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Council debates penalty forgiveness and water billing overhaul as administration warns of revenue risk
Summary
Council members urged expanded penalty forgiveness for water bills and questioned enforcement such as shutoffs; Water Revenue defended penalties as a collection tool and described protections (TAP, moratoria), while also laying out a plan to replace the 20-year-old water billing system with a modern platform planned for FY29.
Council members debated whether to expand penalty forgiveness on water bills and pressed the Revenue Department on collection practices, program qualifications and a long-term billing-system replacement.
"What is Water Revenue's position on a bill that would eliminate late fees and penalties and interest on our water bills for our Philadelphia residents?" asked Council member Jeffrey J. Young. Young noted that testimony shows roughly $2.6 million in penalty forgiveness collected for TAP participants between July 2021 and December 2025 and asked whether the administration could extend forgiveness to all residential customers.
The Revenue Commissioner said the department plans to change TAP so penalty forgiveness accrues monthly rather than only after a 24-month completion requirement, but cautioned that penalties are widely used as a collection tool to ensure timely payment. Officials said eliminating penalties for all customers could undermine revenue predictability and might incentivize late payment among customers who currently pay on time.
Council members and others pushed back, noting that shutoff is the most potent enforcement mechanism and that protections and enrollment in assistance programs reduce shutoffs: testimony said pre-COVID shutoff-eligible households averaged roughly 40,000 a year but that current annual shutoffs are about 2,000–3,000 due to moratoria, TAP and other protections. Water Revenue agreed to provide written estimates of the penalty-revenue impact and to supply program enrollment qualifications and related statistics.
Separately, the Revenue Department described plans to replace the roughly 20-year-old water billing system. Requirements were completed in FY25, an RFP was posted in August 2025, vendor selection and system design are planned for FY26, staff onboarding and development in FY27–'28, and training and a FY29 go-live are anticipated. Officials said the new system is intended to improve collections, operations and customer experience, and that changes will be coordinated with the Philadelphia Water Department.
Council members asked for written follow-up on projected revenue impacts, TAP qualification criteria, and breakdowns of program enrollment by district.
