On Thursday, February 16th, the New York State Supreme Court Appellate Division, First Department, upheld the lower court's ruling invalidating the City's attempt to freeze water rates for owners of 1-3 family homes while increasing rates for all other ratepayers, including rental property owners, by 2.1%.
This significant victory in the Appellate Division comes as a result of RSA challenging the City Water Board in June 2016. Judge Carol Edmead ruled that the Water Board's determination to establish that rate schedule was "unreasonable, arbitrary, capricious and an abuse of discretion."
The City ultimately appealed the decision. However, the Appellate Court followed the decision by the lower court, stating: "We agree, however, with the trial court's assessment that the one-time credit adopted for some, but not all, water customers at the same time the Water Board needed to increase overall water rates to fund a projected budget shortfall for that particular year, has no rational basis."
The City Water Board initially proposed a 2.1% increase on April 8, 2016, which assumed the continuation of a $122 million annual rental payment to the City. Shortly thereafter, on April 25, 2016, Mayor Bill de Blasio injected himself into the process and announced that the City would forego the annual rental payment, something that RSA had long been advocating for.
However, instead of simply freezing water rates for all property owners, including apartment building owners, the Mayor proposed that the 2.1% rate increase should still be adopted but that a one-time $183 bill credit should be granted for the City's 664,000 1-3 family homes. Without the credit, there would have been no economic basis for any rate increase. Nonetheless, the Water Board, an independent body as a matter of law, then adopted the Mayor's proposal.
More information regarding this tremendous victory for RSA can be found in the March edition of the RSA Reporter.
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