Water Watch NYC

Everything you need to know about water in NYC.


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

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.


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A Prediction

Now that New York City’s mayoral election is officially over (though, unofficially, it was over before it started), it is safe to discuss what we at WaterWatchNYC expect of the DEP and the Water Board in the near future.

We have already heard about how water consumption continues to drop drastically in NYC. If I remember correctly, at the last Water Board hearing it was announced the consumption is down another 6-7% so far this year. We’ve also heard a little bit about Booz Allen Hamilton’s preliminary findings in their water/sewer rate study and we know that they were the ones that suggested last year’s disastrous Theft of Service and Denial of Access penalties.

With this in mind, here is what we predict is going to go down at the next Water Board hearing: Because New Yorkers are using less water, the DEP has less money to work with.  Therefore, we can expect to see another double digit rate increase. However, because Booz Allen has made it their job to come up with ways of increasing the DEP’s revenue at the expense of us New Yorkers it is likely that the rate increase will be limited to a figure around 12%. While this sounds like good news, and while the DEP and Water Board will certainly present this as good news, the reality is that the only reason the rate increase will be able to stay that low is because we expect the DEP to implement (at the recommendation of Booz Allen, of course) new fees in addition to the rate increase. Look out for new connection fees and fixed service fees as well as serious increases in all existing fees.


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Water/Sewer Rates Going Up Today

As it does on every July 1, the DEP’s water and sewer rate goes up today. The new rate is $6.76 per hundred cubic feet (hcf) of water, or $2.61 per hcf as a water charge and $4.15 per hcf as a sewer charge (159% of the water charge). One hcf is approximately equal to 748 gallons.

One of the most popular links on this blog during the last 12 months was a graph of the DEP’s Water/Sewer rate from 1980 to 2009. An updated version of the graph, from 1980 to 2010, can be found here.


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Big Surprises at the Rate Approval Hearing

The Water Board held its annual meeting this morning (May 15, 2009) to approve the changes to the Water/Sewer Rate Schedule for Fiscal Year 2010. As you know, WaterWatchNYC protested three major elements of the new rate structure pertaining to the DEP’s proposed “Denial of Access” and “Theft of Services” regulations. Thanks to you, the concerned, active New Yorkers who read this blog, there were many surprising changes to rate schedule announced this morning.

Firstly, as we requested, the Denial of Access notices now have to be sent out via certified mail as opposed to regular mail.

Also, there will be an appeals process put in place for New Yorkers to defend themselves from the DEP’s Theft of Services claim. We have not been informed of the details of this process but it’s certainly a step in the right direction.

Finally, there will be a 120-day grace period for those found to be stealing water, during which time these people will only pay half of the previously announced maximum water/sewer rate. This 120-day grace period is from the beginning of July to the end of October, not the first 120 days after each customer is found to be stealing water.

We want to commend everyone that spoke out against the unfair regulations and helped create these new caveats, especially Councilman Jim Gennaro and the other council members who joined his charge, the property owners and managers that spoke out at the City Council hearing and Water Board hearings and anyone else who voiced their concern and made a difference.

One final thing about this morning’s meeting to take note of is that the proposed 14% rate hike is actually only going to be a 12.9% rate hike. That means that starting in July, out water/sewer rate is $6.76 per hcf and not $6.82 per hcf. Sure, it may have been a tactic to publicly announce 14% when they only needed 12.9% just so they could gain public favor when they announced the lower rate. But either way, what matters is that the rate isn’t as high as initially expected and Commissioner Lawitts and Chairman Moss deserve recognition for that.

Could this be the beginning of a kinder, gentler DEP/Water Board? I guesss we’ll just have to wait and see.


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Does Conservation Equal Higher Water Bills?

I would just like to quickly clarify something about the relationship between conservation, water rates and water bills.

Conservation necessitates higher water rates. There is no way around it: If we consume less of a product (in this case, water) then the product’s variable costs go down. But its fixed costs remain the same which equals a higher cost per unit.

But there is another thing to take into account. If we are conserving water, if we are truly using less of it, then even at a higher cost per unit, our total cost should go down.

Now let’s evaluate the opinion of Coucilman Vacca in the previous post, an opinion shared by many who spoke at last week’s City Council hearing. How can New Yorkers who are conserving water be seeing their water bills go up even as they are dying of dehydration?

The answer is that approximately one-third of the percentage points of the rate hike (4-5%) is going to fund things that are only remotely related to the cost of water, like the unfair rental agreement!

So to conclude: The DEP must stop blaming their rate hikes on conservation. Sure, conservation contributes but if you’re conserving water and your bill is too high, conservation is not to blame. Economics has proven that. The fault lies with the DEP and their enormous budget that continues to spiral out of control.


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The Blog Would Like to Recognize Council Member Vacca

City Council Member James Vacca

City Council Member James Vacca

There was a lot of outrage directed toward the DEP and the Water Board at the recent City Council hearing over numerous issues that we have discussed at length on this blog. Among the more prominent issues were the lease agreement, a lack of accountability and the new “Denial of Access” and “Theft of Services” charges.

One member who I would like to single out (in a good way) for his comments is Council Member James Vacca from the Bronx. His questions were tough, direct and well-researched. He called out Acting DEP Commissioner Lawitts regarding his claim that the DEP has been supporting the efforts of conservation for years. The essence of his question boiled down to the fact that the DEP blames much of the need for such a high rate increase on the fact that revenue has gone down 6% because of conservation. How can you claim support for conservation when your answer to those that conserve is to go ahead and charge them more for it?

Councilman Vacca put it more succinctly: A New Yorker could be saving water to the point where they’re dying of dehydration and their water bill would still go up.

Well said, Councilman. Well said.


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My Testimony to City Council

The following is the text of the testimony I presented earlier today at the City Council hearing regarding the proposed rate increase:

As a result of soaring costs, the Water Board is faced with yet another 14% rate increase. It is also stymied by its inability to gain access to water meters and the minuscule number of customers who are intentionally stealing water from the system. To solve this management problem and raise revenue the DEP is proposing new penalties termed “Denial of Access” and “Theft of Services.” These penalties, called rates, will subject innocent consumers to multimillion dollar fines. The following are a few examples:

  1. The owner of a three family home who has paid every water bill on time but has an obstructed meter or a cut meter seal, quite possibly cut a long time ago, will be liable for a four-year back bill in the amount of $19,751.52, even though there has been no theft of water and no attempt to steal water.
  2. The owner of a warehouse with two 8” mains and an annual water bill of $500.00 who has paid all charges on time and whose tenant inadvertently backed his truck into a water meter and destroyed the meter would be liable for a $3.6 million dollar charge. The property owner would have no way to defend herself. The fine would be the same amount if the tenant just obstructed the meter.
  3. The third case is an example of actual theft but the fine is clearly excessive. A 1,500 unit Mitchell-Lama subsidized housing complex whose superintendent opened a fire hydrant for neighborhood children or whose tenants used the building’s sprinkler system to wash their cars would be liable for a back bill in the amount of $9.3 million. The housing complex could reduce the charge if it could prove that this was the first time a fire hydrant or a sprinkler system was used for domestic purposes. For some perverse reason it would be the guilty party’s responsibility to prove it did not steal water at any earlier time. Of course when defending itself it could not offer any evidence beyond the DEP inspector’s report. Simply put, the Mitchell-Lama may not provide any evidence that is not created by the party prosecuting it.

I honestly believe that it is not the DEP staff’s intent to punish innocent people, but they believe that they need onerous regulations to convict the guilty few. That is not the way the law is supposed to operate in this county. Laws and regulations are supposed to protect the innocent and it is the DEP’s responsibility to prove guilt before defaming a customer’s character with charges of “Theft of Services,” and the accused should have the opportunity to defend himself. I respectfully request that the DEP rewrite these regulations to require the DEP to present conclusive evidence that one is guilty of theft before issuing a verdict of “Theft of Services.” Furthermore the taxpayer must have the ability to refute any charges.

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