Bill to end water discounts stalls in Council

A proposal to end to the 25 percent discount on water rates given to schools, churches, and other charitable institutions failed to clear a City Council committee yesterday, leading several members to doubt whether Council was ready to make hard financial choices in the forthcoming budget.

Councilman Frank DiCicco wanted the Committee on Finance to recommend approval of his bill, which sought to end the 26-year-old law that subsidizes water rates for 3,200 nonprofits.

Those discounts, he argued, are at the expense of regular ratepayers.

"We all have to start thinking a little bit differently about how we do things," DiCicco said. "And we all need to pony up a little bit more."

City Revenue Commissioner Keith J. Richardson said that under the proposed bill, the Water Department would save more than $10 million a year by 2013, when the changes would take full effect.

The savings would include the estimated $500,000 break given annually to the Philadelphia Housing Authority, which now enjoys a 5 percent discount. That reduction also would disappear under DiCicco's bill, which was backed by the Nutter administration.

The biggest beneficiaries of the discount are the Philadelphia School District, which saves $2 million annually; the University of Pennsylvania and its hospital system, $1.1 million; Temple University, $457,000; and Thomas Jefferson University Hospital, $424,000, Richardson testified.

The expected savings would not aid the city's general fund, which is facing a $1 billion shortfall over the next five years, but would help the Water Department avoid rate increases in the future.

But although four members of the eight-person committee - DiCicco, Committee Chairwoman Marian B. Tasco, William Greenlee, and James F. Kenney - are regarded as allies of Mayor Nutter on budget issues, the bill stalled and DiCicco held it after realizing he did not have the five votes needed to pass.

Tasco and Councilwoman Jannie L. Blackwell opposed the bill, saying too many questions remained unanswered to vote it out of committee.

Kenney, who supported the bill, warned that much harder choices would be coming Council's way shortly.

"I don't know how you can give a discount to anyone when you're broke," Kenney said. "If we're going to get bogged down with the light lifting, I don't know how we're going to deal with the heavy lifting."

Nutter will present his budget to Council in eight days, and it is expected to include some drastic choices on raising new revenues.

Of the largest institutions to benefit from the discount, only PHA had people testify at the hearing: a lawyer and several tenants' representatives.

"For years, PHA has been treated differently" than other charitable organizations, attorney Robert L. Archie Jr. said.

PHA's budget already is stretched thin by cuts in federal funding, and additional expenses could lead to curtailing services such as security, he said.

Others who spoke up were from smaller nonprofits and churches.

The Rev. Arthur White, pastor of Christ Community Baptist Church in West Philadelphia, suggested that the city wanted "to give yourself a stimulus" on the backs of the "people who need it."

The bill was also backed by Community Legal Services, one of the city's most vocal advocates for the poor.

Wiping out the discount "represents a basic principle of fairness," said Philip Bertocci, who heads Community Legal Services' energy and utilities law section.

"Poor people should not have to pay a penny more" to subsidize institutions, Bertocci said. The average ratepayer would save about $20 a year under the bill, he estimated.