Philadelphia Water Department
Philadelphia’s Water Department began providing water services in 1801. The utility currently provides wastewater service to the City of Philadelphia and 10 municipalities and authorities in Montgomery, Delaware, and Bucks counties; it also supplies drinking water to the city and parts of Bucks County. Philadelphia Water Department serves around 1.7 million people and the wastewater system serves about 2.2 million people. The utility has contributed significantly to improving the water quality of the Delaware River.
Philadelphia’s socioeconomic challenges make water affordability a significant challenge for many low-income residents. The city has the highest poverty rate of the ten biggest cities in the country, with 25 percent of adults and 38 percent of children living in poverty, and almost half of its households earning less than $35,000 a year. Additionally, communities of color are disproportionately more affected: while 22 percent of low-income families are white, 58 percent are African American.
In response, Philadelphia’s Water Department is expanding its assistance programs by launching an income-based rate structure in July 2017. Legislation was approved in 2015 to create the Income-Based Water Revenue Assistance Program (IWRAP), now known as the Tiered Assistance Program (TAP). The program offers low-income customers payment plans based on a percentage of their income, with lower rates available for households at or below 50 percent of the federal poverty line. Seniors are offered the program that provides the lowest monthly bill. Additionally, the program will help connect struggling ratepayers to housing advocates who can help ensure that they avoid foreclosure over unpaid bills. Once customers are enrolled in a payment plan, they will be eligible for forgiveness of penalties and protections from shutoffs with consistent monthly payments. TAP is predicted to reduce the need for collections, because more customers will be able to pay the new, more affordable rates. The utility estimates that approximately 60,000 customers will be eligible for assistance under TAP.
Philadelphia’s program takes a proactive and compassionate approach. By connecting homeowners at risk of foreclosure to resources and support, the program has the potential to stabilize families, reduce displacement, and prevent vacancy and blight. Additionally, it can encourage the utility to refocus its efforts and budget on improving infrastructure, rather than collecting unpaid bills and reacting to crises. Easing the burden of water bills on the city’s most vulnerable communities is an important step in building stability and prosperity.
Communities of Color
Funding and Finance