Water Board Repeals 2.1% Rate Increase for FY 2017
In Prometheus Realty v. NYC Water Board, RSA challenged the 2016 rate-setting by the City Water Board, which gave a bill credit of $183 to 664,000 1-3 family homeowners that would have been subsidized through the water rates charged to apartment building owners and other rate payers. The credit itself was the consequence of Mayor Bill de Blasio’s decision, which RSA had urged for many years, not to request the $122 million annual rental payment paid by the Water Board to the City for the 2017 Fiscal Year (FY). However, instead of using the rent forbearance to reduce all rates across the board, the credit was targeted to the homeowners solely, regardless of need.
RSA took on the Mayor and the Water Board, all the members of which are appointed by the Mayor, in the lawsuit. RSA defeated the City in the first round of the case in State Supreme Court and, then again, in a 4-1 ruling by the Appellate Division, First Department. However, in a ruling authored by Judge Eugene Fahey, the Court of Appeals, in a 5-2 vote, reversed the Appellate Division and ruled in the City’s favor, upholding the Water Board’s credit for the homeowners (see page 3 of the February 2018 issue of the RSA Reporter for more information on the Court’s decision).
After the Court’s decision, the Mayor held a press conference at which he indicated that the homeowners would receive the credit with the water bill that they would receive in March. Subsequently, the Water Board held a public hearing on January 26th to discuss the decision by the Court of Appeals, as well as repeal the 2.1% increase to water and sewer rates that was allowed for FY 2017.
By repealing the water rate increase for all rate payers and still providing the bill credit to 1-3 family homeowners, the Water Board confirmed RSA’s argument from day one: if the Board was to fully eliminate the rental payment to the City, there would be no need for a rate increase, which at that point would have been used to subsidize the $183 bill credit for smaller homeowners.
Although RSA still believes that owners of larger rental properties are deserving a water bill credit, the legal argument by RSA and the elimination of the rental payment has allowed water rates to remain frozen for the last two years. The Board has confirmed that the City’s water system is in strong financial condition with nearly $1.1 billion in cash savings expected to come into the system through 2021 as a result of the elimination of the rental payment.
As a result, RSA will continue to fight for water rate freezes as we approach the rate setting schedule for FY 2019.
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