1. The Rising Cost of Water, March 3, 2010
Background
Impact of water on housing economics and neighborhoods
Existing NYC DEP programs
Water Rate Policy and Its Impact on Affordable Housing

2. Why are rates rising? A) Rising Rental Payment to NYC
B) New capital projects
C) Rising Operating Costs
D) Reduced water use
E) All of the above

3. Background: How did NYC’s water rates where they are
During the Koch administration, in l984 legislation was passed to create the New York City Water Board and the NYC Municipal Water Finance Authority; move the costs related to water off the city budget

4. NYC Water Board
Water Board oversees the operation of the Water System and set rates; Water Board has 7 members, all appointed by the Mayor; typically, the Executive Director is a deputy commissioner of DEP
Water Board has to set rates to cover the operating costs of the system, the debt service for the bonds that cover the capital costs of the system, and an amount 15% larger than the debt service which will both repay NYC for old water related debt and a rental payment payable to the City of New York.

5. Water Finance Authority
Water Finance Authority issues the bonds that pay for the capital costs of the system; the Authority Board has 7 members: DEP Commissioner, City Finance Commissioner, City Budget Director, State Environmental Commissioner, 3 public members (2 appointed by Mayor, 1 appointed by Governor)

7. Capital Costs Projections
2007: $3,751,000
2008: $3,504,000
2009: $3,241,000
2010: $1,643,278
2011: $1,895,917
2012: $1,330,052
Total: : $17,480,982

8. Water Income and Expense Numbers ($’s in millions)
FY FY 2010
Income: $2, $2,754.7
Expenses:
Debt
Service: $ $1,081.0
M & O: $ $1,344.7
Rent: $ $198.4
Total: $1, $2,622.7
Net: $ $132.0

9. Comptroller’s Office 2008 Chart on the Rental Payment

11. Two Types of W/S Billing: Frontage and Meter
Flat Rate (“Frontage”): set fees based on the size of a building and the number of water using fixtures; Bills issued in late May for an entire year: July 1-June 30 of the next year; must be paid by July 31stThe flat-rate charge for water and wastewater service for the Fiscal Year beginning July 1,2009 is $ per Dwelling Unit.
Metered: Based on actual consumption.

12. DEP Estimate of Home Water Use
Toilets: 28%
Clothes Washer: 21%
Showers: 17%
Faucets: 15%
Leaks: 14%
Other: 5%

13. What programmatic assistance is there for buildings?
There is a bill cap program for properties of any size where high consumption is due to density, not leaks, inefficient fixtures or commercial use; Bill Cap: The maximum metered charge for any qualified Residential Premises is $1, per year for the first dwelling unit and $1, per year per additional dwelling unit.
Leak forgiveness: reduced bill for large leaks which owner couldn’t have known about
Multifamily Conservation Program: Commercial must be metered separately; must be current or in a payment agreement; must meet efficiency requirements; For Fiscal Year 2010, the charge per billable dwelling unit is $
Water Debt Assistance Program: open to people in the lien sale, in an owner-occupied 2 or 3 family home who has received a notice of delinquency from their mortgage lender.

14. What Now:
Water Board and DEP looking at Rate Study which looked at 4 different ideas: a) Fixed charge component b) Stormwater Charges c) New Development Charges d) Conservation Rates Next Rate Proposal from the City in April Build Awareness Reduce costs in buildings