Here's hoping new DEP Commissioner brings real change to water rates

Water rates are again coming back into the news in the annual reporting of outrageous increases set forth by DEP and rubber-stamped by the Water Board.

According to the Staten Island Advance, New Yorkers should expect another double-digit increase this year in the neighborhood of 14%. Going back over the last four years we have seen increases of 12.9%, 14.5%, 11.5% and 9.4%. The average single-family homeowner bill is expected to top $1,000 for the first time, and the impact on affordable housing will be significant to say the least.

As the article points out, we should continue to expect these large annual increases as the formula has not changed: increased capital costs at DEP and decreasing water usage across the City.

One can only hope that some changes are on the way with new Commissioner Cas Holloway. According to the Daily News, Holloway has instituted an across the board 8% spending cut in his first month on the job, while bringing the Bloomberg bullpen to his new agency.

Two water related blogs continue to put forth proposals for further changing the way water rates are structured. Waterblogged.org has a post about submissions for innovative design solutions that manage runoff from roadways that flood the sewer system and cause raw sewage to be dumped into our waterways.

Water Watch NYC has recently posted three ways to save DEP, including instituting storm water fees and revamping the Mayoral-appointed rubber-stamping Water Board to actually act as a regulatory agency over DEP. The way the agency handled the recently revealed rate study, for which DEP "shelled out millions of dollars for a report with no conclusions or recommendations" is a perfect example of why both DEP and the Water Board are dysfunctional partners in crime.

Water Board Approves 12.9% Increase

The Water Board voted this morning to approve a 12.9% increase, the third consecutive double-digit increase. While the increase is slightly lower than the proposed 14% hike announced earlier this year, there is no reason to celebrate. The skyrocketing cost of water will contribute to more foreclosures in the City, and will make it harder for affordable housing managers to run their buildings effectively.

Here is coverage from NY1, and here is the press release from Comptroller Thompson's office that sums up the situation:

“I am disappointed at the New York City Water Board’s decision to impose yet another excessive water and sewer rate hike. Although this is a very slight reduction from the increase they were originally seeking, a 12.9% hike is still outrageous. It is simply too little too late. These charges are gouging New York City families and small businesses precisely at a time when they can least afford it.

This increase will raise an average single family homeowner’s annual water bill from $571 to $903 in just four years – a whopping 58 percent increase, about five times the inflation rate. Water rate payers’ bank accounts are not an unlimited resource.

Furthermore, I am frustrated that the City continually ignores recommendations made by my office, other elected officials, advocates, and New Yorkers that would have helped to minimize water rate increases this year and in the future.

The Water Board’s plan to seek a 12% rate hike next year demonstrates that it does not intend to stop squeezing money out of the pockets of New Yorkers. It is imperative that the Department of Environmental Protection complete its promised study as soon as possible in order to inform next year’s water rate-setting process.”

Last year, the Water Board committed a million dollars of ratepayer money to review how other utilities across the country structure their rates and to examine ways to inject a greater degree of fairness into our system. Then-DEP Commissioner Lloyd promised that the Fiscal Year 2010 water and sewer rates would take into account the results of this study. However, the DEP has failed to complete the study as promised.

The Water Board leases the water and sewer infrastructure from the City. Rental payments are based on a formula that, until recently, reimbursed the City for water-related debt service on bonds issued before the Water Authority was created. Since 2005, however, the formula has led to rental payments in excess of the underlying City expense.

Thompson charged that this formula is forcing water ratepayers to subsidize the City’s General Fund, because “excess rent” flows into that fund and is used as general revenue. In Fiscal Year 2009, such “excess rent” will total $106 million, and this is predicted to swell to more than $200 million by Fiscal Year 2013.

Over the last two years, Thompson proposed rebating the “excess rent” back to the Water Board to offset the cost of running the water system. In Thompson’s plan, the “excess rent” would have been split equally for two purposes: ½ for pay-as-you-go capital spending, which reduces costs over the long term, and ½ for other water system expenses, which would lessen the need for rate increases.

Additionally, Thompson identified another source of revenue to prevent water rate increases: federal stimulus money. Under the terms of the stimulus bill, the New York State Revolving Fund will receive approximately $432 million for clean water projects and $82 million for drinking water projects. However, only half of that money currently is slated to be distributed in the form of direct grants or similar deep subsidies.

In a letter Thompson asked the Governor to support direct grant allocation of all of this money because of the overwhelming needs of the water systems operating throughout the State, and the New York City Municipal Water Finance Authority in particular.

Thompson has recommended that DEP reduce its operating budget by 5%. Most of DEP’s operations have been exempted from the same belt-tightening reductions required at other city agencies because they are funded by water and sewer rates instead of tax revenue. DEP representatives have previously acknowledged that the
agency’s Fiscal Year 2010 reductions amount to only 2% of its budget.

The Gotham Gazette also has some background coverage of the issue.

Bronxites make a stink about water rates but wonder if the Water Board is really listening

Reporting and Opinion by Gregory Lobo Jost

Two members of Mayor Bloomberg's Water Board sat mostly silent in the auditorium of the Bronx Library Center on Kingsbridge Road yesterday afternoon. Their executive director (and acting DEP Commissioner) had left before even the first testimony was heard to attend to something that must have been very important upstate. (One wonders if they planned the hearing in the Bronx for that time so Mr. Lawitts could be a bit closer to his meeting 100 miles north of the City). The impending 14% water rate increase kept those in attendance agitated and the two board members mostly silent, save the new board chair Alan Moss's (in photo at center) recollections of growing up on Pelham Parkway to open up the hearing. Most of the talking by anyone on stage was done by the hearing officer (in photo at left).

Meanwhile, the same two City Council members from the Bronx once again attended the hearing. Councilman Koppell focused his testimony on how DEP could shrink the size of the hike by assuming a better collection rate, given the powers bestowed upon the agency by the City Council to sell water liens on multifamily properties and turn off service for delinquent single family homeowners. Councilmembers, of course, feel duped into giving DEP such powers since it is hasn't resulted in lower rate hikes like they were told. And since we are in a deep recession with the City's jobless rate spiking and foreclosures continuing to stay at or near all-time highs, collections will likely not improve; with each new double-digit water rate hike and the worsening of the City's economy comes the realization that many are unable to pay any of their bills, or must at least make the difficult decision between paying the mortgage, property taxes, heating oil, Con Edison, or water bill -- which would you choose? (UNHP's analysis last year showed 15-20% of homeowners at least one year delinquent on their water bills were already in foreclosure.)

Councilman Vacca made his points about how ironically conservation of water leads to higher water rates, and how the rates are really a hidden regressive tax that subsidize the City coffers. He focused on how DEP's budget continues to grow, while every other City agency must make drastic cuts. He implied that the Mayor may even encourage DEP spending increases because the more the agency pays in debt service on capital projects, the more money goes into the City's budget in the form of a rental payment.

Testimony was also heard from environmental groups who (rightfully) continue to harp on the poor decision making regarding the filtration plant, and from a private affordable housing owner and manager who warned of the toll these repeated increases will have on low income renters in the form of reduced services.

Three members of University Neighborhood Housing Program (including myself) testified as well. Included in my testimony was the suggestion for the Water Board to get a proportional cut of alternate side parking ticket revenue since, according to the Independent Budget Office, water rates subsidized street cleaning to the tune of $30 million last year. While somewhat in jest, I used this point to illustrate how the Mayor avoids raising taxes by bilking water rate payers to pay for City services.

UNHP's outreach coordinator, Jumelia Abrahamson, pointed out to the two present members of the Water Board that "the only thing that has gone up faster than the water rate over the past few years is the foreclosure rate." When this rate increase goes into effect, water rates will have gone up 60% in just four years, and will have more than doubled since 2001. To make matters worse, Councilmember Vacca pointed out that DEP is projecting double digit rate hikes for the next few years as well.

While legitimate suggestions were made on how to shrink the size of this year's increase, it is unlikely the Water Board will take any immediate action. Members who took the Mayor to task on the increase last year are no longer on the board.

Meanwhile, the results of the rate study commissioned last year are yet to arrive, meaning the Water Board does not have any recommendations about improving the structuring of the rate system that it will likely take seriously. If that's really the case, then the most useful suggestion of the afternoon may have come from Community Board 7 District Manager Fernando Tirado, who in the last testimony of the afternoon urged those in the audience to remember this rate increase when it comes time to vote in the fall.

The Daily News also covered the hearing.

Bronx Water Rate Hearing Today

The Water Board will hear testimony regarding the proposed 14% rate increase today at 2pm at the Bronx Library Center, 310 East Kingsbridge Road.

Contrary to what I posted last week the new Fiscal Year 2010 Blue Book wasn't posted until either last night or this morning. (The Blue Book is basically DEP's written justification to the Water Board for why they need to increase rates.)

If you can't make it to the hearing but would still like to complain about increasing water rates, call 311 and ask to register your complaint with the Mayor's office -- he loves to check those 311 statistics!

Also, check out NY1's coverage of the Queens hearing yesterday and read Comptroller Thompson's full testimony at the Staten Island hearing.

Ho-hum, Another Huge Water Rate Hike

It comes as no surprise to any of us following water rates that the Water Board announced a planned 14% rate hike for this July 1st. This hike will add to the 14.5% increase last year, 11.5% in 2007 and 9.4% in 2006, a cumulative increase of 59% in just four years.

The Daily News provides coverage of this morning's meeting and announcement, including an appearance by Comptroller Thompson. In addition to DEP's monster budget, both conservation and delinquencies are up, contributing to the need for the rate increase.

And don't forget to pay your water bill, especially if you live in a single family home.

We will have more coverage of this topic in the coming weeks.

Read more about the need for water rate reform here.

Our Water Comes From "Somewhere" Upstate – But how do we pay for it?

The Women's City Club of New Y0rk is sponsoring an upcoming forum on NYC's water system and how it's paid for. Here are the details:

Why do Harlem and the South Bronx pay more for water and sewer usage than the Upper East Side of Manhattan or Northeast Queens? Why does a building in which the median household income is $25,000 pay a higher water and sewer tax than a building in which the median income is $55,000? Why do residential buildings pay more in water and sewer costs than commercial, industrial or government buildings? Why is the water rate being increased 14% this year and every subsequent year? Why do water rates include lease payments to the City that are hundreds of millions of dollars more than the cost of the water system’s infrastructure provided by the City?

If your head is spinning right now, so was ours - until we started learning more about the way the NYC water and sewer system is run and how rates are set. The more we heard, the more we realized that this complicated and discriminatory system needs to be better understood and reformed. Of primary concern is how this system negatively impacts the City's stock of affordable housing, and why incentives are needed to encourage conservation.

To broaden the public's understanding of these matters, we have gathered a group of experts who have examined the issues, will outline the problems in easy to understand terms, and recommend reforms.

OUR WATER COMES FROM "SOMEWHERE" UPSTATE –
BUT HOW DO WE PAY FOR IT?

Date: THURSDAY, JANUARY 29th, 2009
Time: 12:30 pm - Program; Noon - Registration
Venue: League of American Orchestras, 5th floor conference room, 33 West 60th Street (between Broadway & Columbus Avenue)
Registration: No charge members of WCC and Housing First! No charge students; $15.00 non-members.
Advance registration requested: contact Raolat Abiola, WCC 212.353.8070 x. 204.

Panelists:

• Jim Buckley, Executive Director, University Neighborhood Housing Program
• Lisa Deller, NY Regional Director of the National Equity Fund, an affiliate of the Local Initiatives Support Corporation
• John McCarthy, Exec. VP, Chief Operating Officer, Community Preservation Corporation
  Harold Shultz, Senior Fellow, Citizens Housing and Planning Council
• Representative from the NYC Water Board (invited)
• Moderator: Ann R. Loeb, Co-Chair, WCC Housing & Planning Committee

Co-Sponsor: HOUSING FIRST!

The Women’s City Club of New York (WCCNY) is a nonpartisan, nonprofit civic organization that shapes public policy through education, advocacy and citizen participation.

For more background on the issue, check out UNHP's website or read more on the West Bronx Blog.

Dinowitz Unhappy with Ward Nomination to Port Authority

In an op-ed in yesterday's Daily News Bronx section, Assemblyman Jeffrey Dinowitz explains his displeasure with Gov. Paterson's nomination of former DEP commissioner Christopher Ward to head the Port Authority. Especially noted are Ward's notorious cost-overruns at DEP with the filtration plant and with the projects like the JFK Air Train when he was previously at the Port Authority.

Speaking of the outdated technology and gushing groundwater leakage at the filtration plant, Dinowitz writes:

Either Ward's DEP committed the unforgivable sin of not knowing this environmental disaster was going to happen, or he kept the information off the list of project negatives to keep the approval process moving forward. Is this someone we want in charge of the Port Authority's ecological restoration?

He then cites Ward's pandering to special interests and his move from DEP to the General Contractors Association of New York as reasons to think his running the Port Authority would not be in our best interests.

Bloomberg Out of Touch on Water Rates

Opinion by Gregory Lobo Jost
Our billionaire mayor once again shows how out of touch he is with reality by crassly dismissing calls to provide immediate relief to water rate payers. When asked about the calls by City Council Members Gennaro and Weprin for the City to return a portion of the rental payment to rate payers, Mayor Mike brushed off the entire issue. So reports the Daily News,

"They spend the money on real projects which we need," Bloomberg said of the city's water system Monday. "From what I can tell, they do it reasonably efficiently, and this [rental relief] seems to me to be a brouhaha about nothing from a couple of people who want to run for higher office."

While some of the elected officials making this point are running for higher office, that doesn't make their point invalid. In fact, those who will be sticking around in public office during the coming years realize that the problem of incresing water rates will only get worse. The easiest route for Bloomberg is to ignore the problem and let the next Administration deal with it -- so much for our visionary Mayor planning ahead to 2030! What about 2010?!?

Significant side point: The Mayor probably wasn't thinking about the filtration plant where costs have skyrocketed when he made his "reasonably efficiently" comment. (By the way, the parks improvements that were part of the deal Bronx politicians made to allow the construction in Van Cortlandt Park aren't being paid for out of the Parks Department budget -- they are coming from rising water rates!)

While the Water Board is also holding hearings this week (last night in the Bronx and tomorrow at 5:30 in Manhattan), they will argue that all that they actually have little control and our points should be made directly to the Mayor's office. Since the Mayor's office isn't holding public hearings on the topic, though, advocates will continue to press major points of reform with the Mayorally-appointed Water Board. Hopefully they will have the wherewithal to take our case to the Mayor, or resign in protest of what's going on -- but I wouldn't hold my breath on either count.

Meanwhile, the Independent Budget Office released a report on the water rate increases this week, although they focus entirely on short-term relief. A better comprehensive look at the system can be found in the Urban Prospect (entitled Liquid Assets), released today by the Citizens Housing and Planning Council.

No Surprise Here: Bronx Picks Up Most Manhattanites Since 2001

Opinion from Guest-Blogger Gregory Lobo Jost

The IRS has recently released data on net-migration between Manhattan and the outer boroughs, confirming demographic trends we're familiar with: the Bronx is the largest recipient of folks moving out of Manhattan (a net gain of almost 24,000 between 2001 and 2006). Of course, the press (the original article on the Observer and a follow-up blog post on Gothamist) has mostly missed the point, thinking of the trend in relation to the record sale price averages being recorded in Manhattan.

Sure, there are a number of wealthy families moving to Riverdale, but that number would never compete with the number of well-off moving to Brooklyn.

As most West Bronx Blog readers know, the largest influx of Manhattanites into the Bronx are lower income, working class families (often Domincan) from Washington Heights, Inwood, Harlem and East Harlem. 2005 Census data showed the Bronx was the only borough that incoming households from other NY counties made less than those already living here.

Of course, as some of those who've posted on Gothamist have mentioned, the Bronx is barely affordable to these new-comers, as well. It's all part of a larger affordability crisis New York City is experiencing.

Finally, on an unrelated note, the Riverdale Press has a great editorial on water rates.

A Few Quick Links on Water Rates

Just a few quick updates on the water front:

The Water Board is proposing a 14.5% rate hike for this July 1. The best news summary of the situation is by Jarrett Murphy on City Limits. A longer report on water rate reform can be found on UNHP's website.

Also, here is an op-ed in the Post from Friday by Comptroller Thompson regarding the controversial rental payment.

Heading Off the Next Round of Double-Digit Water Rate Increases

Summit in the Bronx brings together nonprofit, public and private sectors to discuss overhauling the way the City pays for water

In anticipation of the next double-digit water rate hike expected to be announced Friday morning, advocates, researches and City watchdog agencies will come together this Thursday to discuss ways to overhaul the way we pay for water in New York City. Currently, water rates cover much more than the cost of water in and sewage out of their homes—they also cover all of the ballooning capital costs at the filtration plant being built in the Bronx and the UV treatment facility upstate, not to mention a hefty rental payment that will subsidize City coffers by more than $8 billion between now and 2036, according to an estimate by the NYC Comptroller’s Office last fall.

Despite improved collections and enforcement practices taken on by DEP in the past year, including lien sales and shut-offs, double-digit rate increases are expected each year for the foreseeable future. The problem is much bigger than the so-called deadbeats who aren’t paying their bills. DEP’s capital construction plan is the second largest in the City after the Department of Education. But unlike DOE, there is no outside funding to subsidize the cost of the water projects – most federal support has dried up, even as mandates have increased.

These huge increases in the cost of water disproportionately affect lower-income neighborhoods, and our City’s affordable housing stock, much of which was renovated with City funds starting during the Koch administration. Ironically, Mayor Koch’s enormous (and successful) 10 year housing plan announced in 1986 was in large part possible because it coincided with shifting the capital costs of the water system onto rate payers, freeing up money to rebuild the City’s devastated neighborhoods. Nearly 25 years later, rising water and sewer costs threaten the same housing preserved by Koch’s plan.

On hand to discuss the impacts of the water system on affordable housing and conservation efforts at the Water Rate Reform Summit at Fordham University on April 10 will be Marcia Van Wagner, Deputy Comptroller for the NYC Comptroller’s Office, Preston Niblack, Deputy Director of the City’s Independent Budget Office, Harold Schulz, Senior Fellow at the Citizens Housing and Planning Council, Dart Westphal, Executive Director of the Mosholu Preservation Corporation, and John McCarthy, Executive V.P. and Chief Operating Officer of the Community Preservation Corporation. Bronx nonprofit University Neighborhood Housing Program will convene the summit as part of their work on the impact of water rates on affordable housing over the past twenty years.

The report, entitled "Water and Sewer Rate Reform Summit: Can NYC achieve affordable water rates, promote conservation, and control capital costs?" is posted on UNHP's website.

Contact Information: Jim Buckley jim@unhp.org or Gregory Lobo Jost gjost@unhp.org, 718-933-3101

Fixing NYC's Water Problems Goes Way Beyond "Deadbeats"

Guest Opinion by Gregory Lobo Jost
A few good things came out of the New York City Water Board meeting this past Friday morning. At the most basic level, we learned that the entity that sets water rates for the City has finally developed a website, so now you can now figure out who actually is on the Board, read their mission statement, look at past meeting minutes and resolutions, and (most fun of all) find out just how much water rates have gone up since 1980.

(To spare you the time and fun, the cost has gone up 209% -- after adjusting for inflation and corresponding sewer costs -- meaning you’re paying more than triple for the same amount of water than you did 28 years ago. Good thing we’ve all got low-flow toilets now, right? Just by way of comparison, a gallon of gasoline costs about the same as it did back in 1980, also after adjusting for inflation – maybe that’s why we’ve become much more efficient with water than we have at the pump.)

More importantly, the Water Board announced that they are extending the deadline for delinquent single family homeowners to sign up for the Payment Incentive Program until April 21. (Councilman Rivera is hosting a PIP event today from 3-8pm at his office on Southern Blvd. and Fairmount Pl.) While this is welcome news for the thousands of families that missed the original deadline (February 21), it still is not going to stop the shutoffs from taking place. In fact, even though the deadline has been extended, shutoffs will likely begin before the PIP deadline rolls around. (Owners of multiple unit dwelling won’t be facing shutoffs but will be subject to lien sales, and their deadline is also April 21.)

The press has been quick to jump on these homeowners, labeling them as “deadbeats” without ever interviewing anyone who is delinquent on their water bill. The public has a right to be angry at someone after the recent huge rate increases -- and since DEP and the Water Board continue to blame everything on uncollected bills, homeowners are an easy target.

But looking at this issue through the larger lens of affordability in New York City reveals a mixed landscape. Sure, there are a bunch of folks out there trying to get away with not paying the one bill that, until recently, had no enforcement mechanism. But consider that in many parts of the City, homeowners typically pay more than 50 or 60% of their incomes on their housing costs. Factor in the recent spike in subprime lending and ARM resets and it’s no wonder certain bills are going unpaid.

Our own analysis of the shutoff list from DEP showed that more than 15% of the 600 Bronx homeowners who remained in danger of shutoff 3 weeks ago were actually already in foreclosure. Obviously, they are not going to pay their water bill! The numbers are even more striking for the 2,200 2-4 family homeowners in the Bronx who were on the 90-day lien sale list solely for water bills – nearly 20% of them are in foreclosure!

With foreclosure rates still going up, these numbers may likely rise; in fact, the threat of shutoff may force some homeowners to choose to pay their water bill over their mortgage. While that’s good news for DEP, higher foreclosure rates aren’t helping the City out overall. The Water Board is claiming that families in foreclosure won’t have their water shut-off or their liens sold. Let’s hope they make many fewer mistakes on their enforcement policies than they do on their billing.

Meanwhile, it’s time to stop solely blaming so-called deadbeats for excessive water rate increases and really analyze DEP’s spending, the rental payment they make to the City coffers, and how we can really reform the way we pay for water in New York City. University Neighborhood Housing Program plans to do just that at our upcoming 25th anniversary forum on Water & Sewer Reform on April 10.

No Real Victory on Water Yet

Opinion from Guest Blogger Gregory Lobo Jost:
While some think the deal struck between the City Council and DEP to hold off on the 18% mid-year increase on water rates is something of a victory, the situation is far from resolved. In exchange for taking the unprecedented mid-year increase off the table, the legislation introduced in the City Council yesterday would give DEP the authority to sell stand alone water liens. In the past, water liens could only be sold in a lien sale if there was also an outstanding tax lien. The council had been reluctant to authorize stand alone water liens in the past due to the many billing errors plaguing the water system. For now, the only victory than can be claimed is by DEP and the Water Board over the City Council.

Recent press on the issue continues to focus on the "deadbeats", especially Frank Lombardi of the Daily News who uses the term 9 times in his most recent article. To categorize every customer delinquent on their water bills with such language ignores the continued billing errors perpetuated by DEP, and the growing subprime foreclosure debacle where homeowners were not offered the best mortgage product they actually qualified for and were often the victims of fraud.

A decent victory on water rates will come when the focus of the debate moves from collections to DEP's ballooning expenditures. At a time when other City agencies are cutting their budgets by 2.5% across the board, DEP's capital costs continue to escalate without check, and the burden will continue to fall on rate payers.

The real victory will come when the entire way water rates are structured is changed. The current regressive-taxation system has rate payers footing the bill for capital costs and a rental payment to the City. While paying for the actual delivery of water as a utility makes sense, these other costs have nothing to do with the amount of water used in the City; in fact, DEP admits that as water use has dropped in the past 20 years due to conservation efforts, rates have had to increase to cover the gap.

Even more bizarre is that when water rates go up, DEP's collection rate goes down -- most likely since rates have gone up so dramatically (22%) in the past 18 months. DEP factors this into their equation for rate increases, meaning that when they need a 12% increase, they move to impose an 18% increase to cover the gap left by rate payers who will fall behind when their water bills go up so much.

For now, the next large increase will likely be postponed until July 2008. If the pressure doesn't change from focusing on collections to DEP's enormous expenditures, the effectiveness of the lien sales and shut-offs on collections will determine what the actual increase will be. With the mounting foreclosure crisis, this strategy will not prevent another large hike this coming year, and is no cause for victory.

In the midst of growing foreclosure crisis, water shut-offs are ill-timed

The New York City Water Board will meet Friday morning to discuss a proposal to shut-off water service to over 8,000 single family homeowners behind on their water bills. There are also reports that the Water Board is considering a mid-year rate increase of up to 18%.

As foreclosures continue to climb, a coalition of nonprofit organizations that works with homeowners throughout the City plans to attend the little-publicized Water Board meeting Friday morning to demand a two-year moratorium on shut-offs for homeowners and to call upon Department of Environmental Protection (DEP) to improve communication and collaboration with the homeowner counseling groups in resolving unpaid bills. The groups also oppose any additional rate increase that may be on the table.

The proposal to shut-off water service to single family homeowners who owe at least $1,000 and are at least one year delinquent comes at the same time as foreclosure rates in the City are skyrocketing. Many of the homes targeted for shut-off are in the same neighborhoods victimized by high rates of subprime lending and foreclosures.

Water rates have already risen 22% in the past 18 months, and are projected to rise another 11.4% this coming July, as the DEP’s capital costs continue to escalate on major projects like the Croton Filtration Plant being built in Van Cortlandt Park in the Bronx.

The coalition of organizations attending the hearing include the New York Mortgage Coalition, the Association for Neighborhood Housing Development, Neighborhood Housing Services of Jamaica, CHANGER, Pratt Area Community Council, Community Assisted Tenant Controlled Housing, Neighborhood Housing Services of Staten Island, Neighbors Helping Neighbors, Harlem Congregations for Community Improvement, and University Neighborhood Housing Program.

The NYC Water Board meeting and hearing will take place Friday, November 9, 2007 at 8:30 AM in Room 123 of St. John's University Manhattan Campus (101 Murray Street).

Local news from UNHP's Notes

Local nonprofit housing group University Neighborhood Housing Program's newsletter is out. Here's what you'll find in this edition of NOTES:

Water and Sewer: The News Just Gets Worse
An unprecedented 18% mid year water and sewer increase is proposed by DEP and could also lead to the establishment of stand-alone water lien sales.

Loan Fund Updates
To date, UNHP has made more than 100 loans with a value of over $4.5 million, and has recently updated its loan software.

New Resources Added to Community Resource Guide
Seven years after its creation, UNHP has developed a new section for CRG on Community Resources to help New Yorkers learn about the resources and benefits available to them.

A Remedy for Rising Foreclosures
The Northwest Bronx continues to display an alarming number of foreclosures, and it is against this backdrop that UNHP continues its outreach efforts to distressed homeowners.

BIP-ing the City
UNHP's Building Indicator Project Database will be automated this fall and will help identify distressed multifamily rental properties throughout New York City.

The West Bronx Online
There have been some exciting developments in the world of news about the West Bronx in the past year, including the West Bronx News Network and the West Bronx Blog.

UNHP Responds to DEP’s 18% mid-Year Water Rate Proposal

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

Water Shut-Offs Coming to NYC Homeowners

The New York Times is reporting that DEP has issued shut-off notices to 11 NYC single-family homeowners. DEP hasn't threatened shut-offs to non-commercial customers in the past, and some feel this is partly why the agency has been unable to collect about $600 million in unpaid bills. Unfortunately, many water bills are questionable and DEP acknowledges this by not sending the shut-off notices to homeowners who are more than 18 months in arrears.

Instead, the 11 homeowners, scattered throughout the City, owe a combined $53,000 -- small change compared to others who haven't paid bills in decades.

DEP is also targeting single family homeowners so that renters, who don't pay for water, won't be the victims of their landlord's nonpayment.

These shut-off notices come on the heels of the recent 11.5% water rate hike this summer. DEP projects similarly high rate hikes for the coming years.

Con Ed teams up with DEP in rate hikes

So, Con Ed is following DEP's lead and also requesting a steep rate hike that would also cause total bills to increase about eleven and a half percent. The electricity increase, at 17% for residential customers and 10.7% for businesses, would go into effect next April. Here's the Times article on it.

And don't forget about who has the worst electricity network in the city (see right)...

The Times article also references Bloomberg's response to the water rate hikes:

Mayor Bloomberg, in his weekly radio call-in appearance on WABC-AM, defended the water rate increase yesterday.

“The Department of Environmental Protection is a pretty good agency, efficient, needs to keep making investments, and fixing and building,” Mr. Bloomberg said, “and we need those things, and somebody’s got to pay.”

Let's discuss this a little more in-depth, Mayor. DEP may be a pretty good agency overall, but they are certainly not efficient when it comes to billing issues, and hence collections. And why should rate payers be the only ones paying for capital improvements to the water that everyone uses (including commuters who use the city's water all day long)? And why does the city need the rental payment from DEP for use of the tunnels/infrastructure?

Noteworthy Bronx Beat articles

The Bronx Beat's most recent edition has a few noteworthy articles in it:

Water rate hike will drip residents dry has a great graphic showing water rates as a percentage of household income in various cities across the country, as well as the Bronx.

Money dwindles for green roofs highlights some of the work of Fordham Bedford Housing Corporation.

NYC's Water Woes

Also published on the Drum Major Institute Blog

11.5% in July; 11.5% next year; 11.4% the year after that; and 11.3% in 2010. Compounded annually, the 54% increase in water and sewer rates in New York City that the Water Board is projecting over the next four years will mean more maxed-out homeowners going into foreclosure, more affordable housing managers struggling to keep their buildings afloat, and (since all costs trickle down) higher rents for the millions of rent stabilized tenants, many who already pay half of their income on rent.

Why the large increases? According to the Water Board (appointed by Mayor Bloomberg) there are three main reasons: $23 billion in capital costs (about half of which are state or federally mandated) that are paid out of rates; the plethora of billing errors that prevent the Department of Environmental Protection (DEP) from enforcing collections resulting in more than $600 million in unpaid water bills; and the simple fact that water usage is down (they still need to collect a certain amount, so the more water we conserve, the more they’ll charge us for it!).

Add to this the fact that DEP will pay the City $135.9 million this year (and $154.8 million next year) in rent for use of land and infrastructure to deliver the water to City residents. So rate payers (and eventually tenants) pay more and more to DEP to pay the City rent to make sure we have a good chunk of that $4.4 billion dollar surplus the Mayor announced the other day. Does this make sense?

And don’t forget about the cost overruns at the water filtration plant being built on Bronx parkland, where the low-bid contractor has backed out because they know they can’t build it for what they had estimated. Rate payers (and eventually renters) will pay for the heavy federal fines being laid on the City each day a contractor is not in place – the amount is already over a million dollars. For the low-income neighborhood residents who already have to deal with the blasting, loss of parkland, and massive construction in their backyard, this is just another slap in the face.

So, enough about the reasons behind the rate increases; what is this really going to mean for low income households throughout the City? Most residents don’t think twice about water rates since owners pay them. But when the Rent Guidelines Board decides how much to raise rents each year for rent stabilized tenants, one of the main factors they look at is the rise in operating costs for owners. There’s no doubt that this four-year 54% increase in water (69% if you include last years 9.4% hike) will eventually get paid by renters in the coming years in a City where affordable rents are harder and harder to come by.

For owners and managers of affordable housing, the rate hikes mean an even more desperate struggle to reduce other operating costs to keep rents low while staying out of the red. As for new affordable housing projects, increased amounts of City subsidy will be necessary to defray these rising operating costs. Again, does this make sense?

And those who may be affected the most are the low, moderate and even middle income homeowners who are already dealing with volatile fuel costs, high insurance rates, and resetting interest rates on their ARMs (not to mention the victims of predatory lending). The percent of conventional homeowners (those living in a house) in New York City who pay more than 60% of their income on housing costs has jumped from 15.9% in 2002 to a staggering 19.2% in 2005. For these nearly one-fifth of all New York conventional homeowners, the projected water rate hikes could mean the difference between making their mortgage payments and going into foreclosure. How does this fit in with the City's foreclosure prevention work?

The hearings the Water Board has been holding in the five boroughs will not change any of the rate increases, and the press coverage on the overall situation and projected increases has been nonexistent. A real plan of action is to call on the City to convene a Water Summit with appropriate City leadership (including Bloomberg and/or Doctoroff) and nonprofit, real estate and lending community representatives to examine alternatives to this series of excessive rate hikes. The summit should tie into the Mayor’s 2030 planning and focus on environmentally friendly ways to reduce costs for rate payers. These should include looking to reduce capital costs or shifting them away from rate payers, and re-examining DEP’s rental payment to the City. Financial incentives for building owners who install gray water systems and green roofs should also be instituted, along with less costly incentives that can be utilized by homeowners, such as installing street trees, storm water tanks, porous pavement, and rain water harvesting systems.

If the City is really serious about preserving affordability, it needs to take water into account.