Billions over Budget: Questions Swirl over Philly’s ‘Green’ Fix for Sewers

This report was originally produced by “Our Water Matters,” an ongoing series published through an editorial collaboration of Pennsylvania-based publications Grid magazine, the Chestnut Hill Local, and Delaware Currents.

Ever since the Philadelphia Water Department (PWD) created a plan to fix its archaic sewer systems in 2011, proponents have held up the resulting program — Green City, Clean Waters — as a crown jewel of the department.

But more than a decade later, signs are emerging that the nationally-recognized plan might be serving as a drain on the utility’s coffers — by the billions.

The program was originally pitched as an innovative, cost-effective way to deal with the billions of gallons of raw sewage that overflow annually from the city’s vast expanse of aging sewer lines and spill into rivers and creeks. While an originally estimated $2.4 billion price tag for the 25-year program is no small amount, proponents who argued for its creation said that sum would provide a major discount compared to typical alternatives.

In cities like Milwaukee, Chicago and Washington, D.C., many billions of dollars have been spent solving sewer issues by drilling giant underground tunnels to store excess sewage until enough treatment capacity becomes available to treat it. But in Philadelphia, Green City, Clean Waters is instead designed to install thousands of diffuse pieces of “green infrastructure,” like rain gardens and tree-lined sidewalks, to capture rainwater and keep it from ever overwhelming sewer lines in the first place.

Supporters like Howard Neukrug, former commissioner of PWD who spearheaded the creation of Green City, Clean Waters, says its price tag paled in comparison to tunnel proposals.

“All the tunnels have nicknames. Ours was ‘the 100-year-tunnel,’” Neukrug said in an interview last year. “That’s how long it would take for us to be able to, in a city like Philadelphia, find the $10 billion dollars, put it in the rate structure and have people pay for this thing.”

But the costs of the green program have quietly ballooned to at least $4.5 billion at its halfway mark, according to both publicly-available financial documents and PWD employees, placing it at least $2 billion over original cost estimates. Costs are primarily borne by Philadelphians, who pay via a designated “stormwater charge” on their monthly water bills.

In a series of interviews, three PWD employees with direct knowledge of Green City, Clean Waters, who spoke on the condition of anonymity to avoid professional reprisal, say they’re concerned about cost increases and whether green infrastructure works as well as envisioned. Meanwhile, recent internal estimates of the costs to install tunnels instead have come in significantly lower than originally predicted over a decade ago.

According to the employees, the cost of greening an acre of land in Philadelphia has jumped from an original estimate of about $175,000 to above $500,000, 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-off due to poor soil conditions or pollution. In other cases, the installations only partially work, requiring expensive repairs or ongoing maintenance.

And, the employees said, there are internal conversations amongst PWD staff that they are running out of public space to install new green infrastructure, and that measures to spur adoption by private landowners are not meeting expectations. As previously reported, at current rates of installation, PWD is indeed on pace to miss the EPA’s mandate of greening 9,500 acres by 2036.

Saving Green?

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

When formalized in 2011, officials said about 70% of the money spent on Green City, Clean Waters would go toward green infrastructure, while 15% would go toward traditional “gray” infrastructure and another 15% would remain flexible. But with more than a decade of data now in hand, employees and clean water advocates question whether that ratio is still the right one.

In 2021, an internal working group was established within PWD to freshly assess cost differences between green infrastructure and more traditional options such as large tunnels. According to internal documents, a meeting was held on green infrastructure costs in May 2023. During that meeting, documents show, PWD employees presented information concluding that costs to install a single “greened acre” (a term used to refer to the volume of water green infrastructure can hold during a storm; it does not measure land area) had reached an average of $348,000.

That figure represented about a 100% increase over the $150,000-to-$200,000 cost, according to department documents and employees, that PWD originally estimated a decade ago. Two employees say even more recent calculations now place the cost to install a greened acre above $500,000.

PWD records show the utility still has some 6,700 acres left to green by 2036 under their agreement with the EPA. If the cost of each acre averaged $500,000, the total would reach $3.4 billion — on top of what has already been spent on the program.

PWD declined an interview request for this story, but a spokesperson provided detailed written responses to questions and said the most recent total cost estimate of $4.5 billion included future expenses.

At the May 2023 meeting, PWD employees also noted a steep rise in the costs of maintaining green infrastructure. The original 2011 plan, they said, estimated annual operations and maintenance costs for street trees, rain gardens and green roofs would cost a few thousand dollars a year per acre. 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 to $12,000 a year per greened acre.

Exacerbating the problem, while employees at the meeting stated that administrative costs of the program should not increase linearly with the number of greened acres installed, that’s exactly what was happening. Over the prior five years, such program costs rose from about $1.1 million to $2.1 million a year, according to analysis relayed at the meeting.

A PWD employee familiar with the program says that when original financial estimates were made, planners and leadership assumed the costs of installing green infrastructure would decrease as efficiencies of the program progressed and designs and procurement became standardized. But that largely hasn’t come to pass, they say. Variables such as soil conditions have proven finicky, prematurely ending the lifespan of some installations and requiring custom designs for many. These problems have in turn shifted the anticipated lifespan of a typical green installation from 25 to 40 years to less than 20, driving up maintenance costs and keeping design costs high, the employee said.

These twin problems create a catch-22: spend a lot of money upfront on custom designs that have better chances of working, or pay on the backend when more generic installations start to break down.

“Some designers are very frustrated because they don’t feel like they’re doing the best designs they can,” the employee says. “Because they’re just trying to hit an [installation] target — an insane target.”

PWD did not deny Green City, Clean Waters has seen significant cost increases, confirming it had calculated that costs to install a greened acre had risen to $348,000 as of 2020, due to labor and price disruptions following the COVID-19 pandemic. But, the utility pushed back on the idea that cost increases were due to major flaws with the program’s design.

Of 830 pieces of green infrastructure installed in the last 13 years, only 20 have been “retired or [are] pending retirement,” the department said. It also claimed that PWD “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 [green] 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.”

The utility’s response also touted the program’s successes, including an estimated reduction of 3 billion gallons of sewage overflows a year through the installation of more than 2,800 pieces of green infrastructure, while supporting “both jobs and green economy creation.”

The utility also disputed that the program’s administrative costs had grown unwieldy.

“While it is accurate that the program management costs have increased, they have done so commensurate with increased responsibility,” PWD said. “This program management budget supports tasks including asset tracking, work order management, and materials management, among others.”

Green vs. Gray

Though there are no signs publicly that the Philadelphia Water Department has any doubts about its commitment to Green City, Clean Waters and the program’s prioritization of green infrastructure, internally, the picture looks different. Employees say the program has been polarizing from the outset, sorting people both inside and outside PWD into camps that “support” or “oppose” Green City, Clean Waters.

“I came in very excited and invested in green infrastructure, but over time I understood the limitations and challenges with implementation,” says one employee, who’s been with the utility for over a decade and has firsthand knowledge of aspects of Green City, Clean Waters. “The ‘non-green’ people stayed skeptical, but the ‘green people’ became skeptical just seeing these challenges.”

Some PWD employees also say they are concerned that leadership at the department is unresponsive and has yet to seriously consider changing course on the sewer program.

“They’ve never had a backup plan,” one employee says. “So many people have their reputations wrapped up in this. Nobody wants to say anything.”

Sources place particular blame on PWD commissioner Randy Hayman for a perceived failure of leadership. They say they were surprised to learn he’d been retained by Cherelle Parker’s administration after several employees explicitly made their concerns known to the mayor’s team during the transition period.

“All evidence to the contrary,” Hayman said in a written response to the accusations. “Our team has continually utilized data collection, analysis and planning processes to evaluate progress, make program enhancements, identify risks and opportunities, and ensure we are making progress as needed.”

But some PWD employees insist that the department is uninterested in changing tack. For proof, they point to the Northwest neighborhood of Germantown.

A Tale of Two Neighborhoods

Underneath Germantown lies the city’s most polluting combined sewer line, which dumps hundreds of millions of gallons of diluted sewage into the Frankford Creek each year. The undersized pipe is also the culprit of basement sewage backups and contributes to area flooding, causing up to $8.72 million in property damages each year, the PWD’s own estimates show.

Germantown is also the site of the only major tunnel proposal the Philadelphia Water Department currently has on the books. Early assessments estimate that placing a large tunnel there could reduce flood depths in Germantown by as much as 80% and eliminate up to two-thirds of basement backups.

But, some PWD employees say, any progress on the idea has languished as green infrastructure continues to take priority within the department.

“It’s just something that’s never going to advance,” says one employee with knowledge of capital projects.

They add that the project has been put into a sort of assessment purgatory. In 2019, engineering firm CH2M delivered a 17-page study to PWD identifying potential traditional infrastructure projects to help in Germantown, such as a large tunnel. The next year, PWD convened a community task force to discuss flooding in the area.

But then, employees say, a decision was made to further study the possibility of a tunnel and PWD opened a new contract for a preliminary assessment. While the department has selected the engineering firm Brown and Caldwell for the work, it is still seeking federal funding to pay for it. The proposal is now more than a year behind schedule with no apparent start date on the horizon, while the price tag for the study — $5 million — represents only a fraction of a percent of what PWD is spending on Green City, Clean Waters.

However, PWD pushed back on the notion that the new study is in any way superfluous, saying it is “necessary to confirm additional areas of feasibility and optimize our design.”

“PWD is very diligent at utilizing its funding and does not intentionally delay projects,” PWD added.

Internal PWD documents show that costs to construct such a storage tunnel are likely substantially lower than what original estimates predicted in 2009, when the push for a green-infrastructure-first approach was underway.

In 2022, the working group established within PWD to re-evaluate costs held a meeting on tunneling options. Information presented showed that in 2009, PWD had estimated a large sewer tunnel, depending on its width and length, could cost anywhere from about $400 million to $1.7 billion to build.

But more recent cost estimates for a tunnel under Germantown came in significantly lower after examining real-world projects like the tunnels Washington, D.C. is digging. In one scenario, the new estimates showed a 20-foot diameter tunnel stretching more than five miles could be built for about $750 million, compared to a 2009 estimate that ran over $1 billion.

Josh Lippert, a professional floodplain manager and former chair of Philadelphia’s Flood Risk Management Task Force, says he believes the reluctance to push forward with a Germantown tunnel is largely due to a lack of political pressure. In trendy Northern Liberties, he notes, PWD is spending more than $93.5 million on traditional infrastructure to fix the buried Cohocksink Creek combined sewer line and cut down on flooding. But in Germantown, a predominantly Black and working class neighborhood where a 27-year-old mother drowned while driving in 2011, the status quo remains.

“We’ll continue to have fatalities because they did a million-dollar study that has now sat on the shelf because there is no political action to take that forward,” Lippert says.

PWD again pushed back on this notion, noting the Germantown project is about five times the scale of Northern Liberties.

“When completed, the cost of the [Germantown] flood relief project will dwarf expenditures in the Cohocksink flood relief project,” the department said. “It would [also] be inappropriate to draw a comparison of expenditures at two very different points in the process.”

D.C. Asks: “To Green or Not to Green?”

Philadelphia isn’t the only major city in the U.S. to weigh the merits of trees and tunnels to stop sewage overflows. In a case strikingly similar to Philadelphia’s, one utility — the District of Columbia Water and Sewer Authority (DC Water) — took a different tack, and has seen significantly different results a decade later.

In the early 2010s, DC Water was renegotiating its own agreement with the EPA over its combined sewer overflows affecting the watershed of the Potomac River, a 405-mile waterway that originates in West Virginia before snaking through the district and emptying into the Chesapeake Bay. The utility pressed to create a green-centric plan similar to Philadelphia, says Dean Naujoks, Riverkeeper for the Lower Potomac River, which had been signed off on and even championed by EPA leadership just a few years earlier. But with the Potomac and its tributaries heavily choked by sewage and other pollution, he was among those skeptical of that approach.

Echoing some critics of PWD’s Green City, Clean Waters, Naujoks says he simply wasn’t convinced that spending billions of dollars on large-scale green infrastructure plans was going to adequately clean up the Potomac and a primary tributary, the Anacostia River, to regulatory requirements. In his experience, the most successful green infrastructure projects were those newly built in large, open space settings. Where planners run into trouble, he says, is trying to retrofit them into dense urban areas like those found inside the Beltway.

“The amount of stormwater that can be picked up from these kinds of pocket parks and retrofits is inadequate,” Naujoks says, adding he believes EPA staff were also concerned the plan wouldn’t meet clean water standards.

As stakeholders began to weigh in both behind the scenes and in public comments for DC Water’s sewer plans, Naujoks says the Potomac Riverkeeper Network threw its support behind an approach that still invested heavily in traditional infrastructure like tunnels.

In the end, that philosophy largely won the day. In 2016, DC Water finalized a $3.3 billion plan called the Clean Rivers Project. John Lisle, spokesperson for DC Water, says that only about $98 million of that sum is directed toward green infrastructure — primarily used to clean the tributary Rock Creek, where DC Water had the most confidence it would serve as a suitable substitute for traditional methods.

“This approach is feasible in this sewershed because of its low [sewage] overflow volumes and because of the lower density of development in the sewershed,” the utility concluded, adding it would still closely monitor progress and change course if needed.

DC Water then plowed most of its funding into the construction of six underground sewage storage tunnels scattered across its coverage area. When fully complete, they will stretch a combined 18 miles and store 249 million gallons of sewage during rain events.

Last year, workers completed a four-tunnel system along the Anacostia that they began drilling in 2011 — a year ahead of schedule and on budget, Lisle says. The utility calculates the system now captures about 98% of sewage overflows and the riverkeeper network is pushing for the first legal swimming event in the Anacostia in more than 50 years.

“The Anacostia is definitely improving,” Naujoks says. “In general we have a lot more swimmable days than we used to.”

What Say the Watchdogs?

While clean water advocates and utilities debate the best ways to reduce sewage overflows, there are three entities with actual power to decide the merits in Philadelphia: the City’s elected officials, the EPA and the Pennsylvania Department of Environmental Protection (DEP).

As previously reported, annual reports issued publicly by PWD for regulatory purposes maintain the program is on-track and even prospering, with the utility currently hitting every regulatory target it agreed to when the program was created in 2011. Chief among them is the greened acre, for which PWD has hit five- and ten-year installation targets. An analysis of annual reports shows that, when adjusted for annual rainfall, the City has achieved about a 21% improvement in sewage overflows from a decade ago.

However, the amount of new greened acres that need to be installed accelerates in each five-year period, and several PWD employees say there is internal skepticism that PWD will meet its next target in 2026. And from the very beginning, some experts have had their doubts about whether a greened acre is even an accurate metric to use to ensure water quality improvements.

According to David McGuigan, a former associate director at the EPA’s regional offices in Philadelphia who oversaw wastewater permitting, some program staff at the EPA 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.”

There is still indication that staff at the EPA hold some reservations about the program.

According to McGuigan, program staff there have withheld approval of 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 says that, as currently designed, the sewer program is ambivalent about where green infrastructure is installed within Philadelphia; EPA staff want it implemented strategically throughout the city to ensure that even smaller, vulnerable waterways like Frankford and Cobbs creeks are protected.

“That’s the underlying battle. The Clean Water Act requires that all cities attain water quality standards for all of their receiving waters,” McGuigan says. “For example, Cobbs Creek — people are there every day. Children play there. When there’s a [sewer overflow] event there, Cobbs Creek will have hazardous bacteria levels.”

McGuigan says Philadelphia has refused to accept requests to add such a watershed-specific approach, which he believes the Clean Water Act requires. In 2012, the DEP issued a draft permit for the treatment plants anyway, but the EPA didn’t 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.

A PWD employee familiar with the issue recalls a flurry of concern in 2016 when the department received a formal letter on the matter from the EPA. Staff performed analyses to determine whether they could comply, but ultimately decided against agreeing to do so. The issue remains unresolved, the employee says. “We haven’t been able to come to an agreement.”

In emails, neither communications staff for the EPA nor DEP took significant issue with this framing. The EPA confirmed it had objected to language in a draft permit the DEP issued in 2013, and says it “continues to work closely with PA DEP to resolve this objection.”

PWD also confirmed it had received a letter from the EPA, but that discussions concluded when EPA “stayed” the letter in April 2017. The utility also hinted at its reasons for pushing back on the EPA’s requests, saying that “modification” of its plan at the halfway mark “would have significant schedule and cost implications.”

At the local level, EPA records obtained via open records requests show that in 2022 and 2023, Philadelphia City Councilmember Mark Squilla peppered Philadelphia Water Department officials with detailed inquiries about their efforts to reduce sewage overflows. He also helped orchestrate a City Council hearing on the topic in October 2022.

Of particular importance to Squilla were “dry weather overflows,” or sewage leaks that occur from the City’s pipes even when it isn’t raining, which are illegal under the Clean Water Act. An August 2023 email from Squilla to Hayman appeared to reflect a deeper frustration at failure to answer wider “outstanding requests” about the sewer program.

“To help respond to questions from Philadelphia residents about why their rivers are not clean enough for wading and recreating, please provide me this information by September 1,” Squilla wrote.

Asked about his communications with PWD in a March 2024 interview, Squilla said that he “whole-heartedly supports” Green City, Clean Waters and framed his interest in the topic as supportive. Squilla primarily wants to assist PWD in finding additional public funding from federal or state coffers to complement the program, he said.

But the councilmember also added that he thinks the City “should be doing more” to address the sewage overflow problem and framed Green City, Clean Waters as “a part of the solution.” Asked if that meant he thinks more traditional infrastructure is needed, Squilla answered affirmatively.

“You know, no matter how much green infrastructure that we build and do, I still think there are going to be things that we need to do as far as old school infrastructure buildout that will put these protections in place,” Squilla said.

While PWD did provide detailed responses to Squilla following his August 2023 email to Hayman, the councilmember said he is still actively pursuing responses from the department on remaining questions.

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 ongoing requirement for the City to ensure the program stays on budget or remains affordable for its ratepayers. The City’s annual reports thus do not include comprehensive financial accounting or analysis of cost effectiveness.

The Big Picture

Lost in this maze of challenges facing Green City, Clean Waters is the evidence that green infrastructure does work, at least at small scales.

When DC Water was performing its own green infrastructure experiment around Rock Creek, the utility found it captured about 20% of sewage flows into the waterway — on the low-end of a 19-to-41% range of expectations.

Philadelphia’s green gamble continues with much higher stakes. The City appears to be making some progress, with its own accounting estimating an annual reduction of about 3 billion gallons of sewage overflows in a typical year. But that leaves it with another 5 billion gallons to go. And while clean water advocates point out that these figures are modeled and don’t account for climate change, no one can say with certainty exactly where PWD will wind up in 2036 if it stays the course.

There are also collateral benefits of Green City, Clean Waters that are hard to quantify. Regular installation and maintenance of green infrastructure provides local jobs. Greenery beautifies neighborhoods, with some studies showing it can reduce crime and improve mental health. It’s also more emissions-friendly than tunnels, which require copious energy to pump the water out after storms.

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

“If I’m the mayor, and I’m spending money, I’m seeing [the benefits of] addressing the heat island effect, a little bit better air quality, a little prettier as you walk down the street, especially in those environmental justice neighborhoods that don’t have a lot of green,” Traver says. “All of those benefits should be brought into the equation.”

Just how much one prioritizes these attributes, compared to the primary goal of cleaning up waterways, colors their assessment of how well the program is working.

And even among those who believe there are major problems with Green City, Clean Waters, uncertainty exists over the alternatives. One such PWD employee estimates that the Germantown tunnel proposal might only get the City about 10% of the way to where it needs to be on reducing sewer overflows, and that there would need to be at least several more constructed.

Still, given all they know about how the program is faring, the employee can’t help but shake the feeling that things have gone awry.

“I often think about, how is this actually going to come to fruition?” they said. “Before you dump more costs into it, the biggest concern looming is, can you even do it?”