Super-Soaker - Water board seeks 18% hike

In the face of the last July’s 11.5 percent water rate increase, the New York City Water Board is going back to the well - calling for another whopping increase of 18 percent this coming January.
City Councilmember James F. Gennaro, who chairs the council’s Environmental Protection committee, calls the proposal “greedy and superfluous” and has once again joined forces with Councilmember David Weprin, who heads the Finance Committee, to fight the proposal.
According to the Department of Environmental Protection (DEP), there was lower-than-expected water and sewer revenue in the month of September, and the DEP is concerned that the revenue shortfall will continue.
Gennaro is not impressed. “Revenues were up in July and August” he insisted, and joined with Weprin in calling the threat a “ploy” by the Board.
“What’s funny is that they print ‘save water’ on the envelopes they use to send out the bills, and the first time revenues decline they will seek another increase,” Gennaro had quipped to The Queens Courier before the last increase.
The recent announcement bears out his prediction. “I guess I’m smarter than I thought,” he mused. “What is outrageous is that in September, collections were off by $30 million and the 18 percent increase they want would yield $360 million. Who are they kidding?” Gennaro asked, rhetorically.
“Tax payers should not be penalized for ineptness and antiquated collection methods by the DEP,” Weprin insisted.
“They want the ability to get and sell stand-alone water liens against property owners” Gennaro said. “But their billing is so screwed up that there’s no way (the Council will) give them that leverage over homeowners until they get their act together.”
Weprin agreed and said, “A rate increase is not the answer to the problems facing the DEP. The system used to collect money is clearly broken and antiquated.
A consulting firm hired by the DEP will be issuing a study on New York’s water billing system shortly.
In published reports, preliminary excerpts from the $1.8 million study state that, even with improved billing and more forceful collections, the city may have to forego more than $175 million owed by 9,000 accounts that are more than five years overdue “because errors, uncertainties and outdated information render many of those accounts uncollectible.”
However, 55,000 accounts owe $256 million which is overdue by one to five years and nearly $160 million is owed on 178,000 accounts that have been overdue for less than a year.
New York City has the largest municipal water system in the country, and for years was the only large supplier which never cut off residential service, no matter how much was owed.
Weprin insisted that “There are many options that the DEP can resort to in order to recoup monies owed. It is outrageous that an increase is even being considered when the DEP hasn’t exhausted other options out there.”
During a pilot program this summer, the city acted against over 20 single family homes where water bills were delinquent for less than two years, and the homeowners had broken payment agreements. They were told their water would be cut off if they didn’t pay in 30 days.
Most stalled, until city workers painted marks on the street in front of the property, to outline where to dig so the water could be shut off. Everyone paid almost immediately, except for one household with young children, which got assistance from the Human Resources Administration to pay the bill.
The city is considering extending the program to 8,500 other single family households. Still, collecting old debts is a one-shot revenue influx.
“The problem is that the city is still collecting rent from the Water Board, which was legislated to pay-off capital bonds issued before 1985, when the board was created,” Gennaro said. “Most of the bonds have been paid off, but the rent hasn’t been reduced to keep pace.”
Since the City of New York is technically the landlord of the water system, “the mayor could offer to reduce the rent, but he wants the money,” Gennaro said. “Last year, they paid the city $155 million in rent, of which only $79 million went to debt-service. The city pocketed the other $76 million as general revenue.”
Gennaro said, “That’s essentially a regressive tax, because Donald Trump pays the same for water as a little old lady on a fixed income.”
A spokesperson for the DEP responded, “The Department of Environmental Protection has worked to improve our customer service, billing, and collection operations, but because of lower than expected revenues, an 18 % rate increase may be required under the terms of the bonds that finance the City’s water infrastructure. In addition, we are working to improve collection enforcement by seeking approval for stand-alone lien sales. ”