How the Leak Forgiveness Program can be Improved to Encourage Conservation

May 2, 2013

The DEP offers customers a discretionary reduction by 50% of certain abnormally high charges resulting from a hidden leak that was discovered and repaired.  To qualify the high bill must be the result of a leak the customer could not be expected to detect readily, such as from an underground pipe.  Running toilets have been specifically excluded.  We believe it works towards the goal of encouraging conservation not to exclude running toilets or other fixture leaks from the program, especially where multi-residential property is concerned.

Under MCP (flat-rate), there is no cost for being wasteful; all consumption is included in the one price, so running toilets and other leaks as well as wasteful tenants may be ignored.  Customers who choose metered billing over MCP choose to exercise control over water consumption, motivated by the goal of attaining a lower bill than on a flat-rate.  However, landlords have no control over tenants who do not pay for water and lack motivation to fix running toilets, but are liable for the charges.  And not everyone recognizes a silent, steadily running toilet.  Common leaks of the sort have a large financial impact.

Besides giving these customers a measure of relief, including running toilets as qualifying properties for the leak forgiveness program will encourage conservation by encouraging customers to keep properties on metered billing and monitor and control consumption  instead of switching to MCP for the safety of a fixed bill that does not encourage conservation.  The leak forgiveness does not reward waste.  The DEP only forgives half the high bill and the customer is responsible for the rest.

1 Comment | 2013 Water / Sewer Rate, Water Board | Permalink
Posted by dvinar

Is Frontage Dead?

May 2, 2013

One year ago, I lamented the fact that the Water Board  had not kept its  20 year old promise to  eliminate frontage.  It  just changed the program name from Frontage to Multifamily Conservation Program (MCP) .  MCP is a “Green” name.  It even has the word Conservation in it.  At that time I acknowledged that the MCP had one advantage over frontage and that was the DEP requirement that owners repair all  leaks and   install low flow water fixtures in 2015.

Well, the Water Board’s  new rate schedule will roll back the compliance date to 2016.  Property owners can safely  stay on the MCP program without taking any conservation measures for three more years.  If past performance is any indication of things to come, the City will most likely extend the deadline for compliance each time it approaches.  Unfortunately, nothing will change until NYC is faced with a drought and then it will be too late to accomplish anything.

Long Live Frontage a.k.A. MCP.

Leave a Comment » | 2013 Water / Sewer Rate, City Council, Water Board | Permalink
Posted by Hershel

What’s Wrong with the Water Board’s Payment Agreement

May 2, 2013

The cost of entering into a payment agreement with the NYC Water Board to get your property out of the water bill lien sale is giving up your right to challenge the accuracy of the charges. If you have a $50,000 outstanding balance on account that is about to go into a lien sale, which will result in hefty fees, and you do not have enough cash to pay the balance, you can enter into a payment plan with the Water Board which will take the property off the lien sale, but you must agree that all of the charges are valid and waive your right to ever dispute any of them.  So if it turns out later that the Water Board misread your meter and billed you ten times what it should have, you cannot demand the Water Board correct the bill and reduce your debt—you are on the hook to pay the overcharges, interest and all.

The terms of the payment agreement charge you the same 9% interest normally charged on open balances and you must make timely payments of all new charges as well as the scheduled payments.  If you default by missing any payment, the Water Board may put the balance back on the lien sale list, but embedded overcharges still may not be disputed.  (And the Water Board does not agree that it may not revise those charges to a higher amount should it find an error in your favor.)

The Water Board is taking advantage of the customer’s lack of any bargaining power in order to coerce customers into waiving their basic economic right to dispute overcharges and obtain equitable relief.  The balance of equities, like the agreement, is one sided.  No customer bargains for these terms.  There is no loss or hardship to the Water Board without this provision which only helps the DEP to unjustified windfalls at its customers’ expense.  On the other hand, there is no real consideration or benefit given to the customer, such as reducing the amount of the debt and/or not charging interest on the debt, in return for entering into the agreement.  The customer enters the agreement because his back is against the wall.  This is coercive and imbalanced due to the government’s far greater power and the Water Board should drop this provision from the payment agreement in the interest of justice.

The lien sale is supposed to aid the City to collect honest debts.  It is not supposed to be a sword used to coerce members of the public into giving up the right to a fair accounting of their debt.  When the City Council authorized the Water Board to sell water tax liens, it failed to safeguard the public from Water Board using the lien sale to coerce the public.

Leave a Comment » | 2013 Water / Sewer Rate, City Council, Water Board | Permalink
Posted by dvinar

Frontage is Dead — Long Live the MCP Program

April 10, 2012

Water Conservation – The big loser in the 2012 Water & Sewer Rates Proposal.

There are two primary methods to bill for water and sewer in NYC. The first method is “Metered Billing” under which the size of one’s bill is solely based upon consumption. The more water consumed the more you pay. If you conserve water you realize an immediate saving.  The second method is Flat Rate billing in which you pay a fixed fee based upon certain characteristics of your building. Once you fee is fixed you can use as much water as you wish without incurring any additional cost. The two most prevalent Flat Rate billing methods in NYC are Frontage and the Multifamily Conservation Program (MCP). Under frontage you pay for the width of the front of your property (hence the name Frontage), height of the building, number of apartments, number of plumbing fixtures and other physical attributes, and under the MCP program you pay per apartment.

For as long as I can remember conservationist have been urging the NYC Water Board to eliminate frontage billing. Experience has shown that homeowners  will reduce their consumption if they  are forced to pay for what they use. The Water Board agreed with this in principle, and  back in the 1990s they mailed out letters to all customers stating that frontage would end in two years. Customers were urged to install meters and repair their leaks or face large bills. At the last moment the Water Board had cold feet and pushed off the deadline for another two years. The pattern kept repeating itself for over a decade. Finally in 2010 the Water Board said they were serious and Frontage would end in 2012. When members of the Water Board were asked why anyone should believe that 2012 would be different, they pointed out that Mayor Bloomberg was a lame duck and serious about conservation.

Well they are finally doing it. On March 30 the Water Board announced the end of frontage.  Bloomberg is good as his word. There is, however, one caveat: Everyone on frontage will be moved to the Multifamily Conservation Program. The rate for the MCP program will be the average of all frontage rates. In short all that has been accomplished with fourteen years of conservation lobbying is a change in the name of the flat rate billing program!

To be honest the program will require all building on the MCP program to install Water Sense Plumbing Fixtures and repair any leaks. This should result in some savings. The problem is that there is no motivation for anyone to continue repairing their leaks unless you believe the DEP when they say that they will be monitoring your consumption and throw you off the program if they detect leaks.

I never believed that the DEP would eliminate frontage. There are just too many reasons to keep billing on fixed rates. Fixed rate bills are generally paid on time by the mortgagee while metered bills are paid by the homeowners and chronically late. Furthermore: fixed rate bills are paid a year in advance. But most important is it really fair to ask property owners to pay fluctuating bills caused by their tenant’s consumption while maintaining fixed rate Rent Stabilization?

4 Comments | 2012 Water & Sewer Rates, Water Conservation | Permalink
Posted by Hershel

Winners & Losers – Proposed NYC 2012 Water Rate Schedule

April 10, 2012

The proposed 2012 rate schedule will eliminate Frontage, modify the Multifamily Conservation Program (MCP), cap the rental agreement, and bar some properties from flat rate billing. As with any major change in billing rates there will be winners and losers.

The Winners are:

Properties currently on the MCP program were expecting their current rate to rise to 7% to $1,092. Instead they will see their cost per apartment drop by $197 per apartment per year to $894.

Large apartments with multiple bathrooms that have high consumption toilets would have see frontage rates rise 7% to near $1,000 per unit. Instead the per unit costs will drop to $894 per apartment. The only downside for these apartments is that they will have to replace their high consumption plumbing fixtures by 2015. - It pays to live large.

The Losers are

Properties with one bathroom per apartment and low consumption toilets (senior housing) will see their rates increase by up to $150 per unit. -Serves them right for leading a frugal existence.

Properties without any regulation will no longer be eligible for the MCP program. – Serves them right for trying to be independent.

Leave a Comment » | 2012 Water & Sewer Rates | Permalink
Posted by Hershel

Proposed 2012 Water And Sewer Rates

April 5, 2012

The Water Board is proposing sweeping changes to New York City’s Water and Sewer Rates for fiscal 2012.  The following is a highlight of the changes to become effective

  • Multi Family Conservation (MCP) Rate will drop from $1,020.49 to $894.15 per apartment
  • A new MCP rate for “Low Consumption Commercial Unit” was created at $736.13 per store.
  • Meter rates for water and sewer will rise by 7 percent from $8.21 to $8.78 per hundred cubic feet (748 gallons).
  • Frontage Billing will cease to exist after June 31, 2012. All buildings on Frontage will be moved to MCP Rate. These buildings will have until June 31, 2015 to comply with MCP guidelines including but not limited to replacing all plumbing fixtures with Water Sense Plumbing fixtures.

1 Comment | Uncategorized | Permalink
Posted by Hershel

DEP and Water Board Agree: Revenue Good (But What’s Conservation?)

July 15, 2011

The DEP has been promoting water conservation for two decades, since the droughts of the 1980s.  But June 17, 2011, the Water Board’s last meeting of the fiscal year, marked the end of an era of “conservation” rhetoric. Gone are the days of saving water and taxpayer money. The future is all about increased sales and maximum revenue: consumption, not conservation.

Source: NYC Water Board Financial Update – 6/7/2011

According to their financial presentation, the DEP collected $2.68 billion from residents last year and surpassed their own revenue projections by 2%. The good news: that’s the first time since 2005 that they haven’t made less money than hoped. The bad news: that’s also almost nine billion more gallons of water used, plus the $51 million more that taxpayers coughed up to pay for it. So why, after worshiping ‘less is more,’ are more water and more revenue suddenly a triumph? Over the past ten years, usage decreased for all but two of them (see the Water Board’s report, page 29). Now, with our water use back up to near 2009 levels, water is just a stream of revenue again.

Pay no attention to how our water rates are higher than ever, every year. (This year’s 7.5% hike to $8.21 is somehow the lowest rate hike since 2006.) All that seems to matter to the DEP and Water Board is that more people get more water and pay more and more for it. The leading concern of the Water Board, according to their Mission Statement, is whether “revenue collections will satisfy revenue requirements of the [Water and Sewer] System.”

The only kind of waste that makes sense in this System is wasted potential: water not sold, consumption not metered, bills not paid. More revenue can be good for the whole city. It just depends on why there’s more of it. More paying customers come naturally with more people in the city, which in turn requires expanded services. Still, the DEP has maintained that distributing more water will bring down its cost to residents. The ‘reduced increase’ of this year’s rate seems to corroborate that a bit, yet the DEP can only continue to reap increasing revenue at the increased expense of residents. Is such public service really self-service or endless debt service? For instance, are “same-customer sales” a real measure of success for a public agency? Does the fact that each customer paid (on average) 19.2% more in October 2010 to use 6% more water than in October 2009 constitute a win for New York City?

As it is, revenue maximization is our current course. Meanwhile, conservation is a promised land saved for rainy days. Where we’ll end up, though, depends on who adjusts the sails.

6 Comments | 2010 Water/Sewer Rate, 2011 Water/Sewer Rate, DEP, Drought, New York City, Water Board, Water Board Meeting, Water Conservation, Water Rate Hike | Tagged: , , , , , , , , , , , , , , , | Permalink
Posted by amorganashokan

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