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University Neighborhood Housing Program’s
25th Anniversary Affordable Housing Forum

Water and Sewer Rate Reform Summit
Can NYC achieve affordable water rates, promote
conservation, and control capital costs?

Click Here to Download the Report (PDF)

Thursday, April 10, 2008
at Fordham University’s Rose Hill Campus in the Bronx
Faculty Lounge, McGinley Center

Escalating and unchecked water and sewer operating costs negatively affect low income homeowners and affordable housing preservation.  UNHP has been a leader on this issue since our founding 25 years ago, working with DEP to resolve billing issues for building owners and residents, as a persistent voice and hearing testifier to control the recent double digit rate increases and as an advocate for water and sewer rate reform that promotes conservation, preserves affordability and is responsive to the public. 

University Neighborhood Housing Program presented our research report covering the history and method of rate setting in NYC, a discernment of DEP capital costs, an analysis of DEP governance and information about the impact of water and sewer rate increases on low income homeowners and affordable multifamily rental housing.  An exceptional panel followed this up with presentations of their own and discussion of the complex and often counter-intuitive world of water in New York City.

Panelists:

• John McCarthy, Executive V.P. and Chief Operating Officer, Community Preservation Corporation (Moderator)
• Preston Niblack, Deputy Director, New York City Independent Budget Office
• Harold Shultz, Senior Fellow, Citizen's Housing and Planning Council
• Marcia Van Wagner, Deputy Comptroller, New York City Comptroller's Office
• Dart Westphal, Executive Director, Mosholu Preservation Corporation

Follow-up:
Water Board approves 14.5% increase in water and Announces a Commitment from City Hall to examine alternative rate structures and the rental payment in time for next year’s rate hearings:

The New York City Water Board approved a 14.5% rate increase effective July 1, 2008.  Comptroller William Thompson and Council Finance Chair Weprin and Council Environmental Chair Gennaro spoke against the increase.  In an unusual move, the individual board members spoke individually about the thought process behind their decision to proceed with the increase.

Chairman Jim Tripp indicated that he had contemplated resignation and ultimately decided to stay on the board and vote for the increase after entering into a “joint commitment with the Mayor and DEP to examine alternative rate structures and a full and deep exploration of the board’s rental payment to the City.”  He indicated that for the first time in the years he has discussed these issues with City Hall that there is an understanding of the issue around the rental payment and he credited the many individuals and groups that have spoken out on the issue with getting the attention of City Hall on the issue. 

Tripp envisions a real discussion with City Hall that will result in looking at the allocation of costs of the water system, discussion with state regulators on the value and scheduling of certain mandated work items like the covering of the Hillview Reservoir which may add $1 billion to the capital cost of the system.  Tripp said that nobody should be looking at DEP as a cash cow.  He feels that he has a commitment from City Hall that will result in some kind of action in the next 6 months, re-directing money for next year, including the rental payment in excess of the debt service on old municipal debt. 

Did we lose? Yes for now, but maybe not with a longer term view. The rate increase is approved and it’s the largest increase in 15 years.  However,  the Water Board has taken on a more active role with City Hall on the need for rate restructuring.  They have sped up a process that as recently as a month ago was being talked about in terms of years and is now being talked about in terms of months.  As always, the follow up is going to be the key.

We will convene a meeting (perhaps by conference call) to update everybody on next steps in a couple of weeks.  We are continuing our research on other cities and monitoring of city plans on the Multifamily Conservation Plan and the toilet rebate program. 

Traditionally, the work on water rates ended now and started up again in the new year.  This year, the work will continue straight through the summer.

Thanks for your attention.

Related Links:

• UNHP's Water Rate Reform Report
• Presentation by Harold Shultz of CHPC
• Presentation by Marcia Van Wagner of the NYC Comptroller's Office
• City Limits Article, WATER FEES SOAK THE POOR TO GENERATE CITY REVENUE, April 14
• Riverdale Press, Editorial comment: Affordable housing's watery grave, April 17
• Norwood News Op-Ed, A Spending Tsunami for One City Agency, May 1

 

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