Water Watch NYC

Everything you need to know about water in NYC.


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New York City officials should look at Puerto Rico’s crisis and recognize the danger they are in.

water blogMany have heard of Puerto Rico’s recent financial crisis. The crisis  began when the Puerto Rico Electric Power Authority generously provided free power to all 78 of Puerto Rico’s municipalities. Since then, Puerto Rico has shrunk deeper and deeper into debt leading themselves into not only a financial crisis, but also an environmental crisis. Puerto Rico’s municipalities are left with zero incentive to conserve energy. One of the most startling examples is the ice skating rink in Aguadilla. One can’t help but wonder why a town  in the a tropics, would choose to open an ice skating rink given the associated energy costs. However, given free electricity , their largest expense is eliminated, and nothing is discouraging them from using as much electricity as they please.

Similarly, New York City’s environment is also at risk. Water especially. The New York City Department of Environmental Protection has been providing water at a fixed-rate to the city’s agencies for years. Thus, these institutions have zero motivation to become more environmentally-efficient. With no financial incentive, and no governing authority telling them otherwise, they are free to use as much water as they wish without considering any environmental risk. Prospect Park Lake, located in Brooklyn, assumes 55 acres and runs 7 feet deep. Park officials have not installed a well, which would be the environmentally responsible thing to do. Instead, they have filled the lake with tap water. Hundreds of city buildings within all five boroughs of New York City could save a substantial amount of water by installing high efficiency toilets and checking regularly for leaks. However, there is nothing motivating anyone to take any action to conserve New York City’s water.

New York City officials should look at Puerto Rico’s crisis and recognize the danger they are in. New York has a larger environmental footprint than Puerto Rico and is at a much greater risk. If no action is taken soon, NYC will find itself in terrible downward-spiraling crisis.

 

 

 


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The Water Board Approves The FY 2016 Rate Schedule

De Blasio’s administration appears to be on course with its promise to be an administration for the average New Yorker.  This morning the New York City Water Board approved the proposed Rate Schedule for FY 2016.  After listening to public testimony in all 5 boroughs over the last few weeks the increase in the water/sewer rate is has been approved at 2.97%. This comes as a pleasant surprise since the Rate Schedule proposal earlier this Spring called for an increase of 3.24%. This years rate increase will be the smallest in nearly a decade and a half.

The new water and sewer rates, $3.81 and $6.06 respectively, comes amidst criticism from the Rent Stabilization Association and other city landlords who argue they are having a hard time keeping housing affordable as costs continue to skyrocket.  While the last minute decrease to the rate change may seem like a gesture of good will from the administration, landlords will likely remain unappeased until rate changes start headed in the negative direction.

In good news for single family home owners and other low water consumers, the minimum daily water/sewer charge of $1.27 per day remains frozen for the third consecutive year.

– Vadhil Amadiz

 


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How the Leak Forgiveness Program can be Improved to Encourage Conservation

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.


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Is Frontage Dead?

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.


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

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.


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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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Ten Ways to Save the DEP – #3: Stop Using the Water Board to Bypass Contract Bidding

Like every government agency, every so often the DEP needs to outsource some of its work. They need studies done to determine the efficiency of their procedures or they need construction done on new or existing facilities.

The fact that some of their work is outsourced actually should benefit the public. We don’t need the costs of training and maintaining additional DEP staff worked into our water/sewer rates. What we pay for water is already high enough. Let the DEP worry about being the best at distributing water to New York City and let them pay others to be the best at other things, like environmental impact studies and rate analysis studies.

Considering how often work is outsourced, it’s a good thing government agencies have a system in place to ensure that the outsourcing is executed fairly and efficiently. Whenever work needs to be outsourced the DEP puts out a Request for Proposals (RFP) and anyone interested responds in writing with what they can do to complete the work and how much they’ll charge to do it. The DEP now has to look at two things in each bid: 1) Can this company complete this job effectively? and 2) who will do it for the least amount of money?

After all, it is our money that these government agencies are throwing around. Following the rules above ensures that they’re not abusing that right.

If only this was how the DEP obtained their contracts. Steven Lawitts, Emily Lloyd and other past DEP commissioners found a way to bypass the contract bidding process and they milked it for all it was worth.

The purpose of the Water Board is to be a regulatory agency, constantly monitoring the DEP and keeping them in line. After all, the DEP’s capital budget is over $1 billion. Someone’s gotta make sure all that money is being used correctly. Ideally, as a regulatory agency, the Water Board should be watching everything the DEP does and telling them where they’ve overstepped their bounds. In actuality what the Water Board does is back up and support every action that the DEP takes.

Since the Water Board controls the DEP’s finances and blindly supports their every move, it stands to reason that all the DEP has to do is ask the Water Board for money for a specific project and the Water Board will hand it to them with a big smile on their faces. So instead of finding the company that will complete a job most effectively for the least amount of money, they just pick the company they want to work with and ask the Water Board to give them any amount of money they ask for without any regard for whether or not they’re the right people for the job.

This is how we got ourselves into the current Booz Allen Hamilton rate study mess. Years ago (under former DEP Commissioner Emily Lloyd), the DEP asked the Water Board to pay BAH to audit its customer service and collections procedures. BAH came back (after asking for more money and turning in their report after the deadline) and said that in order to maximize collections the DEP needed to perform a rate study. Then they got the DEP to hire them (without putting out an RFP) to perform that rate study. They released their results a couple of weeks ago and they are woefully lacking.

Let’s break down the string of failures here, shall we? Audit of customer service and collections procedures goes straight to BAH without an RFP – failure #1. BAH asks for more money (which they get) and turns in the report late – failure #2. BAH report’s only conclusion is that to increase collections BAH should be hired again for more money to perform a rate study – failure #3. Rate study goes straight to BAH without an RFP – failure #4. Rate study comes back with no analysis or conclusions – failure #5.

So where we started with a simple, minor problem–the DEP giving a small contract to BAH without letting others bid on it–now we have a major problem in that we’ve shelled out millions of dollars for a report with no conclusions or recommendations. The original contract may have been small but because of it we ended up with bad advice and a poorly run agency!

At a recent Water Board hearing, Chairman Alan Moss asked if one of these days newly appointed DEP Commissioner Caswell Holloway could be brought in on a hearing. Moss’s reasoning behind the request? He wanted to assure Holloway in person that the Water Board is behind the DEP 100%. Does that sound to you like the right attitude for a regulatory agency to have?

Maybe if the Water Board started actually auditing the DEP’s expenses and maybe if the DEP stopped using the Water Board to bypass contract bidding, there wouldn’t be so much wasteful spending with our money.

[CORRECTION – 3/3/10: The assertions above, that the Booz-Allen contracts were obtained without competition, are incorrect. The public records indicate that the Booz-Allen contracts were procured through a competitive Request for Proposal process. The Water Board’s website posts the official minutes from past Water Board meetings. The minutes from the June 2008 meeting summarizes the competitive process the Water Board used to award the Booz-Allen contract.

We apologize to the DEP, Water Board and the public for the error .]