Op-Ed: A Spending Tsunami for One City Agency

by Gregory Lobo Jost

As New York City heads into a period of budget deficits, there is a common perception that all city agencies are being forced to trim back 5 percent from their budgets. But there is one agency that gets a pass from City Hall and will actually increase its spending dramatically.

The Department of Environmental Protection (DEP), purveyor of a massive filtration plant on our neighborhood parkland, will increase its spending by almost 17 percent in the coming year – a $347.3 million rise over the current year.  Since the lion’s share of DEP’s budget comes from water rate payers and not from city coffers, Bloomberg and the city budget office are happy to turn a blind eye towards DEP’s spending increases. In fact, thanks to a stipulation known as the “rental payment,” the more DEP spends, the more rate payers actually subsidize city coffers (this year it will be to the tune of $77 million)!

The majority of media attention on the double digit water rate increases (last year it was 11.5 percent — a 15-year high — and this year DEP is proposing 14.5 percent) has gone towards so-called “deadbeats” who have not paid their water bills. To deal with this issue, DEP authorized shutoffs for single family homes and in December convinced the City Council to pass lien sale legislation for multifamily properties, promising it would help with collections and keep rate increases down.

This month we began to learn the truth: The real reason behind the massive increases is not the deadbeat factor but rather DEP’s unchecked spending.

DEP will rightly argue that much of this spending is federally mandated and that federal funds have all but dried up over the past decade. But within this framework, DEP has no incentive to keep costs down, and we New Yorkers are feeling the pain.

Norwood News readers are all too familiar with the massive cost overruns at the Croton Filtration Plant in our backyard.  Forthcoming audits of the plant by both the city comptroller and Independent Budget Offices will be welcome, but will only hit the tip of the iceberg of an agency whose non-subsidized construction costs are tops in the city.

What is clear right now is that the way we pay for water and sewer services (the latter of which is actually more costly) in New York City needs to change fundamentally. Under our current system, DEP tells the city what it needs to spend, then a mayoral-appointed Water Board rubber stamps it, and rate payers must deal with the subsequent huge increases.

To make matters worse, water rates are a hyper-regressive tax, as buildings in low-income neighborhoods use more water and therefore pay for a larger portion of DEP’s unchecked spending than those in higher income areas.

Here in the northwest Bronx, homeowners’ water bills will go up, on average, more than $100 this year.  Renters will also be affected as landlords feel pressure to raise rents or cut back on services.

University Neighborhood Housing Program and other affordable housing groups will be testifying in front of both the City Council and the Water Board this coming week to demand changes to the water system including ending the excess rental payment, establishing checks on DEP’s spending and creating a more just and equitable way of paying for the costs of the water system. To learn more about this issue and ways you can take action, visit www.unhp.org and click on the link regarding water rate reform.