View letter

New York City Comptroller William C. Thompson, Jr. has notified the New York City Water Board of ways to create a fairer structure for New Yorkers to pay water bills.

In a letter to its members, Thompson commended the Water Board for its efforts to address the inequity of having water and sewer ratepayers’ payments cover excessive rent to the City, which results in a growing subsidy to the City’s general fund.

“Unfortunately, the Water Authority has shown little interest in addressing this inappropriate cross-subsidy despite your advocacy,” Thompson wrote. “This is discouraging but I believe that you are in a position to ensure that this issue is given the attention it deserves, especially in the face of what we expect will be continued double-digit rate increases for fiscal year 2009 and beyond.” 

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 bring down 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.

“It is my hope that you will begin to address these issues when the Water Board meets on April 11 and as the rate-setting process moves forward. New York City’s water and sewer ratepayers will welcome your advocacy in seeking a fair method of financing this critical resource,” Thompson wrote.

Last May, Comptroller Thompson offered the Water Board a long-range proposal that would effectively lower charges to ratepayers while at the same time limiting future debt through the use of “pay as you go” capital financing.

The proposal pointed to an additional 23 percent growth in the Water Authority’s 10-Year Capital Strategy that will trigger further water rate increases.

###