Wednesday, April 11, 2007

Water Torture

In today's NY Times there is the usual good reporting by Anthony DePalma on the threatened 11.5% rise in the city's water rates. The rise, which could cost the average homeowner an additional $72 a year, is linked to the fact that the DEP has an arrearage of around $610 million in unpaid bills, and "Uncollected bills have to be taken into account when new rates are calculated."

But why can't the agency collect its unpaid bills? The reason lies with the DEP's inability to accurately gauge the bills that it sends out. Without the ability to defend the bills' veracity there is no way that a collection process could survive a court challenge. For a number of years we represented the Water Group, a consulting firm that used its superior expertise to help businesses challenge erroneous water bills. It helped Columbia Presbyterian, for instance, resolve a multi-million arrearage that neither the hospital's finance director nor the DEP could justify.

What all of this makes clear, is that the DEP is structurally incapable of being fiscally responsible. This means that all of its fiscal projections need to be taken lightly and we would suggest that the city put the agency into a form of receivership so that it can be restructured(along with the installation of competent management). Its keystone kops approach to billing would indicate that that agency should be run by Harold Lloyd and not Emily Lloyd.

All of which brings us to our own particular dust up with the agency over the use of food waste disposers. DEP had told the world that the installation of 20,000 commercial disposers would cost the agency $3 billion in retrofitting costs to the waste water treatment facilities.

What is even more laughable than the estimate is the agency that issued it. Put simply, if it can't properly estimate a home owner's water bill than how in heaven's name can we trust it to be accurate on this larger larger fiscal issues? In the meantime, as we have observed, here come the rats.