Another 14% Rate Increase… and That’s Not All!

April 3, 2009

On Friday (April 3, 2009) the Water Board held its once-yearly meeting to discuss the upcoming year’s rate schedule. Here are the highlights:

  1. The DEP asked for a 14% rate increase, which would take the cost of water and sewer combined to nearly $7 per hundred cubic feet. Remember, this comes after last year’s 14.5% percent increase and 2007′s 11.5% increase, when we were assured by the DEP that 11.5% would be sufficient for the next two years (2008 and 2009). Clearly, that didn’t happen.
  2. Frontage was not discussed at all. You may remember that the Water Board initially told us that this year would be the last year for frontage. Then they extended it for one year only. By not mentioning it this year, they’ve essentially kept the extension in place another year. A source close to the situation tells me that they plan on extending it at least another two years after that.
  3. They finally put a number on their proposal to penalize New Yorkers who do not allow access to their meters. If this plan makes it into next year’s rate schedule, building owners who don’t allow DEP inspectors to read their meters will be charged, depending on the size of the water main, anywhere from $3,198 to $1,598,930 per year. And that is not a typo.
  4. One nice thing that was mentioned at the meeting was that they are attributing a 6% reduction in consumption over the last year to the efforts of conservationists. Of course, they also use this statistic to justify the magnitude of the rate increase.

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Posted by Hershel

A Brief Overview of the Water Board

April 2, 2009

The Water Board is one of three governmental bodies responsible for water and sewer in NYC. (The other two are the DEP, which is in charge of system operation and maintenance, and the Municipal Water Finance Authority, which is responsible for debt service.)

The Water Board has three primary oversight functions, all relating to the DEP. These three functions are:

  1. To review and regulate the DEP’s operations and costs.
  2. To set the rates for water and sewer service in New York.
  3. To arbitrate and respond to customer complaints about the DEP.

Now let’s briefly discuss what the Water Board actually does as it relates to these three functions.

  1. The Water Board rarely gives any notice to the DEP’s budget or operations. Recently, they’ve been more concerned with their own budget, which, by the way, is less than 0.001% of the DEP’s budget. The only time they discuss the DEP’s budget and operations is when the DEP asks them for money to fund a project that they don’t want to send out for bidding. Their answer whenever the DEP asks them for money is either to immediately and without deliberation say yes or to put it off until the next meeting, at which time they immediately and without deliberation say yes.
  2. Every year the DEP must determine how much money it needs to operate and how much it needs to charge for water in order to raise that amount of money. They then ask the Water Board to set the water/sewer rate at some number that will help them achieve their goals. The Water Board is meant to examine the DEP’s current and projected expenditures to determine whether or not the rate that the DEP asks for is appropriate. The Water Board never examines; they simply approve, no questions asked. In the rare case that the Water Board does start doing its job, like when members Jim Tripp and Marilyn Gelber started asking tough questions last year, those members find themselves off the Board.
  3. There is an appeals process when one has a DEP billing complaint. Part of that process is to appeal to the DEP Commissioner, Steve Lawitts. If denied, you must later turn to the Water Board, where your complaint is reviewed by the Water Board’s Executive Director, the same Steve Lawitts (Lawitts is also on the Municipal Water Finance Authority) or his Treasurer, William Kusterbeck. To my knowledge, no complaint has ever reached the desk of any Water Board member. How many governmental agencies do you know of that have no third party oversight committees and are instead overseen by the same people making the mistakes in the first place?

1 Comment | DEP, Water Board | Tagged: , | Permalink
Posted by Hershel

Guilty Until Proven Innocent? The DEP Thinks So!

March 2, 2009

A new feature to the water/sewer rate schedule was discussed at Friday’s (February 27) Water Board meeting. It was proposed that New Yorkers who deny the DEP access to their premises be penalized and automatically switched to the highest possible rate.

Water Board Executive Director Steven Lawitts (he’s also the Acting Commissioner of the DEP) explained it this way (and I’m paraphrasing): If they’re not letting us in, it must be because there is some funny business going on. They’re probably bypassing the meter and using water that they’re not being charged for and they don’t want us to know. Therefore, they deserve to get penalized.

Sure, a penalty is not a bad idea. But it just rubs me the wrong way that the DEP and the Water Board think that it’s ok to assume that someone is stealing water just because access is being denied.

(Just a side note: If you happen to take a look at the DEP website, you’ll notice in the “Service Advisories” section on the right side of the homepage a message that warns people to be wary of “impersonators posing as DEP Employees.” Can you really assume that DEP employees are being denied access to buildings because of theft when the DEP itself is warning people about the potential dangers of letting DEP employees into your building?)

There is another problem here as well. A policy that the DEP claims will be put into use to penalize customers and ensure access will no doubt turn into just another way for the DEP to unfairly raise capital. They have done the same thing with the surcharge for unmetered buildings and the original plan, to ensure that all buildings install water meters, turned into just another revenue stream.

I’m not one to throw around indiscriminate criticism. I mention this because I believe there is a better way of handling it. It is true that there is a problem when the DEP is denied access to a meter. They are forced to estimate consumption and could end losing a lot of money with an inaccurate estimate. (They can also end up charging too much, another scenario that should be avoided.) But instead of the unjust penalty that the Water Board and DEP were discussing last week, why not just issue an Environmental Control Board (“ECB”) violation that states that if access is not granted within a fixed period of time then a penalty will be issued and hopefully one that’s a little more reasonable than the bill cap rate, maybe something in the range of $250 to $1,000.

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Posted by Hershel

Looks Like We’re in for Another Huge Rate Hike

February 4, 2009

At last week’s Water Board hearing we learned that so far, collections have been below expectations during every month of the current fiscal year. Chairman Moss blames the economy and conservation (!).

It wouldn’t surprise me if they try to make up for it by raising our water/sewer rates next year an astronomical amount.

As always, we’ll keep you posted.

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Posted by Hershel

Recap of Last Week’s Water Board Meeting

December 26, 2008

The two new Water Board members were introduced at last week’s meeting. They are Marcia Bystryn and Benjamin Tisdell.

We are particularly interested in the appointment of Ms. Bystryn. She is currently the Executive Director of the New York League of Conservation Voters and has presumably been appointed to fill the void left by recently vacated, environmentally-concerned Jim Tripp.

Also, Chairman Moss has announced austerity measures at the Water Board. Namely, they will no longer be offering free cake at the morning meetings. I’m not sure how this will help a Water Board that has increased the capital budget from $7 billion to over $21 billion during Mayor Bloomberg’s tenure.

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Posted by Hershel

Mehul Patel Appointed to Water Board

November 21, 2008

WaterWatchNYC wishes to congratulate Mehul Patel, Vice President of Moynihan Station Development Corp., on his recent appointment to the Water Board.

We wish him much luck and hope that he has the courage to stand up for what’s right.

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Posted by Hershel

Shakeup at the Water Board

November 18, 2008

While the mayor has said that he would renegotiate the rental agreement with the Water Board, the current fiscal crisis facing the city is making that scenario seem quite unlikely. This means that the Water Board is going to continue paying the city exorbitant fees for the use of the reservoirs and subsequently, New Yorkers’ water rates are going to continue to climb astronomically.

Former Water Board Chairman Jim Tripp set a bold precedent recently when he resigned his post in protest of the mayor’s intransigence. Since then, two more members have left the Water Board, Marilyn Gelber and Maria Santos Valentin. It seems that no one wants to be the bad guy blamed for New York’s upcoming rate increases.

Meanwhile, the Water Board is holding a public hearing on Thursday, November 20, most likely to announce three new members. (The new members are appointed by Mayor Bloomberg and will no doubt support his position on the lease agreement.) Details can be found on the Water Board website.

With three of the board’s members expected to join this week, a majority of its seven members will have been sitting on the board for less than two years. (Current chairman Alan Moss was elected in early 2007.)

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Posted by Hershel

New Acting DEP Commissioner Appointed

November 18, 2008

The DEP’s Deputy Commissioner, Steve Lawitts (who, if you remember, was biking through Amsterdam when former Commissioner Emily Lloyd announced her resignation), has been appointed Acting Commissioner of the DEP.

He previously worked for the Department of Sanitation and currently retains his post as Executive Director of the Water Board. (UPDATE 4/21/09: He is also a board member on the Municipal Water Finance Authority. Now all he has to do is get elected mayor and he could control every aspect of water in NYC!)

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Posted by Hershel

The Water Board’s Not-So-Public Notice

October 17, 2008

On September 29th, the Water Board released a public notice regarding the extension of frontage. Any recent visit to the Water Board website and you’re bound to find this public notice, right? Wrong!

This new public notice is secreted away with nearly a dozen other obscure public notices. The is no indication on the site’s homepage that there is a new public notice to be viewed; they just took a controversial issue like extending frontage and did what they could to pass it below the radar without notifying people that it’s happening or what they can do to protest it.

The internet should be used to share information. The Water Board didn’t even have a website until less than a year ago, opting instead to keep all their goings-on a secret. We thought that their new website would be a great way to finally inform the public about the operations of a city entity that had previously been shrouded in secrecy. But if the Water Board isn’t using their website to share information and inform the public, what is it for?

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Posted by Hershel

The Lease Agreement Explained

October 16, 2008

As a response to a comment by a loyal reader on a previous post, I would like to briefly explain what’s known as “the lease agreement.” This will hopefully help readers understand why it is such a hot-button issue (Jim Tripp resigned over it) and even why the DEP and Water Board charge so much for water.

The reservoirs that serve New York City belong to the city. The city has authorized the DEP and various other bodies (the Water Board, the Municipal Water Authority) to distribute water throughout the city, collect payments for the water used, perform capital improvements on the infrastructure and, most importantly, to borrow money to pay for the capital improvements (what each body does in this scheme is not that important and is, frankly, pretty complicated). In order to do all of this, the DEP (for simplicity’s sake, from now on when I refer to the DEP, I mean the DEP and the other bodies that deal with water) needs to use the reservoirs. The city has allowed the DEP to use the reservoirs, but for a price.

This is where it gets complicated. Instead of charging the DEP a fixed amount to lease the reservoirs, the city charges the DEP a percentage of the amount of money that they (the DEP) borrow for capital improvements.

The outcome of all this is that as time goes on and the DEP needs to sink (no pun intended) more and more money into capital improvements just to maintain a decent quality (and quantity) of service, the amount of money that they are paying to the city for using the reservoirs goes up and up. Therefore, our water rates go up to help pay for the increasing capital improvement and they go up some more to pay for the increasing price of the reservoirs’ lease.

The further injustice of all this is that the city then takes this money and uses it for whatever they want. They get the money from the DEP which gets it from those of us that use water in the city. They get the money from us and the DEP specifically for the water infrastructure. And then they turn around and use it for whatever else they want.

At this point it is just another way for Bloomberg to get money without raising taxes. It seems like a good deal: the city gets money and since our taxes don’t go up, we think we’re not paying for it. But anyone who has seen their new water bills knows that we definitely are paying for it – to the tune of $5.98 per hundred cubic feet of water.

1 Comment | DEP, Upstate Reservoirs, Water Board | Tagged: , , , , , , , | Permalink
Posted by Hershel

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