March 30, 2009 / 5:57 PM / 10 years ago

NYC comptroller urges stimulus funds for water needs

NEW YORK, March 30 (Reuters) - New York City Comptroller William Thompson on Monday proposed using federal stimulus money and other solutions to spare city water ratepayers from another rate hike.

The city’s Water Board is scheduled to meet on Friday to consider raising rates. The board approved a 14.5 percent increase in 2008 and forecast another double-digit rate increase for this year.

“I will oppose any attempt to increase water rates, especially a year after a double-digit increase and water lien sales authority, in order to protect our city’s working families who are struggling,” Thompson said in a statement in which he said he had conveyed his proposals to New York State Governor David Paterson.

“For every $100 million that is granted rather than loaned, debt service costs of more than $5 million per year will be put back in ratepayers’ pockets,” Thompson said.

Under the terms of the federal government’s economic stimulus bill, the New York State Revolving Fund will receive approximately $432 million for clean water projects and $82 million for drinking water projects.

However, only half of that money currently is slated to be distributed in the form of direct grants or similar subsidies.

Other solutions Thompson proposed include reimbursing excess rent the Water Board pays to the city. The Water Board leases the water and sewer infrastructure from the city. Until recently, it effectively reimbursed the city for water-related debt service on bonds issued before the water authority was created.

Since 2005, however, the formula has led to payments that exceed the city’s underlying cost for the system.

For the past two years Thompson has proposed returning the excess rent to the Water Board to offset the cost of running the water system.

Another way to avoid a water rate increase would be for the Department of Environmental Protection to reduce its operating budget by 5 percent, he said. The DEP has been exempt from the belt-tightening reductions that other city agencies have had to endure because it relies on water and sewer rates rather than tax revenue.

New York Mayor Michael Bloomberg said last week the city is planning to install wireless water meters across the city as a way for homeowners and small businesses to reduce water usage and cut bills. See [ID:nN24377004].

On another issue, Thompson said that the state must regulate gas drilling in the Marcellus Shale formation, a natural gas formation mostly in Pennsylvania, but a portion of which sits below the New York city drinking water supply west of the Hudson River.

Drilling in or near the watershed threatens contaminating New York City’s drinking water and could “necessitate the construction of a water filtration plant whose cost could well exceed $10 billion for construction alone, further increasing water rates,” he said.

Residents of rural Pennsylvania claim drilling for gas has contaminated their water supply and caused illnesses. For more, see [ID:nN12499207]. (Reporting by Tom Ryan; Additional reporting by Jon Hurdle and Ciara Linnane; Editing by Dan Grebler)

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