Water Rate Hike Sparks Questions About Accountability

January 10, 2019

Baltimore approves another 30% increase to water bills over the next three years despite demands for city—and corporate—accountability

Baltimore approves another 30% increase to water bills over the next three years despite demands for city—and corporate—accountability


Water Rate Hike Sparks Questions About Accountability

Story Transcript

DHARNA NOOR: In one of the poorest cities in the country water bills continue to rise. A series of steep price hikes is causing tensions at City Hall and raising questions about the fairness of who pays and who doesn’t.

TRACY LINGO: Let’s see if we can actually collect from these big corporate employers and big entities that are far behind on their bills.

DHARNA NOOR: The price of water in Baltimore will increase by roughly 30 percent over the next three years, beginning this July. The increase was proposed by the Department of Public Works and approved by the Board of Estimates on Tuesday morning.

JACK YOUNG: All those in favor say Aye. All those opposed say Nay.

DHARNA NOOR: Mayor Catherine Pugh approved the rate hike, as did City Solicitor Andre Davis and Department of Public Works Director Rudy Chow, who were both appointed by the mayor. City Council President Jack Young and Comptroller John Pratt voted no.

JOAN PRATT: The Department of Public Works and its water and wastewater bureau has not demonstrated to my satisfaction that the rate increases for providing these services are valid.

DHARNA NOOR: Water rates have already quadrupled since the year 2000. The Department of Public Works says the rate hikes are necessary to fund repairs to the city’s century-old water and sewage system. Under federal consent decree from the Environmental Protection Agency, Baltimore must spend $1.6 billion on repairing the infrastructure.

RUDY CHOW: We’re in a Catch-22, a rock and a hard place right now, because unfortunately right now all the rate increases we’re talking about annually is really for the sole purpose of supporting the repayment, meaning the interest and principal of money we’d be borrowing annually to do the annual type of programs.

DHARNA NOOR: But union organizer Tracey Lingo says working and poor Baltimoreans shouldn’t have to bear the brunt of cost for repairs.

TRACY LINGO: As working people are dedicating more and more of their income to water costs, we ask if large employers are paying their fair share.

DHARNA NOOR: In Baltimore you can lose your home to tax sale over just $750 in unpaid water bills. You can lose a place of worship for even less: just $350 in unpaid water bills.

But Lingo says the city’s Marriott Waterfront Hotel is behind on its water bills by almost a million and a half dollars.

TRACY LINGO: Against this seven-figure balance, the account made a payment on December 20 of only $813.91.

DHARNA NOOR: Lingo organizes with Unite Here Local 7, the union with which some Mariott Waterfront workers are attempting to organize.

TRACY LINGO: The Baltimore Marriott Waterfront, majority owned by Swiss investment bank UBS, opened in 2001 and benefited from a payment in lieu of taxes, or PILOT agreement. Under the terms of that PILOT, the hotel is exempt from municipal property taxes for 25 years, and instead pays just one dollar a year.

The PILOT has lost the city’s general fund an estimated $47 million dollars in lost tax revenue since 2001. Marriott is the largest hotel company in the world and generated over $22 billion in revenue in 2017. Before Baltimore asks working people to pay even more for their water the city should make sure that our largest and wealthiest employers are paying their fair share.

DHARNA NOOR: We reached out to Marriott Waterfront for a response. They said the bill was erroneous, and that “as a responsible business operator we contacted the city to refute the bill, and we’ve been in ongoing correspondence with them to address the matter.”

But water affordability advocate Molly Amster says when citizens like her get those kinds of erroneous bills they get sent to tax sale and risk losing their properties. And she knows from experience.

MOLLY AMSTER: I personally have had issues with my water bill and struggled to get DPW to respond. This caused my mortgage payments to increase dramatically because my house was on the tax sale list due to my incorrect water bill.

DHARNA NOOR: DPW Chief Financial Officer Troy Brogden says his department forecasts a decrease in water bills after three years.

TROY BROGDEN: It’s predicted in the fourth year that the wastewater rates will decline; then after another maybe three years that our water and stormwater rates, they have a declining rate increase.

DHARNA NOOR: But water affordability advocates say that’s not the case.

TRACEY LINGO: It’s not true. The rate increases will diminish in size. They will not be 9.9 percent every year in perpetuity. But there will still be a rate increase every single year, and that increase will be more than inflation.

DHARNA NOOR: We reached out to DPW for response, and they said the prospective rate increases will be less than what customers have been seeing. They’ll decrease from 9 percent to 6 percent, and eventually decrease to about 3 percent, which is about the rate of inflation. The Board of Estimates also unanimously approved a new DPW affordability program. Baltimore H2O Assists will lower rates for households with incomes below 175 percent of the federal poverty level even if they’re behind on their bills. But critics say that’s not enough.

TRACY LINGO: Those funds are still going to leave many residents who are not going to qualify for those funds.

DHARNA NOOR: Especially not for renters.

TRACY LINGO: DPW’s proposed assistance program would still require the property owners’ written permission before a tenant could receive the discount.

DHARNA NOOR: The evening before the meeting, five members of City Council held a press conference outside City Hall to demand that DPW justify the rate hike with an independent study.

ZEKE COHEN: We want to see the numbers. We want to see where citizens’ dollars are going to go to. We want to see what the improvements to our infrastructure are going to be.

DHARNA NOOR: But DPW Director Rudy Chow says there’s already been sufficient analysis to show the rate hikes are necessary.

RUDY CHOW: Our rate hikes go through a robust analysis by our rate consultants. That means I didn’t pull the number out of some sort of [bowl] and say that that’s the rate increases.

DHARNA NOOR: Mayor Pugh said refusing to approve the rate hike would be unfair to her constituents who suffer sewage backups, water main breaks, and other effects of Baltimore’s aging water systems.

CATHERINE PUGH: Buildings have been flooded. Schools have been flooded. Children have had to leave school because pipes are breaking. Nobody should have to undergo this.

DHARNA NOOR: But Lingo says there are other ways to finance Baltimore’s infrastructure repairs.

TRACY LINGO: There should be no rate increase until we make sure that all the corporate accounts are up to date.

DHARNA NOOR: This week, state legislators announced that they will reintroduce legislation to prevent residents from losing their homes and churches due to unpaid bills. And last month, City Council President Jack Young introduced legislation to tie water rates to household income and create a grievance and appeals office for water customers. Amster says the new rate hikes make these proposals all the more necessary to protect the city’s most vulnerable residents.

MOLLY AMSTER: Obviously the people who are the most vulnerable already in our city, people who are, you know, low income, elderly, disabled, those are the people who are struggling the most and are going to be negatively impacted the most by this rate hike, and continue to be impacted by the lack of addressing the consistent problems that exist. And those people are losing their homes.

DHARNA NOOR: For The Real News with Taylor Hebden, Dharna Noor, Baltimore.