In order to help cope with the financial fallout created by the COVID-19 (Coronavirus) pandemic, the City Water Board approved a much-needed water rate freeze for all of the City’s rate payers on June 19th.
Although RSA has been working tirelessly to advocate for relief for rental property owners, State and City elected officials continue to punt RSA’s requests and prioritize radical tenant protections. With the assumption that the City would not be providing any property tax relief for rental property owners, RSA called on the Water Board and City Department of Environmental Protection (DEP) to consider immediate relief for rental property owners ahead of their meeting on May 22nd.
During a formal presentation to the Water Board, DEP acknowledged the negative financial impact created by the pandemic not only for rental property owners, but for all rate payers throughout the City. As a result, DEP made a formal recommendation that a freeze on rates for Fiscal Year (FY) 2021 was in the best interests of all water and sewer rate payers.
By way of background, RSA has been calling on the Water Board to enact rate freezes since FY 2018. This was the first rate setting year after Mayor Bill de Blasio finally delivered on his campaign promise to eliminate the rental payment to the City, a so-called “hidden tax” that if it was eliminated, there would never be the need for another water rate increase.
During the rate setting schedule for that year, DEP went on the record to say that the “system is in strong financial condition,” with nearly $1.1 billion in cash savings expected to go into the system through FY 2021. Nevertheless, rental property owners were subsequently hit with a 2.36% rate hike in FY 2019 and 2.31% hike last year.
In addition to consecutive rate hikes, as well as substantial cash savings over the last three years, RSA learned during DEP’s budgetary presentation for FY 2021 that system operating expenses and debt service costs would both decrease for the upcoming fiscal year. As a result, during public testimony on June 15th, RSA went on the record and stated that all signs actually pointed to the need of a first-ever rate rollback. In the midst of the ongoing pandemic, the time had never been better to take such historic action.
Although RSA’s arguments were acknowledged, the Board ultimately voted in favor of a rate freeze for the new fiscal year. With the RGB once again freezing rents, a water rate freeze should provide some relief for rent-stabilized building owners. As a result, DEP will continue to bill customers at FY 2020 rates.