Water Watch NYC

Everything you need to know about water in NYC.

Category Archives: 2010 Water/Sewer Rate


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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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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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DEP Lays Out Specifics on Amnesty Program

We’ve been tracking the DEP’s new Denial of Access and Theft of Services regulations for a long time. The last thing the DEP told the public about these new regulations was that there’d be a 120-day amnesty period beginning July 1 during which time customers found to be stealing water and/or denying access will not pay the full amount demanded by the new regulations.

The DEP recently released the specific numbers that they intend to use during the amnesty program, and I must say, they are quite reasonable. The new regulations authorize the DEP to charge customers found to be stealing water and/or denying access for water consumption at the 90th percentile. The attributed consumption and charges are detailed in this post. (Be aware though, that since Fiscal Year 2010’s water rate increase was only 12.9% and not the originally announced 14%, the actual costs for this attributed consumption is slightly lower than is listed.)

During the amnesty period, customers are only going to be charged at the 50th percentile, which is the following for commercial properties:

Meter Size –       Annual Attributed Consumption Rate (Gallons per Year)

5/8″ and less                                                                                50,000
3/4″ or more and less than 1.5″                                                   80,000
1.5″ or more and less than 3″                                                    280,000
3″ or more and less than 4″                                                       550,000
4″ or more and less than 6″                                                    1,300,000
6″ or more and less than 8″                                                    2,300,000
8″ or more and less than 10″                                                  4,600,000
10″ or greater                                                                       38,000,000

and the following for residential units:

First Dwelling Unit                                                                         70,000
Each Additional Unit                                                                      60,000

In dollars, this comes to:

Meter Size –                                                          Annual Attributed Cost

5/8″ and less                                                                            $       452
3/4″ or more and less than 1.5″                                                        723
1.5″ or more and less than 3″                                                        2,530
3″ or more and less than 4″                                                           4,971
4″ or more and less than 6″                                                         11,748
6″ or more and less than 8″                                                         20,786
8″ or more and less than 10″                                                       41,572
10″ or greater                                                                            343,417

and:

First Dwelling Unit                                                                            $633
Each Additional Unit                                                                           542

I expressed my frustration when I thought it was too high; it would be unfair of me not to express satisfaction at these extremely reasonable figures.


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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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What No One Else is Telling You About Next Year’s Water Rate

Every year the Water Board raises our water rates at the request of the DEP. All the news outlets, even if they don’t bother covering the Water Board meetings during the year, attend the meeting in April when the rate hike is discussed. They make a note of how much the rates are going up by and then go to press. This is why most news outlets missed the really big news about next year’s new rate schedule.

After the DEP and Water Board discussed the 14% rate hike and all the journalists pocketed their pads and left, Steve Lawitts (Acting Commissioner of the DEP) and Alan Moss (Chair of the Water Board) rolled out two of the most anti-consumer documents ever written by the DEP. The DEP has actually been quite clever (read: devious) in putting these documents together. They’ve published the regulations governing two penalties in three different amendments, each of which on its own seems pretty harmless but all of which, when taken together, paint a pretty grim picture for New Yorkers. (Even the names they chose for these amendments–Denial of Access and Theft of Services–appear to be clever tricks. Who wouldn’t want to punish thieves? Unfortunately, actual theft has very little to to do with the Theft of Services regulations.)

Apparently the DEP has had trouble getting access to many buildings in the city and feels it necessary to set up penalties for denial of access. They’ve also defined fifteen items that qualify as “Theft of Service.” For both “Theft of Services” and “Denial of Access” (during the last water board meeting they explained that they equate denial of access with theft of service because if you don’t allow them access it must be because you are stealing water and don’t want them to know about it) stiff penalties, ranging from just over $3,500 to just under $2,000,000 annually, will be imposed. For the actual language used by the DEP in these new regulations, please see the three amendments that I have linked to below:

  1. 20090403_proposed_rate_schedule_denial_of_access_-_theft_of_service_charges_web_draft.doc,
  2. 20090406_denial-of_access_regulation_web_draft.doc,
  3. 20090406_theft_of_service_regulation_web_draft.doc

Here are the main problems with these new regulations:

  1. The DEP equates suspicion with actual guilt. There is no requirement for the DEP to prove that any theft is taking place. Theft of Services is not defined as someone stealing water but rather as a violation of one of a series of actions unrelated to actual water consumption, like breaking a meter’s DEP seal or moving or obstructing a meter. The DEP doesn’t even need to prove that the owner performed any of these actions. If they were done, it doesn’t matter who did them–a disgruntled tenant, an uncaring vandal–the owner is responsible.
  2. The magnitude of the penalty doesn’t even come close to fitting the supposed crime. The charge is based on the size of the building’s main or mains and is entirely arbitrary and is designed to bring maximum revenue to the DEP. It doesn’t reflect any form of water consumption actually used or assumed to have been stolen.
  3. In order for “Denial of Access” to apply, the DEP must simply send a letter to the owner that they have on file. For such a large penalty shouldn’t the DEP be required to go a little bit out of their way and ensure that whoever is listed as the owner on their records is actually the owner and then send the actual owner a notice of demand via certified mail with a read receipt?

To go into more detail on item number 2, the DEP published a very confusing chart detailing the penalties for both Denial of Access and Theft of Services (by their definitions). Here it is:

Meter Size –       Annual Attributed Consumption Rate (Gallons per Year)

5/8″ and less                                                                              400,000
3/4″ or more and less than 1.5″                                              1,000,000
1.5″ or more and less than 3″                                                 3,000,000
3″ or more and less than 4″                                                    5,000,000
4″ or more and less than 6″                                                  10,000,000
6″ or more and less than 8″                                                  25,000,000
8″ or more and less than 10″                                                50,000,000
10″ or greater                                                                     200,000,000

You’ll notice that the Annual Attributed Consumption Rate is given in Gallons per Year. Anyone who has ever examined their water bills will also know that the DEP charges for water based on hundred cubic feet (hcf) of water consumed not gallons, thus making it difficult to determine how much the DEP actually intends to charge for these violations. Let me make it easier by converting annual attributed consumption in gallons to an annual cost in dollars. Please note that the figures that I’m about to set forth are different than the figures presented at the last Water Board meeting. The costs that we were told about at the last Water Board meeting were given at the fiscal year 2009 water rates. These regulations go into effect in fiscal year 2010, when the rates are likely to be 14% higher. Here are the charges of the annual attributed consumption rate by meter size for fiscal year 2010:

Meter Size –                                                          Annual Attributed Cost

5/8″ and less                                                                   $        3,641.64
3/4″ or more and less than 1.5″                                                9,104.22
1.5″ or more and less than 3″                                                 27,312.79
3″ or more and less than 4″                                                    45,521.37
4″ or more and less than 6″                                                    91,042.74
6″ or more and less than 8″                                                  227,606.84
8″ or more and less than 10″                                                455,213.83
10″ or greater                                                                    1,820,855.00

That’s right, if you own a building with two 8″ mains and the DEP determines that you have denied them access for one year, you owe them just under a million dollars. What’s more, if they decide that you’re stealing water (lets say some thug broke the seal on your meter) you are going to be charged these rates going back four years unless you can prove that the violation occured more recently.

Hopefully now you understand what the DEP actually intends. To ensure that you are protected  from these unjust penalties, it is important that you join us in fighting the Water Board on this. There will be a city council hearing on Tuesday, April 28 at 10:00 am in the Council Chambers of City Hall. We hope to see you there. Additionally there will be one Water Board hearing in each of the five boroughs for citizens to express their concern over the proposed rate schedule. We expect the meeting in Manhattan on Thursday, April 30 at 5:30 pm (St. John’s University – Manhattan Auditorium, 101 Murray Street, New York, NY 10007) to be the best attended. For the most effective protest, we urge all New Yorkers to show up to this hearing. For more info regarding the hearings in the other four boroughs, click here.


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

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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Guilty Until Proven Innocent? The DEP Thinks So!

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.