Water Torture

Water bills are going up-at a 14% rate. As the NY Post reported last week: "Homeowners expecting a modest water-rate hike this year are in for a shock today - the Water Board will propose a punishing 14.5 percent increase starting July 1, officials said." And the reason why the rate increase is so much larger than expected? "But sources said collections aren't meeting forecasts, leading to the request for the big jump."

What do you know? The DEP can't collect the money that it's owed. And why's that? Well, as the NY Daily News points out, "The city's crackdown on overdue water bills has run into a big problem - the most notorious deadbeats can't be forced to pay. Cash-strapped hospitals, apartment buildings and nursing homes collectively owe tens of millions of dollars, but they are immune to the threats that have persuaded smaller debtors to pay up. The Department of Environmental Protection can't threaten to shut off their water because so many innocent tenants and patients would suffer."

And not only that. As the Post follows up on this story, it now appears that homeowners are going to be soaked next year as well: "Property owners about to be slammed with a 14.5 percent water-rate hike got another pounding yesterday when city officials disclosed they may ask for a 14.5 percent increase next year as well."

This news, however, masks the bigger problem. These institutions can't pay what the city alleges they owe because the DEP is unable to justify the bills. We ran into this issue when the Water Group, a consulting firm dealing in helping institutions monitor the city's water billing procedures, was a client. The folks there were representing Columbia Presbyterian Hospital when the city was claiming that it owed millions in unpaid water bills.

The problem? No one could demonstrate that the bills were valid, and without justification, the hospital CFO was stuck-unable to allow payment for a bill that couldn't be backed up by the city because of the incompetency of the DEP's staff and procedures. What the Water Group did was conduct a professional audit that allowed the hospital to save big money, but at the same time helped the city to be paid.

What this shows us is that the entire DEP operation needs to be put into receivership; and outside auditors need to be brought in to straighten out the incompetency. No home owner should be held to account until the entire system is properly reconstituted.