DEP’s threat to go to the Water Board for an 18% mid-year rate increase has placed the cost of water in New York City back in the spotlight. City Hall and DEP are apparently hoping to get the City Council to enact legislation to allow the sale of stand alone water liens to bolster revenues from water bills. (Currently, water liens can only be sold if there is an accompanying tax lien.)
Everyone interested in maintaining a safe water supply that is affordable to all New Yorkers should take advantage of the opportunity offered by this political gamesmanship to publicly raise the real issue: the cost of water is out of control and threatens the economic futures of many New Yorkers.
Water bills currently pay for (1) the operation of the system, (2) the debt service on bonds for capital projects related to water and (3) a rental payment to the City of New York. Better collections will help DEP’s financial picture, but other steps must be taken. For instance, the Water Board’s rental agreement with City could be re-negotiated. Few people know that the Water Board’s rental payment this year is $154 million; reducing or eliminating that payment would be a big help this year for the Water Board budget.
Additionally, DEP’s capital budget needs to be examined to determine the necessity of certain projects, the timing of projects and the real costs of projects in construction. For example, the filtration plant in Van Cortlandt Park started out as a $1.2 billion job and now the costs are estimated to be $2.8 billion.
The importance of preserving the infrastructure to maintain an ample source of clean water is obvious. But the existing housing stock is an equally important part of the city’s economic infrastructure. Neither can be replaced and both require long-term capital investment. The housing infrastructure’s capital needs will be starved by the cumulative effect of water rate increases that are now being forecast.
We urge the Mayor and City Council to work with the community to develop a comprehensive answer to the water issue.
Jim Buckley, Executive Direcor
Gregory Lobo Jost, Deputy Director
Thursday, October 4, 2007
UNHP Responds to DEP’s 18% mid-Year Water Rate Proposal
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