NYC Water Board Freezes Rates for FY 2021
On June 15, the NYC Water Board held a public hearing concerning proposed rates and charges for the use of the city’s water and wastewater system. Ultimately, as a result of the economic turmoil caused by the pandemic, the Department of Environmental Protection (DEP) made a formal recommendation to make no change to rates effective July 1, and to continue billing customers at current water and wastewater rates. On June 19, the Water Board voted in favor of a rate freeze for the new fiscal year starting July 1.
At the hearing, Joseph Murin, Chief Financial Officer of DEP and the executive director of the Water Board, presented on the water rate outlook for fiscal year beginning July 1, 2020. He gave an update on the impact of the COVID-19 pandemic on DEP operations and the water and wastewater system. He also discussed water consumption and financial trends since the outbreak of COVID-19 in the city.
The outbreak has presented unprecedented challenges to the agency, but water and wastewater utility operations are functioning normally. Murin stated that the water quality is unaffected and the water supply system is not a conduit for transmitting COVID-19. With regard to customer impacts, nonemergency water repairs and shutdowns have been suspended; meter replacements are on hold; and lien sales are currently suspended until summer/fall 2020.
The COVID-19 outbreak has reduced water usage in the city. Since March 16, when the shutdown went into effect, the total in-city water consumption has declined by 3.3 percent compared to FY 2019. Customer payments started to soften in mid-March and, since March 16, are 8 percent lower than the same time period in FY 2019.
Murin forecasts that full year 2020 revenues will come in at a 1 percent decline from the revenue collected in FY 2019. The factors contributing to lower revenue for DEP are customers deferring payment due to economic hardship; lower water consumption by commercial customers driven by business closures, stay-at-home orders, and less tourism; and the decision to suspend the FY 2020 sale of liens against overdue water bills until autumn 2020.
Policy Update for Customers Enrolled in
DEP’s Multi-Family Conservation Plan
The Multi-Family Conservation Program (MCP) provides qualified multiple-family housing of four or more dwelling units with billing based on a fixed charge per unit in lieu of billing based on metered charges. The program aims to promote water conservation in multiple-family housing, while giving customers control over their water and wastewater costs. At the discretion of the Commissioner, buildings with substantial increases in water consumption caused by unaddressed leaks or waste may be expelled from the program.
The MCP requires participants to implement certain conservation measures in order to remain on flat-rate billing. Properties must have an Automated Meter Reading (AMR)-compatible contemporary meter and an AMR device installed, and high-efficiency water-using fixtures installed in 70 percent of all units.
Customers enrolled in the MCP flat-rate billing program who didn’t provide documentation to DEP by Dec. 31, 2018, are now exposed to a 10 percent surcharge on their annual bill. In light of the COVID-19 pandemic, DEP is not assessing the 10 percent surcharge for FY 2020 and won’t include the 10 percent surcharge in the FY 2021 annual billing.