Billions over budget: Questions swirl over city’s “green” fix for sewers

by Kyle Bagenstose
Posted 5/31/24

More than a decade after the Philadelphia Water Department introduced its 'Green City, Clean Waters' program, costs have quietly ballooned to at least $4.5 billion at its halfway mark.

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Billions over budget: Questions swirl over city’s “green” fix for sewers


Since 2011, when the Philadelphia Water Department introduced Green City, Clean Waters—a plan to fix its archaic sewer systems through the widespread installation of so-called green infrastructure—proponents have regarded the program as the department's crown jewel. 

But more than a decade later, the program's costs have quietly ballooned to at least $4.5 billion at its halfway mark, at least $2 billion over original estimates, according to public records and department employees. 

Those costs are primarily borne by ratepayers, who foot the bill through a designated stormwater charge on their monthly bills.

Green City, Clean Waters was pitched as an innovative, cost-effective way to deal with the billions of gallons of raw sewage that overflow each year from the city’s vast expanse of aging sewer lines. That untreated overflow spills into rivers and creeks and can have harmful effects on human health and to fish and wildlife. 

The program was designed to install thousands of diffuse pieces of “green infrastructure,” like rain gardens and vegetated ditches, to capture rainwater and keep it from ever overwhelming sewer lines in the first place.  

Two PWD employees with direct knowledge of Green City, Clean Waters, who spoke on the condition of anonymity to avoid professional reprisal, said the cost of greening an acre of land in Philadelphia has ballooned to above $500,000 from an original estimate of about $175,000, and a significant portion of such installations have also run into performance trouble. 

Sometimes, plots of vegetated green infrastructure simply fail, either overwhelmed by the stormwater they’re supposed to contain or stricken by plant die-offs due to poor soil conditions or pollution. 

In other cases, the installations only half work, requiring expensive repairs or ongoing maintenance.

Further, the employees said, there are concerns that even if every piece of green infrastructure did work as designed, the city is having trouble identifying enough space to place it all by the program’s deadline. 

Under an agreement with the U.S. Environmental Protection Agency, the city must green a little over 9,500 such acres by 2036. As previously reported, at current rates of installation, PWD is on pace to miss that target. Records show it still has some 6,700 acres left to go.

While it’s fairly common for major public infrastructure projects to run over budget and past deadlines, concerns with the city’s program revolve around its experimental nature. Hailed as innovative, the program was designed to spend the majority of its dollars on green infrastructure, making Philadelphia the only major city in the United States to take this approach. 

However, David McGuigan, a former associate director at the U.S. Environmental Protection Agency’s regional offices in Philadelphia who oversaw wastewater permitting, says doubts about whether the strategy would work existed at high levels from the very beginning. 

According to McGuigan, some EPA program staff members lacked confidence early on that the plan would achieve necessary pollution reductions in each of Philadelphia’s three sewer districts.

"It was not an engineering solution. It was an aspirational solution,” McGuigan said. “I think that's what caused the most concern. It did not propose verifiable targets and reasonable certainty.”

PWD responds

The PWD declined an interview request for this story but it provided detailed written responses to questions. 

It did not deny that Green City, Clean Waters has seen significant cost increases. It primarily pegged overruns to unforeseen circumstances, such as the COVID-19 pandemic, not major flaws with the program’s design, and said it was working to solve the problems it had identified.

“We have seen peer cities faced with significant cost increases as they have evolved over years of program implementation, especially as cities are navigating the post-COVID economic landscape, which often reflects volatility in commodity pricing, shortages of skilled labor and historic inflation and escalation,” the department said.

The utility’s response also touted the program’s successes, including an estimated reduction of three billion gallons of sewage overflows a year through the installation of more than 2,800 pieces of green infrastructure.

“Philadelphia has worked tirelessly for 13 years to implement innovative water quality investments in our communities,” the department commissioner, Randy Hayman, said in a statement. “We took the vision called Green City, Clean Waters and ushered it from an idea to a reality by creating the programs, policies and tools necessary to facilitate a groundbreaking investment in Philadelphia’s waterways and communities. We face challenges and obstacles head on, adjusting when needed, and will continue to do so.”

When formalized in 2011, officials said about 70 percent of the money spent on Green City, Clean Waters would go toward green infrastructure, while 15 percent would go toward traditional infrastructure and another 15 percent would remain flexible.

But with more than a decade of data now in hand, employees and clean water advocates question whether that breakdown is still the right one or whether PWD should be shifting significant funding from green infrastructure to more traditional options.

It’s a calculation that the city can ill afford to get wrong. In the years ahead, PWD will likely incur billions of dollars in other new costs. 

The city estimates that the EPA's new requirement to replace all of the city’s lead water pipes in the next 10 years could cost $500 million alone. The utility also needs to make major infrastructure investments to combat climate change, increase water security, and meet new regulations on water quality

Green spending, gray picture

Publicly, there are no signs that the Philadelphia Water Department has any doubts about its commitment to Green City, Clean Waters. Regular public reports issued by the PWD maintain that the program is on track and even prospering. 

But in 2021, an internal working group was established to freshly assess cost differences between green infrastructure and more traditional options, such as large tunnels, the employees said. In cities like Milwaukee and Chicago, billions of dollars have been spent solving sewer issues by creating giant underground tunnels to store excess sewage until enough capacity can be cleared to treat it.

Internal documents show that during a May 2023 meeting, PWD employees presented information concluding that the cost to install a single “greened acre” of infrastructure had reached an average of $348,000. 

That is an increase from a decade ago, when PWD estimated each greened acre would cost $150,000 to $200,000, according to department documents and employees. Two employees said even more recent calculations now place the cost at more than $500,000 per greened acre.

If the cost of each acre to be greened averaged $500,000, the total would reach $3.35 billion, on top of what has already been spent on the program. In its responses, PWD said the most recent $4.5 billion cost estimate for the entirety of the project included future expenses. 

It also said $348,000 per greened acre was established as the 2020 fiscal year price. 

“While there is a risk of potential further cost increase in the years ahead, a revised projected cost per GA has not been developed,” the department said.

At that meeting, employees also noted a steep rise in the costs of maintaining green infrastructure. 

The original 2011 plan, they noted, estimated annual operations and maintenance costs for street trees, rain gardens and green roofs would cost a few thousand dollars a year. But over a five-year period ending in 2022, actual field maintenance costs came in several-fold higher. 

In responses to this story, PWD confirmed that such costs are now estimated at $10,000-$12,000 a year per greened acre.

What’s driving overall cost increases?

A PWD employee familiar with the program said that when original financial estimates were made, department planners and leaders assumed the costs of installing greened acres would decrease as efficiencies progressed, and designs and procurement became standardized. But that largely hasn’t come to pass, the employee said. 

Variables, such as soil conditions, have proven finicky, prematurely ending the lifespan of some installations and requiring custom designs for many. 

The employee said These problems have shifted the anticipated lifespan of a typical green installation to less than 20 years, from 25 to 40 years, driving up both maintenance costs and keeping design costs high. 

These twin problems create a Catch-22: Spend a lot of money up front on custom designs with better chances of working, or pay on the back end when more generic installations start to break down.

The PWD pointedly pushed back on the idea that there are widespread problems with green infrastructure design. 

Of 830 pieces of green infrastructure installed so far, only 20 have been “retired or pending retirement,” the department said. It also said that it “currently estimates the engineering service life” of green infrastructure to be at least 50 years, not less than 20.

“PWD disagrees with the notion that issues with installations pose a significant challenge for the program,” it said. “Our program is designed to learn from real-life conditions; when faced with real-life applications and lessons learned, we are able to update planning and design guidance to facilitate improvement of future projects.”

Further, it maintained that “ample greenable space” remains to meet program targets.

What say the watchdogs?

The debate over the merits of Green City Clean Waters officially has three judges: the city’s elected officials, the EPA, and the Pennsylvania Department of Environmental Protection, which provide primary oversight of combined sewer programs. 

PWD is currently hitting every target it agreed to with the EPA and DEP when the program was created in 2011. When adjusted for annual rainfall, the city has achieved about a 21 percent improvement in sewage overflows from a decade ago, according to an analysis of annual reports. 

So far, the PWD has also hit five- and 10-year targets for the number of “greened acres” it has installed to capture stormwater, which is the primary metric regulators agreed to assess the program. 

However, the amount of new greened acres that need to be installed accelerates in each five-year period, and two of the employees said there is internal skepticism that PWD will meet its next target in 2026. 

Money is another matter. 

While both the EPA and DEP said costs are considered while creating sewer plans like Philadelphia’s, neither said there was any requirement to ensure the program stays on budget or remains affordable for ratepayers. The city’s annual reports do not include comprehensive financial accounting or analysis of cost effectiveness. 

There are indications that EPA staff have some reservations about the program, particularly about the distribution of greened acres across the city's three sewer districts.

According to McGuigan, program staff at the EPA have withheld approval of critical permits for Philadelphia’s three wastewater treatment plants for more than a decade, in large part due to concerns over Green City, Clean Waters.

McGuigan said that, as currently designed, the program is ambivalent about where green infrastructure is installed in Philadelphia. But EPA staff want to ensure it is implemented strategically throughout the city to protect even small, vulnerable waterways, like Frankford and Cobbs Creeks.

McGuigan said Philadelphia has refused to accept requests to implement such a watershed-specific approach, which he said the Clean Water Act requires. 

In 2012, the DEP issued a draft permit for the treatment plants anyway, but the EPA did not sign off and responded with an objection that has left the plants operating on 2007 permits ever since, when they’re supposed to be renewed every five years.

The EPA confirmed it had, in fact, objected to language in a draft permit DEP issued in 2013, and said it “continues to work closely with PA DEP to resolve this objection.” 

For its part, PWD also confirmed it had received a letter from the EPA, but that discussions concluded when the EPA “stayed” the letter in April 2017. The department said that modifying its Green City Clean Water plan at the halfway mark “would have significant schedule and cost implications.”

The big picture

While the city appears to be making headway, it still has an annual reduction of about five billion gallons to go. 

Clean water advocates point out that these figures are based on modeling and don’t account for climate change. If PWD stays the course, no one can say with certainty exactly where it will end up in 2036.

There are, however, collateral benefits of Green City, Clean Waters that are hard to quantify. 

Regular installation and maintenance of green infrastructure provide local jobs. Greenery beautifies neighborhoods, and some studies show it can reduce crime and improve mental health. It’s also more climate-friendly than tunnels, which require copious energy to pump out after storms. 

Robert Traver, an environmental engineer and director of Villanova University’s Center for Resilient Water Systems, said it’s taken hundreds of years to pave over the city, and that such benefits are worth the time it will take to green it.

He said green infrastructure can improve air quality and the heat island effect, adding that such projects make it " a little prettier to walk down the street, especially in environmental justice communities and low-income neighborhoods that don't have a lot of green."