New York City Comptroller William C. Thompson, Jr. raises concerns about the new water rate hike at the New York City Water Board on Friday, May 16, 2008. “It’s an issue of fairness and equity,” said Thompson, who has spoken out about the last three water rate increases and offered solutions to the Water Board and the City.             Photo Credit: Marla S. Maritzer

New York City Comptroller William C. Thompson, Jr. today addressed members of the New York City Water Board shortly before members voted to increase water rates by 14.5%, issuing the following statement:.

“At a time when all New Yorkers are feeling the pinch of rising food, energy and shelter costs, we are being asked to dig deeper into our pockets to pay for yet another essential need: water. The proposed 14.5% rate increase, on the back of an 11.5% increase last year, will have a very real deleterious effect on those that can least afford it.

The City has elected to hold to its 14.5% rate increase request – the largest since fiscal year 1992 – even as the Water Board has demonstrated a strong interest in bringing more fairness to the rate structure, for which I commend them.  I am deeply disappointed by the refusal of the Bloomberg Administration to seriously consider with the Water Board the various proposals that would have provided some rate relief to the consumer.

It is unfortunate that this Administration chooses to ignore the intent of the rental payment to the City, which should be to cover general obligation debt service incurred for water purposes only.  Instead, the City shifts money that rightfully belongs in the water system to the General Fund coffers -- in effect, imposing a backdoor tax on water rate payers.”

At the meeting, Department of Environmental Protection Commissioner Emily Lloyd made an announcement – reflecting a key proposal offered by Comptroller Thompson over the last year –  that the City will hire consultants to independently examine the water system’s current water revenue, expense and capital structure and the long term effect on water and sewer rates.

“I am pleased that City Hall is listening not just to my office, but to the many voices across this City who believe that something must change so that customers do not continue to get slapped with larger bills at a seemingly increased pace,” Thompson said afterwards. “I hope this analysis will consider the City rebating excess rental payments to benefit ratepayers in the future, as well as review what can be done to bring down the system’s capital costs and allocate expenses fairly to water ratepayers.”

"The goal of the review should be achieving an equitable, transparent rate structure that allows for the maintenance and growth of the water system, protection of Water Authority credit ratings, and affordability for ratepayers,” he added.

Thompson has weighed in on the water rate increases for some time. Last year, he formally recommended that excess rent collected by the Water Board should be rebated to the water system for the benefit of ratepayers. He offered the Water Board a long-range proposal that would effectively lower charges to ratepayers while at the same time reducing future debt through the use of “pay as you go” capital financing.

The proposal was well-received by the Water Board but was rebuffed by the City.

On April 11th, Comptroller Thompson again wrote to the Water Board to commend members for their advocacy and suggested other ways to create a fairer structure for New Yorkers to pay water bills.

In his letter – available at www.comptroller.nyc.gov  – Thompson recommended that the Board consider:

• Requiring that the Authority’s rate increase request for the coming fiscal year 2009 delineate the amount of excess rent and identify the savings to ratepayers if this rent were to be rebated and applied to reduce capital borrowing and/or subsequent years’ costs.
  
• Independently examining the long-term financial viability of the system’s current funding structure given the system’s growing capital obligations. This should include a review of which items of infrastructure are being funded by water ratepayers and what can be done to reduce the system’s capital costs.
  
• Engaging its own attorney to explore legal options (as provided for in the lease agreement), if the City continues to be unwilling to negotiate a more equitable treatment of ratepayers.

 

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