News Feature | July 19, 2016

Ratepayer Assistance On Chopping Block In New York

Sara Jerome

By Sara Jerome,

new york city reg new

New York City is in the midst of a battle over tap water rates, and the stakes are high: financial assistance for ratepayers may die in the crossfire.

In a “sweeping” decision last month, a state Supreme Court justice blocked a plan for New York City to raise water rates, according to The Wall Street Journal.

An unrelated proposal was a “casualty” of that decision, the report said. The proposal would have expanded a program “that provides water-bill credits to senior homeowners with less than $50,000 in annual income” and created a new program that offered a $250 credit to as many as 40,000 affordable-housing units.

Water affordability is a tension for utilities across the country. In its 2016 report on the state of the water industry, engineering firm Black & Veatch stated: “Over the past few years, the issue of affordability has received increased scrutiny, and water utilities are seeking to address challenging social issues around this matter.”

Water managers are asking: “Does a water utility’s business model have to change to address affordability?” the Black & Veatch report said. “Water utilities are recognizing that a one-size-fits-all approach may not be the solution. Instead, they are leveraging a combination of payment and discount plan options.”

In New York City, affordable housing advocates were disappointed to see the ratepayer assistance proposal flounder.

“It is a setback,” said Benjamin Dulchin, head of the Association for Neighborhood and Housing Development. “That was a valuable model program that was going to help to add to overall affordability. It was going to be a modest, but a meaningfully good thing to do.”

The group that filed the lawsuit, a landlord organization, says aid to seniors and low-income ratepayers was not the intended target of this legal fight.

“We support programs that have a rational basis and meet special needs, not programs that are politically motivated and funded by ratepayers who are already overburdened by years of double-digit rate increases,” Jack Freund, vice president of the Rent Stabilization Association, told the Journal.

The justification for the justice’s opinion, per the Journal:

The justice’s decision came in response to a lawsuit filed by city landlords who claimed the mayor’s proposal to give one- to three-family homeowners a $183 one-time credit to offset the 2.1 percent rate increase was unfair because it meant landlords of larger buildings would bear the burden of the higher rate. The justice also prohibited the water board from issuing the $183 credit.

The battle is not over. “We will appeal this decision, which prevents the lowest rate increase in 16 years and a $183 credit to most customers from being implemented,” said Mark Muschenheim, senior counsel in the city’s Law Department, per the New York Daily News.

For similar stories visit Water Online’s Funding Solutions Center.

Image credit: "take me to funkytown," Kenny Louie © 2008, used under an Attribution 2.0 Generic license: