Court Upholds Water Board’s 2017 Rate Increase and One-Time Credit

The state’s highest court recently overturned the lower court ruling that blocked a one-time $183 credit for owners of one-, two-, and three-family dwellings. At the same time, the Water Board increased charges in 2017 for owners of apartment, co-op, and condo buildings. Apartment owners claimed this violated the Public Authorities Law and imposed disproportionate charges on them.

The state’s Court of Appeals ruled that: (a) the Board’s decision to provide credit to some, but not all, customers based on their tax class wasn’t arbitrary or irrational; (b) the Board’s decision to increase rates system-wide while also providing credit to some, but not all, customers was not arbitrary or irrational; and (c) the Board’s system-wide rate increase while also providing credit to some, but not all, customers, didn’t amount to an impermissible tax. The court found that the city’s water and sewer rates may be determined in accordance with public policy goals, not just economic goals. The Board could balance rate-setting with other needs and goals [Prometheus Realty Corp. v. NYC Water Board, December 2017]. After the ruling, Mayor de Blasio announced homeowners would get a $183 credit on an upcoming water bill.