Monday, February 01, 2010

The Coming Water Bill

New Yorkers should expect to pay a whole lot more for water in coming years. Declining use combined with higher costs is resulting in a dangerous combination - the need to continue raising taxes on water usage.
From 2008 to 2009, city water consumption went down 12 percent. Over the same period, debt incurred by the NYC Municipal Water Finance Authority -- which finances the capital needs of the water and sewer system operated by the Department of Environmental Protection -- increased by 12 percent, to $22.38 billion. That does not include the entire $6 billion cost of New York City Water Tunnel No. 3, the largest capital construction project in the state's history.


Much of this investment is mandatory because the water system must comply with state and federal standards for water purity. The WFA will issue another $9.35 billion in debt over the next three years to do so -- and water customers will have to cover those costs, no matter how much or how little water they consume.

It only gets worse. A recent study by the city's Independent Budget Office projected the annual water bill for an average single-family home will approach $1,500 by 2015. By 2025, it will more than double that, to $3,500. And that's assuming the city will remain within federal Environmental Protection Agency standards for potable water and not have to build an $8 billion filtration system.

"Get ready. They're coming for your money again," said City Councilman James Oddo (R-Mid-Island/Brooklyn). Oddo and colleague Vincent Ignizio (R-South Shore) are organizing a protest at the next Water Board hearing on the Island, which will be sometime next month.
This is a problem I've been documenting for some time now; municipalities are facing ever higher requirements for water quality, and the only way to cover the costs is to raise taxes or use existing general funds, which are hard to come by in flush times, but are impossible to locate when revenues are down across the board. New York City is hardly alone in rising water bills, but the problem is made worse by EPA requirements that may force new spending to build filtration plants to maintain and upgrade water quality. The City had been fighting some of those requirements for years, hoping to save billions of dollars in the process, but the City lost that battle and the spending is only going to rise from here on.

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