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Philadelphia uses tough love to overhaul its water and sewer system

PHILADELPHIA -- The day Stuart Parmet's water bill hit the stratosphere, his mind became a swirl of numbers.

American Box and Recycling Co., his business, gathers, recycles and distributes cardboard boxes. The factory only had a dozen or so toilets and used no water in the machinery. What was going on?

"One day we get a bill, out of the clear blue sky, that 'your bill will go from $300 in 2009, $1,100 in 2010, $2,400 in 2011, up to $3,900 in 2013,'" he said. These were monthly charges -- he estimated the annual cost at $70,000. "That's five times my real estate bill, and I thought it was a joke."

As Parmet fired irate phone calls to the city, he learned that Philadelphia's $2 billion, 25-year water plan was under way. It aimed to cleanse the city's waterways of urban pollution in compliance with state and federal law. Another objective was to make Philadelphia more resilient to heavy storms and flooding.

To pay for that, though, the Philadelphia Water Department was fundamentally changing how it assessed water bills. Where Parmet had traditionally paid for his water use, now he was also going to have to pay for what happened to the water after he used it.

When it comes to dealing with water, the ambition of the City of Brotherly Love is to change more than its infrastructure. It wants to change its very culture.

But for a small group of businesses, led by Parmet, the idea of culture change induced culture shock.

Soon after reading that water bill, Parmet organized some 100 businesses whose bills were set to spike. The group has pleaded with City Hall, hired a lobbyist and threatened litigation. In animated meetings with the Water Department, it has resisted implementation of the new bills.

Passing on the 'true cost' of water service

"He's not right. He's just screaming," said Howard Neukrug, commissioner at the Water Department. "The problem is that we've changed how we're charging for stormwater. We went from this basis that had no reality in fact to this basis that has true cost of service."

"If he does nothing on his property for another 20 years, in 20 years he'll be paying $5,000" or whatever the figure would be with inflation, he said.

Neukrug is heading the city's rollout of the "Green City, Clean Waters" plan, widely viewed as a cutting-edge effort to address climate and water issues. Historically, Philadelphia and other cities have focused their water systems on massive underground pipes -- networks whose job is to transmit sewage and flush stormwater away during heavy rains.

That system begins with homes, businesses and streets that efficiently shed water into drains. The problem, Philadelphia found, was that this water carried oil, fertilizer, dog droppings and all manner of urban filth to rivers and streams, running afoul of clean-water laws.

"Cities across the country are facing the need to make these kinds of expenditures to clean up their sewer overflow problems," said Nathan Gardner-Andrews, general counsel for the National Association of Clean Water Agencies. "It's not really a question of if you're going to spend it, it's a question of how you're going to spend it."

Instead of building an even larger pipe system to address the issue, Neukrug pitched the most aggressive "green infrastructure" plan in the country. Through increased vegetation, rain barrels, sponge-like roads and other measures, the city would try to absorb more water where it fell. The ground would filter out pollutants, reduce strain on the pipelines and make the city a more attractive place.

"You're asking for this population base to self-fund improvements, to improve the environment, and you're asking them to do it in a way that hopefully provides them some benefit that they can see and touch and feel," he said.

Building a defense against climate impacts

It could also toughen the city against climate impacts, Neukrug said, if the recent pattern of hard and frequent rainfalls continues.

Surfaces didn't always drink water. Not long ago, many were built to be hard and slippery, in order to shoot troublesome rainwater into rivers, canals and reservoirs.

Chicago launched one of these mega-projects 40 years ago to alleviate persistent flooding in the low-lying area around Lake Michigan. The "Deep Tunnel" is composed of 109 miles of pipes up to 33 feet in diameter and as deep as 300 feet below the metropolis it drains. The network of tunnels and a large reservoir near O'Hare International Airport were finished in 2006 at a cost of $3 billion; three more reservoirs are still being built.

The engineering feat has reduced the runoff that gushes into local rivers and Lake Michigan. But as the city was buttressing its new flood defenses, a new test was on the way. An unprecedented storm last summer dropped 6.86 inches of rain in one day, the most since records began after the Civil War.

Deep Tunnel couldn't contain it all. Rainwater that might have been absorbed by porous ground was shot by pavement into sewers where it mixed with sewage flushed into the underground caverns. When the putrid fluid began to gurgle up into basements, officials relieved the pressure by opening metal gates and locks leading into Lake Michigan. The city's famed swimming beaches had to be closed.

Braving political waves

Meanwhile, Howard Neukrug of the Philadelphia Water Department was nearing the end of his decadelong campaign for green infrastructure.

"The way I started was just this inkling of an idea, and going around on my own to leaders in different parts of city government and nonprofits, and sitting down with them one-on-one, and talking to them about this concept and whether it made sense," he explained. "The general outcome of that was, yes, it made a lot of sense, but you'll never be able to do it."

Meeting by meeting, conference by conference, Neukrug began convincing listeners not only that green infrastructure could work, but that it could actually work at a large enough scale to address a city's water challenges.

The decisive victory came last June, when Neukrug and the Water Department won over state and federal regulators. New, bigger tunnels underground would have been easy to regulate, Neukrug admitted. But the solution would have cost $8 billion to $10 billion to meet the desired level of environmental benefit, he said. Green infrastructure could do it for $2 billion -- with co-benefits.

"From my point of view, there never was a tunnel solution for Philadelphia," he said.

Back home, though, Philadelphia's different solution was making political waves. If the city's approach to water had changed, so would its billing. No more would a property be charged solely for the water it used. Now it also had to be charged for how much it contributed to the city's stormwater problem. It had to be charged for how "hard" it was -- its tendency to shed water into drains versus soak it up on the spot.

For the average household, this would add about $3.50 to a total bill of roughly $60 a month. It would add considerably more for businesses, such as hospitals, corporate offices and factories. The city planned to measure the largest properties and charge them for their "permeable area" -- the amount of their land that absorbed water.

The hardest-hit businesses would be large, paved-over properties that used little water and absorbed hardly any. For decades, they had shared the cost of dealing with stormwater with the rest of the city. Suddenly, they would have to bear a much heavier load.

To Parmet and the other businesses that fit this description, it wasn't a question of fairness. It was unfairness.

Parmet said to adapt his property to absorb water, he'd have to build basins in the driveway at a cost of $300,000, $400,000, even $800,000. The city ought to have told him of its plan years ago, he said, before he paved the area.

"The fact that this was so secret and there was no publicity about it, I could have made any changes I wanted at that point," he said.

To hear Parmet tell it, the last two years has been a story of public officials learning of the water consumers' plight and their demands to distribute the charges more fairly.

Incentives for porous paving

Over the past year and a half, the Water Department has met with his group and other city stakeholders to get more feedback. The Water Department has been unyielding on the fundamentals: All property owners should still have to pay based on how much water their property sheds. Nevertheless, Parmet's group has scored a win: The bills can't rise more than 10 percent and $100 a month.

As the water plan unfolds, the city hopes people will also use financial incentives. The Water Department has offered credits for various measures: Trees planted near pavement, for example, can reduce a bill by $1 per square foot. Each foot of "green" roofing can chop a bill by some $30. Replacing hard blacktop with porous asphalt, which permits water to soak through into the ground, earns about 60 cents per square foot.

On top of that, the city will offer loans of $75,000 to $1 million for businesses that want to upgrade their properties. One business owner hoping to capitalize on that is Gabriel Mandujano, manager of Wash Cycle Laundry.

While a typical washing machine runs through 12 to 13 cycles of fresh water, he said, only two or three of those cycles handle the toughest filth. There are new machines that can soak the clothes, drain the water, clean it and use it to wash the clothes again.

"You can basically take standard wash water and turn it into drinkable [water] that'll perform better on tests than your average spin water," he said.

The machines can reduce water demand by 85 percent. The filtration is so advanced, Mandujano said, that he can even collect rainwater and put it into the machine, reducing his water purchases to virtually zero. But the machines start at $50,000 and run all the way up to $1 million. If Mandujano can prove that these machines would reduce his impact on the city's stormwater problem, he can make use of the incentive.

On the other hand, Wash Cycle Laundry isn't facing a gargantuan utility bill. It will continue to pay for whatever water it uses, but it's based in a row house, a narrow property with no paved parking lot -- thus, nearly no stormwater footprint. According to city data, his stormwater bill is roughly $70 today; in 2014, it will have slimmed down to $16.74.

Reporter Evan Lehmann contributed.