Sunday, June 7, 2009

Comptroller Thompson Unveils Proposal to Dilute Mayoral Control of NYC Water Board

New York City Comptroller William C. Thompson, Jr., joined by New York State Assembly Member James F. Brennan, State Senator Bill Perkins, and New York City Council Member David Weprin, today unveiled legislation to amend State law to offset the Mayor’s iron grip influence on the New York City Water Board.

The current structure simply isn’t working and is draining money from the pockets of City residents. If the Board reflected the views of a diverse group of people and not exclusively the view of City Hall, New Yorkers likely would not have been saddled with three consecutive double-digit increases in their water and sewer rates,” Thompson said. “The current culture of the Board discourages appropriate decision-making, sufficient independent monitoring, and accountability.”

Currently, the Mayor appoints all seven members of the Water Board. Under the new proposal, the Mayor would not have complete control of the Board and instead would appoint only four members. The other three would be named by the City Comptroller, Public Advocate, and Speaker of the City Council. Additionally, the Board Chairman would be elected by Board members and not the Mayor.

This Board needs independence and not an imposed, unilateral view that doesn’t reflect the realities faced by New Yorkers,” Thompson said, pointing to two instances over the last year where Water Board members challenged City actions, only to later resign or be replaced on the Board.

A more representative board would assure integrity to the decision-making process for just and reasonable rates. Issues like improper subsidies from water ratepayers to the General Fund of the City would get a real vetting,” said Brennan.

This lack of accountability to ratepayers must come to an end,” said Weprin. “It is time for the DEP and the Water Board to be accountable to the residents of New York City. The Water Board’s current structure prevents the Council from having a say over the Water Board’s decisions. Adding non-mayoral appointees would give the people of this City a better voice on the Water Board. This is the only way to curb an out-of-touch Water Board from operating in vacuum. Something needs to be done, and this is the only way to keep the Water Board in check by providing the balance that is currently lacking.”

Last month, the Water Board voted to impose a 12.9 percent water rate hike. Due to go into effect on July 1st, this increase will raise an average single family home owner’s annual water bill from $571 to $903 in just four years – a whopping 58 % increase, or about five times the inflation rate.

The Water Board’s plan to seek another 12 percent rate hike in Fiscal Year 2011 demonstrates that it intends to continue to squeeze money out of the pockets of ratepayers,” Thompson said. “It is imperative that changes be made to the Water Board with sufficient time to address next year’s water rate-setting process. Since the City continues to ignore recommendations made by my office, other elected officials, and advocates, it’s time for us to take steps to rectify the situation on behalf of New Yorkers.”

The Water Board leases the water and sewer infrastructure from the City. Rental payments are based on a formula that, until recently, reimbursed the City for water-related debt service on bonds issued before the Water Authority was created. Since 2005, however, the formula has led to rental payments in excess of the underlying City expense.

Thompson indicated that this formula is forcing water ratepayers to subsidize the City’s General Fund, because “excess rent” flows into that fund and is used as general revenue. In Fiscal Year 2009, such “excess rent” will total $106 million, and this is predicted to swell to more than $200 million by Fiscal Year 2013.

Over the last two years, Thompson proposed rebating the “excess rent” back to the Water Board to offset the cost of running the water system. In Thompson’s plan, the “excess rent” would have been split equally for two purposes: one half for pay-as-you-go capital spending, which reduces costs over the long term, and the other half for other water system expenses, which would lessen the need for rate increases.