further questions from members of this panel, and there's no other panels to testify on Bill -- is it Bill 260427, Maur?

(Inaudible).

So we're going to move on to 427. Okay. And you're going to testify for that?

Yep. You got me again.

Okay. Please proceed.

Okay. I'm still Kate Sullivan, still Chief Commercial Officer for the Department of Aviation. Good afternoon, Chairman Driscoll and members of the Committee on Transportation and Public Utilities. My name is Kate Sullivan, Chief Commercial Officer for the Department of Aviation, which manages both Philadelphia International Airport, PHL, and Northeast Philadelphia Airport, PNE. I'm here today to testify in support of Bill No. 12 260427, authorizing the Director of the Department of Aviation, the DOA, to acquire, on behalf of the City, fee simple title or lesser interest by purchase, amicable negotiation, dedication, donation, condemnation, agreement in lieu of condemnation or otherwise, in and to all or portions of a certain parcel of land known as 8800 Tinicum Boulevard in Philadelphia County, under certain terms and conditions. As a self-sustaining entity which uses no local taxpayer dollars for its operations, PHL generates significant annual economic impact for our region and creates thousands of jobs. However, compared to many of our peer airports, our facility has very little room to grow, as it's surrounded by I-95, the Schuylkill River, the Delaware River and Tinicum Township. So when able, PHL looks for opportunities to expand its footprint by acquiring adjacent property. The parcel of land at 8800 Tinicum Boulevard consists of 31.56 acres of space, including a 441,000 square foot office building and has a parking lot that can accommodate 1285 cars. The lot currently stands vacant and borders airport property, something which makes it prime consideration for acquisition. Bill No. 260427 would allow the DOA to acquire the parcel of land known as 8800 Tinicum Boulevard. This purchase would utilize airport commercial funds and would not impact the General Fund. The parcel would allow the airport to expand its footprint and could be utilized for many purposes, prime among them office space and parking. Thank you for the opportunity to testify in support of Bill 260427. I kindly ask the committee for a favorable recommendation, and that the rules be suspended to allow for first reading at the next session of Council.

Chair recognizes Member Phillips.

Thank you. I just want to know what is the plan for the parcel of land? Do you have a clear plan for what you'd like to do with it, out of curiosity?

Thank you very much for the question, Councilmember. As I said in my testimony, PHL is just incredibly land-constrained. We're about 2500 acres and do about 30 million passengers a year on those 2500 acres, so we're hemmed in by highways, by rivers, by towns. So basically, policy-wise when an adjacent parcel comes available for us to look at, we at least want to have a conversation about it. We don't have a final determination on what the use will be, but we're looking at a couple of possible uses, including using the building as office space.

Okay. So ultimately, you simply just want to be able to acquire this parcel of land without having a sense of what you want to do with it?

Without a final determination, yeah. We are looking at a number of potential uses.

It doesn't cost taxpayer money, but I just don't understand -- I think you should have a plan, but thank you.

I appreciate that. Thanks.

Member Jones.

Is this in Tinicum Township or in Philly?

This is in Philly.

Thank you.

Okay. Seeing no further questions for this panel and there be no 4 other panelists to testify on Bill 5 No. 260427, we will now move on to Bill No. 260464. Ms. McDonald, please call the first panel we have to testify this afternoon on Bill No. 10 260464.

Jessica Noon, Sustainability Manager, Department of Aviation. (Witnesses approached witness table.)

Good afternoon. Please state your name for the record and proceed with your testimony.

Good afternoon. My name is Jessica Noon. I'm the Sustainability Manager for the Department of Aviation. Good afternoon, Chairman Driscoll and members of the Committee on Transportation and Public Utilities. My name is Jessica Noon. I'm the Sustainability Manager for Department of Aviation, which manages both Philadelphia International Airport, PHL, and Northeast Philadelphia Airport, PNE. I'm here today to testify in support of Bill No. 13 260464, authorizing the Procurement Department, on behalf of the City of Philadelphia, to enter into an agreement with the Philadelphia Energy Authority to purchase electricity and certain attributes and benefits related to the generation of such electricity from a solar energy facility to be built and owned by Reactivate, LLC, located at Northeast Philadelphia Airport for use at and in connection with City facilities, all under certain terms and conditions. To protect our environment, The Department of Aviation has taken many steps to move towards sustainable and green practices, such as setting ambitious goals to mitigate our environmental impact. The Department of Aviation is committed to purchasing or generating 100% renewable energy through collaboration with the City of Philadelphia's Office of Sustainability. To achieve this goal, the Philadelphia Energy Authority, PEA, has partnered with the DOA, Department of Aviation, alongside the chosen developer and owner, Reactivate, to build and maintain a solar farm at PNE. The new solar farm will provide approximately 3000 megawatts of annual energy to the PNE airport, meeting PNE's total electricity needs. Bill No. 260464 would allow the Department of Aviation to enter into a 25-year Power Purchase Agreement to build and procure renewable energy from Reactivate Solar Farm, creating the largest solar array within Philadelphia. The Department of Aviation will purchase electricity for years 13 through this PPA, reducing risk 14 exposure to volatile energy markets 15 and providing an expected $116,000 16 in energy cost savings over the 17 agreement's lifetime. 18 Reactivate will be 19 responsible for construction, 20 ownership, maintenance and 21 operation of the solar farm, and 22 the Department of Aviation will 23 have no additional costs or 24 responsibilities regarding the maintenance or operation of this project. Thank you for the opportunity to testify in support of Bill No. 260464. I kindly ask the committee for adoption of the amendment, a favorable recommendation and that the rules may be suspended to allow for first reading at the next session of Council. I'm happy to answer any questions that you may have.

Please state your name for the record and proceed with your testimony.

Sure. Good afternoon, Chair Driscoll and members of the committee. I'm Katie Bartolotta, Vice President of Policy and Strategic Partnerships with the Philadelphia Energy Authority or PEA. I'm testifying in support of Bill No. 260464. PEA is an independent municipal authority advancing projects and programs that deliver on the city's most urgent priorities, lower bills, stronger infrastructure, safer neighborhoods and quality jobs. Since 2016, PEA has supported over $1.3 billion in investment, creating more than 11,000 jobs in Philadelphia and driving $2.4 billion in economic benefits across Pennsylvania. PEA works closely with the Office of Sustainability and other city departments, such as the Department of Aviation, or DOA, to fulfill its normal course of business, evaluating and pursuing cost- effective energy procurement strategies that align with the goals of the municipal energy plan. In particular, PEA provides capabilities that the city does not have on its own, including holding long-term contracts for energy procurement for projects like the onsite PNE solar project. PEA provides energy deal structure and contracting expertise to support the city's robust energy procurement strategy. Selected through a competitive bid process, the 1.5 megawatt PNE solar Power Purchase Agreement will cover 100% of PNE's electricity needs. As Jessica mentioned, a PPA is a very common structure used to develop and finance solar installations, in which the city commits to buying the electricity from the array, and the third party handles construction and operations and maintenance through the entire term of the contract. It will be the city's largest onsite solar project within the city limits. And through this procurement contract, the city will purchase electricity at a fixed rate, resulting in increased budget stability and reducing risk exposure to volatile energy markets, something I know Council has been talking about quite a bit lately. Some members may recall that DOA and PEA brought this project before Council once before in 2022. The project did not advance at that time due to challenges with the PECO interconnection process that caused months of delay and our vendor could not hold pricing until that was resolved. But DOA has been a very patient and diligent partner to PECO, making the necessary upgrades so PECO can be ready to help connect this important cost- stabilizing clean energy resource to the grid. We expect PECO will continue to be a good partner to ensure a smooth interconnection process to allow our vendor Reactivate to bring this project into operation in time to capture the sunsetting federal tax credits. PEA supports the PNE solar project. It's a key strategy in DOA's sustainability goals to ensure that the city's energy supply is clean, cost-controlled, and affordable for the long term. For these reasons, we ask for your support of Bill No. 260464.

Vice-Chair Young.

Thank you. Once the solar is installed, is the vendor allowed to then sell that energy to other places other than the airport?

That's a great question. The vendor is selling the electricity to the airport for the entire term of the contract, so they will be the only off-taker of the power from that solar array.

Okay. Thank you.

Thank you for your testimony. We'll now move on to Bill No. 260464 -- I'm sorry. We'll move on to Bill No. 260431. Ms. McDonald, please call the first panel we have to testify this afternoon on Bill No. 17 260431.

Jessica Noon, Sustainability Manager, Department of Aviation.

Please state your name for the record and proceed with your testimony.

Good afternoon, Chairman Driscoll and members of the Committee on Transportation and Public Utilities. My name is Jessica Noon, Sustainability Manager for the Department of Aviation, DOA, which manages both Philadelphia International Airport and Northeast Philadelphia Airport. I'm here today to testify in support of Bill No. 13 260431, authorizing the Procurement Commissioner, on behalf of the City -- this is the wrong one. Sorry about that.

Take your time.

This is correct. I'm here to testify in support of Bill No. 260431, authorizing the Procurement Commissioner, on behalf of the City, to enter into a concession agreement with Positive Energy, Inc. for the procurement, construction, installation, operation, and maintenance of direct current fast chargers in the cell phone lot at Philadelphia International Airport, under certain terms and conditions. With the interest in electric vehicles growing within Philadelphia, many Philadelphians struggle to find places to charge their vehicles for the past few years. Our team has been studying to assess the appropriate location and opportunity at PHL to install EV charging stations for our passengers, rideshare vehicles and the public. The site was chosen as PHL cell phone waiting lot, as it is accessible to both I-95 and Route 291. The cell phone lot is located immediately northwest of the terminal complex and provides temporary parking spaces for individuals waiting to pick up travelers coming through PHL. Bill No. 260431 would install four EV fast chargers, which can charge up to eight vehicles at a time and provide a full charge within 30 minutes. All members of the public, including PHL passengers, rideshare operators, who are typically not allowed on the cell phone lot, will be allowed to access these chargers, creating an easily accessible EV charging station for people who live and work around the airport. The selected vendor, Positive Energy, Inc. will initiate a PECO amount account for this location and design and build the chargers, while the Department of Aviation will review all design and construction via concession contract. Positive Energy shall own and maintain the chargers and not impose a fee for use of them. The Department of Energy will receive 33% of the revenue for the first five years of this contract and 37% for the following five years. Thank you for the opportunity to testify in support of Bill No. 260431. I kindly ask the committee for a favorable recommendation and that the rules be suspended to allow for the first reading at the next session of Council. I'm happy to answer any questions that you may have.

I think we're good. So hearing no further questions from members for this panel and there being no other panels to testify on Bill No. 1 260431, we'll move on to Bill No. 2 260428. Ms. McDonald, will you please call the first panel we have to testify this afternoon on Bill 6 No. 260428. 7

Anna Kelly, 8 Senior Policy Advisor for EV and 9 Parking, Office of Transportation 10 and Infrastructure Systems. 11 (Witnesses approached 12 witness table.) 13

14 Good afternoon. Please state your 15 name for the record and proceed 16 with your testimony. 17

Good 18 afternoon, Chairperson Driscoll and 19 members of the Transportation 20 Committee. My name is Anna Kelly. 21 I'm Senior Policy Advisor for EV 22 and Parking with the Office of 23 Transportation and Infrastructure 24 Systems or OTIS. I'm here today with Chris Puchalsky, Director of Policy and Strategic Initiatives at OTIS, and we're here to offer testimony on Bill No. 260428 sponsored by Councilmember Driscoll. In addition to Councilmember Driscoll, we'd like to thank the Councilmembers and staff for their ongoing engagement on this program. So this bill will authorize the launch of Charge PHL, a public-private partnership in which two vendors will provide over 800 publicly-available EV charging stations across the city over the next 10 years at no capital cost to the city. This bill will first authorize OTIS and the Procurement Commissioner, on behalf of the City, to execute separate multi- year concession agreements with Itselectric and PositivEnergy to site, design, install, own and maintain a network of publicly- available EV charging stations throughout the city at curbside locations and surface parking lots. PositivEnergy and Itselectric were selected out of six bids submitted for this opportunity. The procurement process was quite extensive and included several interviews, demonstrations and extensive negotiations. Both companies were selected for their experience, operations and maintenance plans, and siting and expansion approaches. In addition to this criteria, both vendors have been excellent partners throughout the negotiations, expressing a commitment to providing safe public charging throughout all Philadelphia neighborhoods and ensuring that chargers throughout the city provide the best possible user experience. While several companies that applied had the technical qualifications, these two companies rose above as partners in the work to expand EV access. Second, this bill would amend Title 12, entitled "Traffic Code" to authorize the installation, use, administration and enforcement of EV parking spaces, provide for administrative enforcement of violations of EV parking violations, which would include camera-based enforcement and towing and finally, amend Chapter 11-604 to sunset the existing private curbside charging program over the next 10 years. This program was initiated because the current state of EV charging in the city is unsafe and insufficient. 4 miles from an EV charger. The lack of available charging infrastructure leaves many EV owners dangling extension cords out of windows or across sidewalks. Through this program, the city would provide a safe option for existing EV owners and to encourage EV uptake. The expansion of EV infrastructure will also improve the city's air quality. Motor vehicles are responsible for 60% of the city's pollution, and Philadelphia consistently receives an F grade for pollution from the American Lung Association. The transition to EVs will reduce these pollutants and as a result, decrease the devastating impacts of asthma and heart disease in our communities. This expansion of our EV infrastructure will come at minimal cost to the city. Capital costs will be contributed by the vendors in conjunction with federal funding, and vendors will be responsible for the design, installation, operations and maintenance of the charging network. Securing these contracts in a timely fashion is essential to accessing federal funding rounds, some of which are coming up at the end of the summer between $14 million to $18 million in federal funding. Since the legislation was introduced, OTIS has engaged our CEO leaders, advocates and Council offices on this program to answer questions and determine strategies for citing curbside EV charging stations across the city. We've also received letters of support from Physicians for Social Responsibility, Clean Air Council and the Electrification Coalition. Thank you for the opportunity to testify before you today.

I'd be happy to answer any questions at this time.

Vice-Chair Young.

Thank you. Can you tell us if there or what the cost would be for the user on this? Will it be below what the market is for this or can you tell us how the pricing is determined?

Yeah. So I'll start and then if Chris has anything to add. We will be approving any fee changes within the -- the contract will enforce our approval of any fee changes. Doing some back-of-the-envelope math, a charge overnight would likely cost someone around $13, which is much lower than the cost of gas and competitive with market rate.

So I think that's my -- not a concern, but if this is going to be a government program, I would expect that it be a little bit lower than what the market can produce. You mentioned 1.5 miles away for a charger station. I don't want the government to be in the business of potentially gouging folks out because they know that they're just further away from them to move. So I just want us to look at that a little bit to see how we can lower those costs for people. If we're going to encourage EVs in our city, then make sure that the costs attributed to that are a little bit lower.

Councilmember, I appreciate that comment. The goal is that you wouldn't be farther from an EV charger than you are currently from a gasoline station. And what we've seen with the private market, it's not so much that the costs are high with the privately-available chargers. Like my colleague Anna said, they're much cheaper than paying for gas. They're just not available in certain neighborhoods. And when we see where the private sector has chosen to install chargers, it's mostly concentrated in Center City. And what we're looking to do for this program is making sure that every resident has access to EV charging close at hand in their neighborhood.

Thank you. I got drilled by a constituent who lives in Fairmount who's asking for this because they see their neighbors under the old program essentially have a free parking spot in front of their house. And so, they wanted access to this. I mentioned this legislation, but it's years too 6 late for them essentially. 7 So I look forward to 8 helping with this particular 9 program and installing these all 10 over the city, which brings to my next question. In my district we have a lot of city-owned land. Have you guys looked into developing city-owned land for some of these charging stations?

Yes. So we are going to be using currently city-owned and public PPA-operated lots are going to be used for the chargers. If there are opportunities with other city-owned land and there's not -- we'll be glad to work with the Department of Public Property to find that, if that's the use that makes sense.

I mean I'm just thinking, for example, in North Philly, there is no Parking Authority -- I mean, there is a Parking Authority managed lot but it's on city-owned land. So I would just hope that we take a look at some of those outside of -- neighborhoods where we want the expansion of electric vehicles, if we can put that infrastructure there to kind of incentivize those residents to purchase electric vehicles, I think it would be helpful. I mean, I have a lot of friends who they rent Teslas for Ubers, but they had to drive all the way up to the Northeast to charge their cars up while they're working, right. So it'll be helpful if you want to incentivize other residents to purchase these electric vehicles to install them in those neighborhoods where we might not think that folks will want to have them.

Yeah. 100% agree, and we will do that.

Thank you.

Councilmember Jones.

Thank you, Mr. Chairman. So currently, how many charging stations do we have in Philadelphia?

The last count that I did there's around 175 that are publicly-available. There's a lot that are private that people have in their garages, et cetera, that we don't have access to that data. But, yeah, just under 200.

And the rollout of these stations that are publicly accessible, will they be in a 7-Eleven, you can go in and charge your car? What's the distribution plan for these stations?

Yeah, absolutely. So there's sort of two categories here. One is the PPA parking lots as we mentioned. We'll be installing charging stations, fast-charging stations, and Level 2 charging stations in a variety of PPA parking lots. And then additionally, we'll be looking at curbside locations and we'll be working with Council offices and with our COs to cite those locations where they best make sense. We are going to build into the contracts a distribution plan that ensures that there are chargers distributed to all Council districts. We want to make sure that that is solidified in this 10-year contract so we have distribution across the city.

How much is a charging station to install?

Sorry. Could you repeat that question?

Say it again?

Could you repeat that question?

How much does it cost to build a charging station?

So it varies a little bit. Fast-charging stations are quite expensive. They're around $800,000 for a project. But Level 2 chargers are much less expensive. They're around $15,000 to $25,000. That's one of the reasons we wanted to do a concession contract. That means the vendors are bringing those capital costs to the table in conjunction with federal funds that we already won or are planning on applying for.

What's your time frame for the rollout?

We're hoping to have the first chargers installed at the beginning of 2027, if all goes well with contracting timelines.

Thank you, Mr. Chairman.

Hearing no further questions from this panel and there being no other panels to testify on bills before the committee, we will now transition to our public comment session. Ms. McDonald, will you please call the first person making public comment we have to testify this afternoon on the bills before the committee. I will note that Mr. Lance Haver has already spoken.

There are no 7 names for public comment.

Okay. I'd like to thank all our witnesses for joining us today. There being no further questions from members of the committee and no other witnesses to testify on Bill Nos. 251020, 251021, 260426, 260427, 260464, 260431, 260428. I will ask if there's anyone else present in this hearing whose name we have failed to call and that wishes to offer testimony on the bills being considered today? (No response.)

Hearing none, I want to thank the panels and the witnesses for their participation today. This concludes the public hearing of the committee. We will now go into a public meeting to consider the action to be taken on the bills before this committee today. Ms. McDonald, will you please call the roll to take attendance. Members that are in attendance, please indicate you are present when your name is called.

Councilmember Brooks.

Present.

Councilmember Jones.

Present.

Councilmember Phillips.

Present.

Councilmember Squilla.

Present.

Vice-Chair Young.

Present.

Chair Driscoll.

Present. The Chair recognizes Councilmember Young for a motion on the amendment to Bill No. 251021.

Thank you, Mr. Chair. I offer an amendment to Bill No. 251021. A copy of the amendment has been circulated to all members of the committee. I move that the amendment to Bill No. 22 251021 be approved. (Duly seconded.)

The Chair notes for the record that Councilmember Jones seconds the motion. It has been moved and properly seconded that the amendment to Bill No. 251021 be approved. All those in favor of the motion will signify by saying aye. (Aye.)

Those opposed? (No response.)

The ayes have it. The motion carries and the amendment to Bill 17 No. 251021 has been approved. Chair recognizes Councilmember Young for a motion on the amendment to Bill No. 260464.

Thank you, Mr. Chair. I offer an amendment to Bill No. 260464. A copy of the amendment has been circulated to all members of the committee. I move that the amendment to 260464 be approved. (Duly seconded.)

Chair notes for the record that Councilmember Brooks seconds the motion. It has been moved and properly seconded that the amendment to Bill No. 260464 be approved. All those in favor of the motion will signify by saying aye. (Aye.)

Those opposed? (No response.)

The ayes have it. The motion carries and the amendment to Bill 23 No. 260464 has been approved. Chair recognizes Councilmember Young for a motion on Bill No. 251021 as amended and Bill 3 No. 260464 as amended.

Thank you, Mr. Chair. I move that Bill Nos. 251021 as amended and Bill No. 8 260464 as amended be reported from this committee with a favorable recommendation, and further move that the rules of Council be suspended to permit the first reading of these bills at our next session of Council. (Duly seconded.)

The Chair notes for the record that Councilmember Brooks seconds the motion. It has been moved and properly seconded that Bill No. 22 251021 as amended and Bill No. 23 260464 as amended be reported from this committee with a favorable recommendation and further move that the rules of Council be suspended to permit first reading of this bill at the next session of Council. All those in favor of the motion will signify by saying aye. (Aye.)

The ayes have it. The motion carries. Chair recognizes Councilmember Young for a motion on Bill Nos. 251020, 260426, 260427, 260431 and 260428.

Thank you, Mr. Chair. I move that Bill Nos. 251020, 260426, 260427, 260431 and 260428 be reported from this committee with a favorable recommendation, and further move that the rules of Council be suspended to permit first reading of these bills at our next session of Council. (Duly seconded.)

The Chair notes for the record that Councilmember Squilla seconds the motion. It has been moved and properly seconded that Bill Nos. 251020, 260426, 260427, 260431 and 260428 be reported from this committee with a favorable recommendation and further move that the rules of Council be suspended to permit first reading of these bills at the next session of Council. All those in favor of the motion will signify by saying aye. (Aye.)

The ayes have it. The motion carries. This concludes the business before this Committee on Transportation -- hold on. This concludes the business before the Committee on Transportation and Public Utilities today. Thank you all very much for your attendance. We're adjourned. (Committee on Transportation and Public Utilities concluded at 4:59 p.m.) C E R T I F I C A T I O N I, hereby certify that the proceedings and evidence noted are contained fully and accurately in the stenographic notes taken by me in the foregoing matter, and that this is a correct transcript of the same. _______________________________ TANEHA CARROLL