Water & Sewer Rates

New York City’s residential building owners pay a disproportionate share of the City’s water and sewer infrastructure.

Although most believe that their water and sewer costs are based on water consumption, by 2009 only 46% of the average water and sewer bill will reflect actual usage, while 45% will go towards the cost of infrastructure maintenance and construction. In 2 years, infrastructure costs will exceed the operating costs of the system itself and will continue to grow through 2020. As a result, if water usage declines, the cost to the users (or rate payers) actually will rise to keep pace with the capital infrastructure costs.

Even worse, building owners in some neighborhoods pay far more for water and sewer. While the average apartment in Southern Manhattan (below E.96th St. and below W.110th St.) pays 8 percent less per housing unit than the Citywide average for similar buildings, Northern Manhattan buildings pay 11 percent more than the Citywide average per unit. Bronx buildings, with median household incomes of $25,000, pay 8 percent more than the Citywide average.

Since 2007, we have been writing clear, straightforward briefings on the issue and keeping track of the latest developments…you can read them below.

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DEP Proposes 7.5% Increase for 2012

New York City’s Department of Environmental Protection today proposed an increase of 7.5% for water and sewer rates for Fiscal Year 2012. If adopted by the New York City Water Board, it would represent the smallest increase since 2006 and at least a temporary respite from the double digit increases of the last four years. Increased water consumption, reduced operating expenses and refinancing outstanding debt have all helped to reduce this year’s proposed increase. A copy of DEP’s presentation can be found here.

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DEP Reports on Water Finances

At its last Water Board meeting, DEP released a report on water and sewer tax collections for this fiscal year to date. Predictably revenue continues to decline as usage declines. For the year to date water/sewer revenues are about 6% below target. This insures bigger increases for next year.

The Report is available here.

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DEP and Water Board Issue New Rate Study

In expectation of introducing a new rate structure to charge for water and sewer services, DEP and the New York City Water Board have released a study that they commissioned from Booz Allen Hamilton. The study reviews rate structures in other cities and proposes possible alternatives for New York City. While the proposed target for adopting a new rate structure was May of 2010, DEP has yet to move this project to implementation. The study can be accessed here. 

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Urban Prospect: Liquid Assets

In 1988 the City changed the method for collecting water and sewer charges from a system based on the amount of building frontage, to a system based on metered charges determined by actual water usage. It would have been fair to presume that this change would distribute the cost of using water equitably and encourage conservation of a scarce natural resource. In reality, however, the cost of water now has less to do with the amount consumed and more to do with the enormous cost of the infrastructure required to deliver it.

In this Urban Prospect, author Harold Shultz examines …

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Inside Edge: How to Collect Water and Sewer Bills

Currently the Mayor and the City Council are at loggerheads on the question of how to collect water and sewer bills in the City of New York. While the standoff continues, thousands of accounts are in default, an estimated $589 million of badly needed revenue is uncollected, and the City’s ability to sell real estate tax liens has expired. While the Mayor insists on the authority to sell water and sewer tax liens, the Council wants billing errors to be corrected prior to any such sale. It appears that a perfectly workable straight-forward answer exists but has been ignored. It …

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